The Administration set further parameters for the next coronavirus response bill that Republican lawmakers plan to negotiate in mid-July, with trade adviser Peter Navarro telling Maria Bartiromo on Fox Business Friday night that President Trump wants "something on the order of at least $2 trillion" that includes a payroll tax cut and measures to bring manufacturing jobs back to the US.

The $2 trillion figure would split the difference between the $3 trillion House-passed HEROES Act and the $1 trillion target reportedly set by Senate Majority Leader Mitch McConnell (R-KY). National Economic Council Director Larry Kudlow separately told Bartiromo: formal negotiations probably won't happen until after the July 4th recess; tax incentives and other means can be used to help bring US companies' operations back from China; the Administration wants help for the tourist industry, restaurants, entertainment and sports with tax deductions or tax credits; and "We're probably going to be able to help business to cash out net operating losses." Unemployment assistance should reward people to go back to work and continue until the end of the year, Kudlow said, but separately made clear on CNN that the current $600 weekly add-on will not be extended.

House Ways and Means Committee Ranking Member Kevin Brady (R-TX) said Friday that accelerating general business credits, including the R&D credit, and letting companies monetize them is worth considering, Politico reported. The idea has also been discussed in the Senate. The Ways and Means Select Revenue Measures Subcommittee is holding a hearing on "Tax Relief to Support Workers and Families during the COVID-19 Recession" on Thursday, June 18, at noon. Also this week, USTR Bob Lighthizer will testify on trade before both tax-writing committees on June 17 (Ways and Means at 10am; Finance at 3pm).

The budgetary impact of response legislation is a concern. The Wall Street Journal reported on a bipartisan letter circulating from about 60 members evenly split between Republicans and Democrats that requests that "further pandemic-response legislation include provisions for future budget reforms to ensure we confront these issues when the economy is strong enough."

BEPS 2.0

The June 15 Wall Street Journal reported that the OECD BEPS 2.0 effort is made more complicated by the coronavirus pandemic as countries face growing budget deficits, but, as OECD officials have noted, tech companies fare well in an environment focused on working from home and ordering products online, and the article quotes some as saying US concerns that tech companies are being targeted have resurfaced.

Election

A New York Times story on presumptive Democratic presidential nominee Joe Biden's running mate selection process said eight or nine of the roughly dozen candidates being talked about are "already being vetted more intensively. Among that group are two contenders who have recently grown in prominence, Representative Val Demings of Florida and Mayor Keisha Lance Bottoms of Atlanta. One well-known candidate, Senator Amy Klobuchar of Minnesota, has lost her perch as a front-runner."

The Washington Post focused some attention on a group including Demings, Bottoms, Senator Kamala Harris (D-CA), and former Obama national security adviser Susan Rice, which the paper noted "has never sought or held elective office, but she has the most extensive record of dealing with foreign governments."

EY COVID-19 Alerts and other resources are here.

The global EY Tax COVID-19 Response Tracker has been updated through June 11.

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