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Talks over a next coronavirus bill continue today (August 5), but Treasury Secretary Steven Mnuchin told Senate Republicans yesterday that Administration negotiators were no closer to reaching a deal with House Speaker Nancy Pelosi (D-CA) and Senate Democratic leader Chuck Schumer (D-NY) than they were a week earlier, The Hill newspaper reported. White House Chief of Staff Mark Meadows said yesterday, "we are a long ways' away from striking any kind of a deal." Some Republican senators, including those up for re-election in November, said the chamber must stay in session past the scheduled start of the August recess on Friday.

Bloomberg reported Senator David Perdue (R-GA), who is up for re-election in a race now rated as a toss-up, as saying the Senate will need to stay in session next week and possibly the week after to enact a next bill. "We keep everybody here until we get this done," he said.

Friday is the target deadline that Administration and Democratic negotiators have set for reaching a deal, setting up votes in Congress next week, the Washington Post reported. The report cited White House officials as saying they had made "very concrete offers" on issues like unemployment benefits, which other reports suggested would split the difference from where each side has dug in to offer a $400 add-on.

Democrats aren't willing to reduce the previous (expired) $600 add-on. "There's no in between … " Speaker Pelosi said on PBS yesterday. "We are not saying to the American people, 'More people are infected. More people are dying. More people are uninsured. More children are hunger insecure — are food insecure, and guess what? We're going to cut your benefit.'" She again invoked the Tax Cuts & Jobs Act (TCJA) as an example of when Republicans were willing to spend without concern for the deficit but, when asked, said rolling back any TCJA provisions is not part of the current legislative effort; Democrats want to undo the CARES Act 'excess business losses' NOL relief to non-corporate taxpayers but probably can't.

Looking forward, however, "when we address the issue of taxation in the country, we will do that in a way that is bipartisan, has sustainability, fairness and transparency so the American people can see what is happening," the Speaker said.

Democrats want to address other issues beyond the core pandemic-related relief and are today meeting with the Postmaster General over concerns about mail-in voting. The Speaker is also said to have determined that the two sides can't split the difference on pension issues in the bill.

The Wall Street Journal reported on Democratic efforts to suspend for two years the TCJA $10,000 state and local tax (SALT) deduction in the bill (at a cost of $137 billion), which "shows just how important the deduction is to a party that counts upper-middle-class residents of urban areas as a core part of its base."

Chief of Staff Meadows and President Trump have discussed executive action on issues like payroll tax relief but haven't released anything. Senate Majority Leader Mitch McConnell (R-KY) yesterday continued to acknowledge divisions among his members on a next bill, but, "What we're hoping for here is a bipartisan proposal, negotiated by the President of the United States and his team who can sign a bill into law, and the Democratic majority in the House that can appeal to a significant percentage of Republicans in the House and Senate."

Treasury has posted updated FAQs on Paycheck Protection Program loan forgiveness.

Tax

Final Base Erosion and Anti-Abuse Tax (BEAT) regulations are now under review by the Office of Management and Budget Office of Information and Regulatory Affairs (OIRA).

Election

A Washington Post story said some of presumptive Democratic presidential nominee Joe Biden's supporters want him to increase his visibility and raise voter excitement. Biden's approach for now is focused on four states crucial in the last election and again this year — Pennsylvania, Wisconsin, Michigan, Florida — but he has opportunities in states like Texas and Georgia.

Rep. Roger Marshall (R-KS) has won the Kansas GOP Senate primary over the more controversial Kris Kobach, easing fears that Republicans could lose in the general election. Two more incumbents, Reps. Steve Watkins (R-KS) and Lacy Clay (D-MO), lost primaries, bringing the total to seven this year.

The global EY Tax COVID-19 Response Tracker has been updated through August 4.

On Friday, August 7 (at 12:00 p.m. ET) is the EY Webcast, "Tax in the time of COVID-19." To determine what information your company needs to know now, join our panelists for a series of conversations about operating the tax function in this time of National Emergency created by the COVID-19 virus. This week's panelists will provide updates on: (i) the US legislative and economic landscape; (ii) breaking developments, including a look at the newly issued Section 163(j) regulations; and (iii) what's happening at the IRS. Register for this Thought Center Webcast.

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