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August 11, 2020

What to expect in Washington (August 11)

President Trump's weekend executive action on payroll tax deferral, unemployment benefits, student loan payment relief, and assistance to renters and homeowners hasn't yet jumpstarted talks between the Administration and Democratic congressional leaders over coronavirus legislation that both sides had planned to be broader than those four topics, though he suggested the other side is eager for a deal. The President tweeted: "So now Schumer and Pelosi want to meet to make a deal. Amazing how it all works, isn't it. Where have they been for the last 4 weeks when they were 'hardliners', and only wanted BAILOUT MONEY for Democrat run states and cities that are failing badly? They know my phone number!"

On MSNBC's Morning Joe, Senate Democratic leader Chuck Schumer (D-NY) said "these executive orders are laughable. This unemployment insurance one … is not going to be able to be put into place for a month or two, if at all. So here we're going to have through September, all these people not getting the money?" Senator Schumer said Democrats are holding out for a big bill. "They have to meet us in the middle … We need bold action. We're not going to settle for some skimpy thing that doesn't work." Administration officials rejected Democrats' earlier split-the-difference offer of a $2 trillion bill.

Treasury Secretary Steven Mnuchin said on CNBC yesterday "If we can get a fair deal, we'll do it this week," but it won't happen if Democrats are unreasonable. He further said Republicans are not "stuck" at a $1 trillion dollar maximum for the bill, but "we're not going to go to unlimited amounts of money to get things that don't make sense." During a later news conference with the President, Secretary Mnuchin said he had spoken to Senator Schumer several times since Friday and if "they're willing to negotiate and have a new proposal, we're more than happy to meet."

The Washington Post was among the latest to report on White House Chief of Staff Mark Meadows' role in the negotiations, which has been seen by many as preventing Secretary Mnuchin from giving away too much to Democrats in a next bill. "There was never much mutual trust between the White House and Democrats, which prevented the negotiations from ever gathering steam," the report said,

House leaders announced August 10 that they won't return to regular session until September 14 but remain on 24 hours' notice should any coronavirus legislation be brought to a vote. The Senate remains in session, but most members are home with the same 24 hours' notice for a coronavirus bill.


The Wall Street Journal talks about the payroll tax deferral: "Employers' biggest worry: If they stop withholding taxes without any guarantee that Congress will actually forgive any deferred payments, they could find themselves on the hook."

During his news conference August 10, President Trump repeated comments from Saturday that the Administration is looking at income and capital gains tax relief. "We're looking at also considering a capital gains tax cut which would create a lot more jobs so we're looking very seriously at a capital gains tax cut and also at an income tax cut for middle income families," he said. "We're looking at expanding the tax cuts that we've already done, but specifically for middle income families and you'll be hearing about that in the upcoming few weeks and I think it will be very exciting."

The Office of Management and Budget Office of Information and Regulatory Affairs (OIRA) has completed its review of a Final Rule on Limitation on Deduction for Dividends Received from Certain Foreign Corporations and Amounts Eligible for Section 954 Look-Through Exception [TCJA] and a Proposed Rule Coordinating Application of Certain Regulations Under Sections 245A and 951A.


Also during the news conference August 10, President Trump was asked about his previous comments that he would pursue "a major executive order requiring health insurance companies to cover all pre-existing conditions for all customers," which is seen as duplicative given that the protection already exists under the Affordable Care Act. The President said, in part, it would be "just a double safety net and just to let people know that the Republicans are totally, strongly in favor of preexisting condition, taking care of people with preexisting conditions. It's a signal to people, it's a second platform. We have preexisting conditions will be taken care of, 100%, by Republicans and the Republican Party. I actually think it's a very important step."


The New York Times reported that presumptive Democratic nominee Joe Biden "has told allies that he has interviewed every finalist in his vice-presidential search, and his advisers are planning an announcement for the middle of the week," possibly today (Tuesday) or, more likely, Wednesday.


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For additional information concerning this Alert, please contact:
Washington Council Ernst & Young
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