September 8, 2020
Senate Republicans plan vote on targeted COVID-19 relief
Senate Republicans September 8 released a narrowly targeted roughly $500 billion COVID-19 relief package that addresses: liability relief; unemployment benefits through a $300/week add-on through December 27; a second round of the Paycheck Protection Program (PPP); Postal Service assistance; short-term assistance for child care providers; a new temporary credit for educational scholarships; pandemic preparation and strategic stockpiles; an increase in the CARES Act above-the-line deduction for charitable contributions; and additional emergency appropriations for the coronavirus health response.
Senate Majority Leader Mitch McConnell (R-KY) said today he would set up a floor vote as soon as this week on the package that demonstrates that, "Republicans believe the many serious differences between our two parties should not stand in the way of agreeing where we can agree and making law that helps our nation." Senator McConnell, echoing remarks made by President Trump September 7, said: "Everything Speaker Pelosi and Leader Schumer have done suggests one simple motivation: They do not want American families to see any more bipartisan aid before the polls close on President Trump's re-election. They have taken Americans' health, jobs, and schools hostage for perceived partisan gain."
The narrow bill is not expected to have the 60 votes necessary for most legislation to advance in the Senate, but leaders are said to be aiming to demonstrate a unified position of Republicans and backing of a majority 51 senators. The Senate effort may establish a negotiating position for the chamber but is not expected to materially affect bipartisan negotiations mostly between the Administration and House Democrats that have not budged in the past month. Democrats insist on a coronavirus relief/stimulus package of at least $2.2 trillion and the Administration is now signaling support for $1.5 trillion maximum.
Democratic leaders have criticized the narrow bill effort over the weeks it has been under development. House Speaker Nancy Pelosi (D-CA) and Senate Democratic leader Chuck Schumer (D-NY) released a statement saying, "this emaciated bill is only intended to help vulnerable Republican Senators by giving them a 'check the box' vote to maintain the appearance that they're not held hostage by their extreme right-wing that doesn't want to spend a nickel to help people."
Tax — On tax issues, the CARES Act included a new $300 above-the-line deduction for charitable contributions that taxpayers can claim for 2020. The provision would increase the amount to $600 for individuals and $1,200 for those filing a joint return.
The plan would provide two years of tax credits, based on the School Choice Now Act (S. 4284) sponsored by Senators Tim Scott (R-SC), Ted Cruz (R-TX), and others, for contributions to organizations granting scholarships towards private schooling. Also, Section 529 plan funds could be used for expenses like books, online materials, licensed tutoring, and home-school educational expenses.
Appropriations — New funding provided under the bill includes:
Paycheck Protection Program — Title IV of the bill would reopen the CARES Act's PPP, which closed on August 8, for second loans to companies that meet certain terms. The bill provides an additional $257.7 billion for these follow-on loans. Companies applying for a second loan would have to meet the Small Business Administration's revenue thresholds for what constitutes a "small business" in various industries; have 300 or fewer employees; and be able to show a 35% revenue loss this year relative to the same quarter in 2019. Notably, the 35% figure was reduced from the 50% loss that both Marco Rubio (R-FL), chairman of the Senate Small Business Committee, and Ranking Member Ben Cardin (D-MD) previously called for in their own bills authorizing second PPP loans earlier this summer. Numerous business groups had written Rubio and Cardin in August saying the 50% loss threshold was too high. Under this bill, second loans from the PPP would be 2 ½ times a firm's monthly payroll costs, up to a maximum of $2 million.
Responding to another complaint from PPP borrowers, the bill would also simplify the loan forgiveness application process for current and future PPP borrowers if they have a loan of $150,000 or less. (Currently, the PPP's loan forgiveness application is longer and more complex than the application for the loan itself.) To bolster oversight of a program that analysts have said has dispensed some loans to fraudulent borrowers, the bill provides $50 million for audits of existing loans.
Rescissions — Title I of the bill would address some senators' concerns about overspending, while also targeting funding for the Federal Reserve's "section 13(3)" emergency programs that so far have not been used as much as expected. One provision would reduce from $500 billion to $296 billion the money allocated for the CARES Act's Title IV, section 4003(a), which is to be used for assistance to airlines, cargo air carriers, "national security" businesses and loss protection for the Federal Reserve's emergency lending programs to large and small businesses, states and municipalities.
Another provision would rescind $204 billion from the $454 billion allocated for Title IV's section 4003(b)(4), which the CARES Act intended for the Fed to leverage at a 10-to-1 ratio for its emergency loan programs, such as the Main Street Loan Programs, Municipal Liquidity Facility, Primary Dealer Credit Facility, Secondary Market Corporate Credit Facility, Commercial Paper Funding Facility and Term Asset-Backed Loan Facility. The Fed has said that while participation in these programs, many of which took months to get up and running, has been less than expected, borrowing from them could increase this fall. The bill's offsets title terminates the CARES Act's emergency authority for section 13(3) programs starting next year and would "claw back" any unspent Treasury funds in those accounts then. The bill would terminate lending under these programs after January 4, 2021.
Title I also would rescind $146 billion in unobligated money from the special SBA 7(a) fund the CARES Act established for PPP loans, sending it back to Treasury's general fund.
The bill and summary are attached below.
Senate GOP Targeted Relief Package