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October 1, 2020

What to expect in Washington (October 1)

House Speaker Nancy Pelosi (D-CA) and Treasury Secretary Steven Mnuchin are both projecting some renewed optimism for a bipartisan deal on additional coronavirus relief legislation. On Fox Business September 30, Secretary Mnuchin said "the president instructed us to come up significantly" on the acceptable cost of a package, that President Trump "would like to do a deal," and that the two sides had agreed there will be direct payments similar to those provided under the CARES Act in any such deal. Speaker Pelosi released a statement saying, "Secretary Mnuchin and I had an extensive conversation and we found areas where we are seeking further clarification. Our conversations will continue."

Roll Call reported that Secretary Mnuchin offered a $1.62 trillion package that included $250 billion for state and local governments — the House bill includes $436 billion — and a $400 unemployment benefit add-on retroactive to September 12 and lasting through the end of the year. Also: "Mnuchin's total offer on health care is $175 billion, which in addition to the testing money includes $50 billion for vaccine production and distribution and $50 billion for health care providers, including hospitals." The proposal includes $160 billion in new funding to revive the PPP for a second round of forgivable loans and $60 billion for rent and mortgage assistance, the report said.

Politico Playbook reported that "Dems want … a host of tax provisions, some related to health care." Those and other issues in the talks "are not easy to bridge, and there's ample skepticism among the onlookers that they will be able to get a deal. And if they do, it's going to take some time to finish up."

House Democrats shelved an expected vote September 30 on their updated version of the HEROES Act coronavirus relief bill, trimmed to a net cost of $2.2 trillion, which was intended to formalize Democrats' offer to the Administration as negotiations continued. That vote may still occur this afternoon (Thursday), but possibly only if a deal doesn't materialize. Democratic leaders have been pressured by some members to put a bill on the floor before the election and House Majority Leader Steny Hoyer (D-MD) said September 30 that a House vote on the Democratic bill would not necessarily signal a failure of the bipartisan talks.

Rep. Josh Gottheimer (D-NJ), who co-leads the Problem Solvers Caucus that previously outlined a $1.5 trillion package, tweeted: "The next 24 to 48 hours are key. This is game time. Many of us have made it clear we can't go home before the election and potentially inauguration without helping people, small businesses, local governments."

Secretary Mnuchin said the proposal the Administration envisions would provide airline relief, and the updated HEROES Act adds money for airline workers. One potential motivating factor for a deal: American Airlines and United Airlines "will start furloughing more than 32,000 employees on Thursday after talks for a national coronavirus aid package failed in Washington, but both carriers say they are prepared to reverse course if a stimulus deal is reached," CNBC reported.

NBC News reported: "At stake are the jobs of close to 50,000 pilots, flight attendants, baggage handlers, counter agents and other airline and airport personnel. A provision of the CARES Act, which President Donald Trump signed in March, covered nearly 75% of airlines' payroll expenses, with the stipulation that airlines not let any workers go until Oct. 1. The provision expires Wednesday night."

Still, an obstacle is the Senate, where some Republican members have been resistant to an additional large relief bill. Majority Leader Mitch McConnell (R-KY) was reported yesterday as saying the roughly $2 trillion-plus package sought by House Democrats was "outlandish" and that the two parties are wide apart.

Slightly after midnight, President Trump signed the continuing resolution (CR) that, among other things:

  • extends government funding beyond September 30 and through December 11
  • extends health extender provisions through December 11
  • extends surface transportation programs for one year, through September 30, 2021
  • transfers $13.6 billion to the Highway Trust Fund
  • extends the National Flood Insurance Program for a year, until September 30, 2021

The Senate, at least, will be in session next week to consider judicial nominations.


The Senate September 30 conducted a procedural vote designed to force Democrats to vote against an amendment — the vote was 47-47 — by Senator Thom Tillis (R-NC) reflecting the Protect Act that addresses those with preexisting conditions, which asserts "Congress will protect individuals with preexisting conditions if the Supreme Court ultimately determines in Texas v. California that Obamacare is unconstitutional." Senator John Cornyn (R-TX) tweeted "Tonight we voted on the Protect Act, a bill I've co-sponsored to ensure Texans with pre-existing conditions have access to affordable health insurance. But Democrats blocked it." Both Tillis and Cornyn are up for reelection in 2020.

The move was seen as a counter to Senate Democratic Leader Chuck Schumer (D-NY) September 29 filing cloture on the motion to proceed to S. 4653, "legislation to protect the healthcare of millions of people in the US and prevent efforts of the Department of Justice (DOJ) to advocate courts to strike down the ACA." Senator Schumer's procedural motion, which is generally viewed as a Majority Leader's prerogative, and filing cloture on his own motion was seen as an effort to force Republicans to vote before the election on the issue of health care, which has become an even greater focus in light of plans by the President and Senate majority to fill the Supreme Court vacancy as the Court is set to consider an Affordable Care Act (ACA) case November 10. The cloture vote will occur today (Thursday) and is expected to fail.

House Committee on Oversight and Reform Chairwoman Carolyn Maloney (D-NY) September 30 announced she is releasing a series of new staff reports detailing the findings of an investigation into increasing prices of prescription drugs. She said during a September 30 hearing that documents reviewed show that "these price increases are unsustainable, either for government health programs or patients themselves." The release caps an investigation into drug pricing practices, begun in January 2019 under late Chairman Elijah Cummings (D-MD), and follows President Trump taking actions on the issue, which Maloney criticized during the hearing. "He promised to hand out a paltry $200 discount cards, but he has failed to explain how this will help people facing tens of thousands of dollars in drug costs," she said. "The president also claimed he is banning U.S. companies from charging more than they charge abroad, but experts expose this tiny demonstration project as a transparent and futile attempt to create the impression of action where there really has not been any."

The September 30 hearing featured as witnesses the current or former CEOs of Celgene, Bristol Myers Squibb and Teva Pharmaceuticals. Today's hearing features testimony from the CEOs of Amgen, Inc., and Mallinckrodt Pharmaceuticals, plus the U.S. Country President of Novartis AG.

An editorial in today's Wall Street Journal takes issue with Democratic presidential nominee and former Vice President Joe Biden's debate claim that only the ACA can protect coverage for 100 million Americans with pre-existing conditions, a figure that "may come from an estimate of how many Americans have a condition but aren't enrolled in Medicare or Medicaid." The editorial said: "One of the biggest political cons of the past decade is the left's claim that only ObamaCare could keep these Americans from being deprived of health care. In fact the law's regulations and mandates have often resulted in narrow networks and high out-of-pocket costs for patients who most need good and affordable care."


On September 30, nominee and former VP Biden took a train tour through Pennsylvania and Ohio (he famously commuted by train between Delaware and DC during his long Senate career). The New York Times reported: "Mr. Biden is polling neck-and-neck with the president in Ohio, but many Democrats continue to view a victory there as a stretch. Mr. Trump carried the state by eight percentage points in 2016, and it is not among the battlegrounds that Mr. Biden's campaign has been most focused on. In Pennsylvania, Mrs. Clinton's surprise defeat four years ago is a source of nightmares for many Democrats who are still wary of believing polls showing Mr. Biden with a stable lead there."


The IRS September 30 issued final regulations on the business expense deduction for meals and entertainment following changes made by the Tax Cuts and Jobs Act (TCJA). The 2017 TCJA generally eliminated the deduction for any expenses related to activities generally considered entertainment, amusement or recreation. However, taxpayers may still deduct business expenses related to food and beverages if certain requirements are met. The final regulations address the disallowance of the deduction for expenditures related to entertainment, amusement or recreation activities, including the applicability of certain exceptions to this disallowance. They also provide guidance to determine whether an activity is considered entertainment. The final regulations also address the limitation on the deduction of food and beverage expenses.


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Washington Council Ernst & Young
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   • Kurt Ritterpusch (