October 9, 2020
What to expect in Washington (October 9)
This week, bipartisan negotiations over a next coronavirus relief/stimulus bill between the Administration and House Speaker Nancy Pelosi (D-CA) turned from focusing on a comprehensive approach, then to discrete issues where progress could be made, and now back to a comprehensive approach, with no clear outlook on if and when a deal could come together.
Surveying the situation, the New York Times reported October 8: "As tens of millions of Americans, schools and businesses watched the flurry of developments that could determine whether they would receive another infusion of desperately needed pandemic relief, confusion reigned in Washington about whether an elusive stimulus compromise was dead, alive, on life support or somewhere in between. What remained clear was that the political stakes, which have long imperiled a bipartisan bargain, have only heightened."
In a Fox Business interview October 8, President Trump said, "I shut down talks two days ago because they weren't working out. Now they are starting to work out. We're starting to have some very productive talks. And she wants it to happen too." Discussions had been focused on relief to respond to airline industry furloughs. "We got back, we started talking again and we're talking about airlines and we're talking about a bigger deal than airlines. We're talking about a deal with $1,200 per person. We're talking about other things," President Trump said.
Speaker Pelosi, meanwhile, made clear that an airline relief bill won't get done without the promise of a comprehensive bill. She said during an October 8 news conference "I have been very open to having a standalone bill for the airlines or part of a bigger bill. But there is no standalone bill without a bigger bill. There is no bill … If we don't have a guarantee that we're going to be helping our state and local employees [etc.]."
Axios reported that President Trump told House Republican leader Kevin McCarthy (R-CA) October 7 "he was worried by the stock market reaction and wanted a 'big deal'" with Speaker Pelosi, and that Secretary "Mnuchin swiftly acted on the president's directive and called Pelosi Wednesday evening to tell her negotiations were back on, per a Democratic congressional aide."
Backing this up: a tweet from a Politico reporter this morning saying the White House is now completely set on striking a deal with Speaker Pelosi and working all next week to do so; still no guarantees on the Senate.
Roll Call October 8 reported that Secretary "Mnuchin communicated to Pelosi that Trump is interested in reaching agreement on a comprehensive bill," despite statements from the White House communications team that the Administration is seeking "direct payments, we're for extension of PPP, and we'd like to see an airline bailout, but not part of a larger package."
Some Senate Republicans have been reluctant to support a large coronavirus relief/stimulus bill, and now some are expressing reservations over the type of airline relief that's being discussed. This takes on extra weight given that the Senate is out of session due to COVID concerns through the end of next week, and it doesn't appear unanimous consent could be granted to an airline bill should one materialize.
Senators Mike Lee (R-UT) and Pat Toomey (R-PA) — a member of the Finance Committee who announced this week he would neither run for reelection in 2022 nor run for PA governor — released a joint statement October 8 saying: "we have a responsibility to ensure that taxpayer resources are used in an appropriate and equitable manner. Rather than collect another round of grant funding, airlines should start (or in some cases continue to) take advantage of the low-interest, long-term loans from the federal government under the CARES Act. … Consideration of legislation providing grants to the airlines should not happen unless there are adequate protections for taxpayers and the opportunity to offer related amendments."
The Wall Street Journal reported Senate Majority Leader Mitch McConnell (R-KY) as saying of coronavirus relief/stimulus, "I've got a significant percentage of my members who think we've done enough and who are alarmed by the amount of national debt," he said.
A Treasury interim final rule released last night provides additional guidance concerning the forgiveness and loan review processes for PPP loans of $50,000 or less and, for PPP loans of all sizes, lender responsibilities with respect to the review of borrower documentation of eligible costs for forgiveness in excess of a borrower's PPP loan amount.
Also up in the air is the future of this year's presidential debates:
A University of Georgia poll released October 8 showed President Trump leading the presidential race in the state at 48% to Democratic nominee Joe Biden's 46%. Senator David Perdue (R-GA) is leading Democrat Jon Ossoff in the Senate race 49%-41%. In the Senate special election, Democrat Rev. Raphael Warnock leads with 28%, followed by Senator Kelly Loeffler (R-GA) at 22% and GOP challenger Rep. Doug Collins (R-GA) at 21%.
A 9NEWS/Colorado Politics survey of likely voters released October 8 showed Biden currently leads President Trump 50%-40% among likely voters in Colorado and former Gov. John Hickenlooper (D) leads Senator Cory Gardner (R-CO) 48%-39% in the Senate race.
The latest NewsNation/Emerson College poll of Michigan showed Biden leading President Trump 52%-42% among registered voters.
Today, October 9 (at 12:00 p.m. ET), is the EY Webcast, "Tax in the time of COVID-19: update on legislative, economic, regulatory and IRS developments." The coronavirus (COVID-19) and the resulting economic crisis have made reacting to tax and trade developments more complicated and more difficult. Panelists will provide updates on: (i) the US legislative and economic landscape; (ii) breaking developments — federal and state; and (iii) what's happening at the IRS. Register for this thought Center Webcast.