On April 21 and 23, the United States and Senate and House of Representatives approved the latest coronavirus relief package, respectively. The Paycheck Protection Program and Health Care Enhancement Act, known on Capitol Hill and in the media as COVID 3.5 (it was the fourth package passed by Congress since the start of the crisis, as a fix to the previously-passed third package), was signed into law on April 24.
The bill provides $484 billion in additional funding to replenish and supplement programs established in the third package, or CARES Act, including the Paycheck Protection Program (PPP), small business disaster loans and grants (which Atrómitos wrote about here), hospitals and healthcare providers, and testing.
The Payback Protection Program has been widely criticized as new media reports reveal millions of dollars have gone to large corporations, NBA teams, and well-funded private schools, as small business owners around the country have struggled to secure loans. Here’s more about what’s in it and what comes next.
An overview of what’s in COVID 3.5
PAYCHECK PROTECTION PROGRAM
Gives the program an additional $321 billion in funding, including $60 billion set aside for small, midsize, and community lenders, including minority lenders.
Who Can Apply for the Paycheck Protection Program
Any small business concern that meets SBA’s size standards (either the industry based sized standard or the alternative size standard)
Any business, 501(c)(3) non-profit organization, 501(c)(19) veterans organization, or Tribal business concern (sec. 31(b)(2)(C) of the Small Business Act) with the greater of 500 employees, or that meets the SBA industry size standard if more than 500
Any business with a NAICS Code that begins with 72 (Accommodations and Food Services) that has more than one physical location and employs less than 500 per location
Sole proprietors, independent contractors, and self-employed persons
DISASTER LOANS PROGRAM
Gives the program an additional $50 billion for the program and an additional $10 billion for Emergency Economic Injury Disaster Loan (EIDL) Grants. Note: As of now, the Small Business Administration is not accepting any new applications for EIDL Grants. You can check their information page here.
HHS HOSPITAL AND PROVIDER GRANTS UNDER THE PUBLIC HEALTH AND SOCIAL SERVICES EMERGENCY FUND
Provides an additional $75 billion to support the need for COVID-19-related expenses and lost revenue due to the pandemic. If you are a hospital or provider, you can find more information on this program here.
TESTING
Provides $25 billion for the HHS Public Health and Social Services Emergency Fund for necessary expenses to research, develop, validate, manufacture, purchase, administer, and expand capacity for COVID-19 tests. It also requires the Administration to create a national strategy to provide assistance to states for testing and increasing testing capacity. It also requires states, localities, territories, and tribes to outline their own testing plans, as well as plans to ease COVID-19 closures and mitigation strategies. The Secretary of Health and Human Services is required to issue reports on testing, which must include de-identified and disaggregated data on demographic characteristics, including race, ethnicity, age, sex, geographic region, and other relevant factors of individuals tested or diagnosed with COVID-19, as well as information on the numbers and rates of cases, hospitalizations, and deaths as a result of coronavirus.
Specifically, it includes testing funding for:
- $11 billion for states, localities, territories, and tribes to develop, purchase, administer, process and analyze COVID-19 tests, scale up laboratory capacity, trace contacts, and support employer testing. Funds are also made available to employers for testing.
- $2 billion provided to states consistent with the Public Health Emergency Preparedness grant formula, ensuring every state receives funding.
- $4.25 billion provided to areas based on the relative number of COVID-19 cases.
- $750 million provided to tribes, tribal organizations, and urban Indian health organizations in coordination with the Indian Health Service.
- $1.8 billion provided to the NIH to develop, validate, improve and implement testing and associated technologies; to accelerate research, development, and implementation of point-of-care and other rapid testing; and for partnerships with governmental and non-governmental entities to research, develop and implement the activities.
- $1 billion provided to CDC for surveillance, epidemiology, laboratory capacity expansion, contact tracing, public health data surveillance, and analytics infrastructure modernization.
- $1 billion for the Biomedical Advanced Research and Development Authority for advanced research, development, manufacturing, production, and purchase of diagnostic, serologic, or other COVID-19 tests or related supplies.
- $22 million for the FDA to support activities associated with diagnostic, serologic, antigen, and other tests and related administrative activities.
- $825 million for community health centers and rural health clinics.
- Up to $1 billion may be used to cover costs of testing for the uninsured.
Inclusion of Reports on Demographic Characteristics is Notable, Alarming Pattern Emerging
The inclusion of a provision to require reports on demographic characteristics is notable and comes after widespread criticism on Capitol Hill from lawmakers like Senator Kamala Harris (D-CA) and Representative Ayanna Pressley (D-MA) that the administration wasn’t doing a good job of tracking and responding to higher rates of infection, hospitalizations, and death in communities of color—primarily for Black Americans.
In recent months, data tracking the coronavirus pandemic has highlighted an alarming pattern when it comes to who’s affected: According to state-level numbers, people of color are disproportionately dying from the virus.
This pattern, the result of inequities in health care access and systemic discrimination within the health care system, has been evident in early demographic data that’s been released by carious places across the country. In Lousiana, Black people make up 57 percent of confirmed coronavirus deaths, and 33 percent of the overall population. In Michigan, Black people make up 40 percent of coronavirus fatalities, and 13.6 percent of the state’s overall population.
There’s been a serious lag in the disclosure of such breakdowns across the board. According to a tracker by Johns Hopkins University, 41 states are currently releasing data on race and the number of cases they’ve detected. In April, the Centers for Disease Control and Prevention released preliminary federal data, though the agency noted it was incomplete. – Vox
THE COVID-19 RACIAL AND ETHNIC DISPARITIES TASK FORCE ACT
Since the passage of the bill, Senator Harris has introduced a new bill—the COVID-19 Racial and Ethnic Disparities Task Force Act, to address the racial disparities that have emerged as part of the crisis. According to a statement from Senator Harris, the bill would require the Department of Health and Human Services (HHS) to establish an interagency task force of policy experts, community leaders, and government officials to make data-driven recommendations to federal agencies about directing crucial resources—like testing kits, testing supplies, and personal protective equipment (PPE)—to communities with racial and ethnic disparities in COVID-19 infection, hospitalization and death rates. The task force’s work would guide a more equitable government response to the COVID-19 pandemic and future public health crises.
“People of color are being infected and dying from coronavirus at astounding rates,” said Sen. Harris in a statement. “This is in part due to persistent lack of access to health care, bias in our health care system, systematic barriers to equal pay and housing, and environmental injustice. It is critical that the federal government proactively work to right historical wrongs that have led to racial inequities for generations. The COVID-19 Racial and Ethnic Disparities Task Force Act is a necessary step to fully understand the impact of this virus in the hardest hit communities, and make targeted investments that correspond with their unique needs.”
The COVID-19 Racial and Ethnic Disparities Task Force would:
Provide weekly resource allocation recommendations to FEMA and Congress including:
- Data on patient outcomes including hospitalizations, ventilation, and mortality disaggregated by race and ethnicity.
- Identification of communities that have high levels of racial and ethnic disparities in COVID-19 infection, hospitalization, and death rates.
- Recommendations to FEMA about how best to allocate critical COVID-19 resources like PPE, ventilators, testing kits, testing supplies, vaccinations (when available), staffing, and funding to these communities.
- Best practices when communities are able to effectively reduce racial and ethnic disparities.
Provide oversight and recommendations to federal agencies about how to disburse COVID-19 relief funds—for instance, the Education Stabilization Fund and the Paycheck Protection Program created under the CARES Act—to address racial and ethnic disparities with respect to the COVID-19 pandemic.
Report to Congress on:
- Structural inequalities preceding the COVID-19 pandemic and how they contributed to racial and ethnic disparities in infection, hospitalization, and death rates.
- The initial federal response to the COVID-19 pandemic and its impacts on racial and ethnic disparities in infection, hospitalization, and death rates.
- Recommendations to combat racial and ethnic disparities in future infectious disease response.
- At the end of the COVID-19 public health crisis, establish a permanent Infectious Disease Racial and Ethnic Disparities Task Force to continue to identify and address racial and ethnic disparities in our health care system and improve future infectious disease response.
Will There be a CARES2 Package?
All signs point to yes—but gear up for a big fight between the Democrat-controlled House and the Republican-controlled Senate on what exactly it contains. As of right now, the Senate is set to return to Washington this week, while the House is still on recess.
Whatever chamber is able to pass a package first will have power and leverage in the process. For example, if Republicans pass another bill out of the Senate that focuses mostly on relief for businesses, there will be pressure on Speaker Nancy Pelosi and the House to take up the Senate package. Alternatively, if Democrats in the House are able to pass a bill that contains widely popular direct financial relief for Americans, additional food aid, additional protections for public health workers, funding for vote by mail, and additional incentives for businesses to keep workers on payroll, Senate Republicans will be under pressure to vote on it. Some are arguing that since the last two packages originated in the Senate and were adopted with no major changes by the House, the House should pass the next package first.
Sources on Capitol Hill report we could see a draft from Democrats in the House as early as Friday.
Whatever chamber is able to pass a package first will have power and leverage in the process. For example, if Republicans pass another bill out of the Senate that focuses mostly on relief for businesses, there will be pressure on Speaker Nancy Pelosi and the House to take up the Senate package. Alternatively, if Democrats in the House are able to pass a bill that contains widely popular direct financial relief for Americans, additional food aid, additional protections for public health workers, funding for vote by mail, and additional incentives for businesses to keep workers on payroll, Senate Republicans will be under pressure to vote on it. Some are arguing that since the last two packages originated in the Senate and were adopted with no major changes by the House, the House should pass the next package first.
Sources on Capitol Hill report we could see a draft from Democrats in the House as early as Friday.
What Will Go In It?
It’s hard to say exactly what might be included in a draft of the CARES2 package, but here are some of the major debates we see unfolding on Capitol Hill:
STATE AND LOCAL AID
Congress allocated $150 billion for state and municipal governments as part of the original CARES package. While Democrats have promised to make more state and local aid their top priority in the next package, Republicans are divided over how to handle it.
The Hill reports that “Speaker Nancy Pelosi estimated that the price tag would be in the neighborhood of $1 trillion—a figure that is already being met with cold water by congressional Republicans.” Senate Majority Leader McConnell described Republicans as “open” to considering more help for states but signaled it would need to be tied to providing additional liability protections for employers who may soon start trying to reopen their businesses (i.e., ensuring they can’t be held responsible if they reopen and an employee gets sick).
The National Governors Association is asking lawmakers for an additional $500 billion and loosened restrictions on how they’re able to spend that money—specifically, allowing for replacement of lost revenue.
Arizona is facing a $1.1 billion deficit. New York Governor Andrew Cuomo has warned of a 20 percent cut to schools, hospitals, and local governments if they do not receive additional aid. Kentucky reports a $500 million shortfall. So far, McConnell has said he won’t support allowing states to plug revenue shortfalls with federal dollars—but other Republicans have signaled their openness.
This will be one of the biggest fights in the next round of negotiations.
IMMIGRANT INCLUSION
During initial consideration of the first CARES package, dozens of groups sent a letter to Speaker Nancy Pelosi and Minority Leader Chuck Schumer urging inclusion of immigrant families in the package.
Expect this debate on the next package to focus on addressing two provisions that exclude millions of immigrant families, including U.S. citizen children: a core provision of Congress’ plan to provide free COVID-19 testing leaves out millions of low- and moderate-income immigrants, and the tax rebate provision excludes mixed-status families and ITIN tax filers.
From the letter:
HEALTH CARE EXCLUSION
The Families First Coronavirus Response Act’s Medicaid state option for the uninsured excludes some green card holders and many other people who are lawfully residing in the US. Federal Medicaid is available only to certain a subset of immigrants who have had a “qualified” immigration status for five years, “humanitarian” immigrants, military/veterans and their families, and in some states, lawfully residing children and/or pregnant women.
Many lawfully residing immigrants — including people granted DACA, most lawful permanent residents during their first five years in that status, survivors of crime granted U visas, people from certain Pacific Island nations, and people with TPS–along with those without status, are ineligible for federal Medicaid.
SOLUTION: Revise section: Emergency Medicaid for Suspected COVID-19 Infections
Ensure that during this public health emergency, testing and treatment of health conditions is provided by Medicaid for all who need it, regardless of their immigration status.
TAX REBATE EXCLUSION
The proposed bill leaves out tax filers who have worked and earned income like other taxpayers covered by this bill by excluding households whose tax returns include taxpayers or children who file with an Individual Taxpayer Identification Number (ITIN). These families include U.S. citizen children and spouses who are also harmed by the COVID-1 crisis. This exclusion of mixed-status families and individual ITIN filers is both deeply unfair and will exclude families hardest hit by this emergency. It could also make it more difficult to ensure that families can shelter in place, to protect public health.
To fully address this crisis and the economic hardships that people will endure, we need to treat all workers who have contributed to the economy and are also devastated by this economic downturn.
SOLUTION: Amend Relief for Individuals, Families, and Businesses Title I: Rebates and Other Individual Provisions
Ensure that all persons who file taxes with a Social Security Number or other individual taxpayer number as defined under 26 U.S.C. 6109 can apply for the rebate.
PRESERVING EMPLOYMENT RELATIONSHIPS FOR ALL BUSINESSES, INCLUDING SMALL BUSINESSES
You can expect Republicans in the Senate to push for additional aid for businesses and both parties to include additional relief for small businesses. The real debate will come over negotiations over provisions in the next package for requirements for corporations to maintain payroll if they receive funds (i.e., not layoff workers if they receive federal dollars) and whether taxpayer funds can be used for executive bonuses, stock buy-backs, or dividends.
Democrats in the House will likely fight to include additional oversight on any federal dollars for businesses, including transparency requirements on political spending of companies that take the funds and lobbying limits on the companies to ensure taxpayer dollars aren’t spent on post-pandemic corporate lobbying efforts.
ADDITIONAL DIRECT FINANCIAL ASSISTANCE, PLUS INCREASED FOOD AID, DEBT RELIEF, AND EVICTION PROTECTIONS
A priority for Democrats in the House during the next round of negotiations will be additional direct financial relief for Americans, but specifics are unclear. Many in the House are pressuring House Speaker Pelosi on including $2,000/monthly, direct cash payments to all individuals and families for the duration of the crisis. Others are calling for a moratorium on evictions, foreclosures, repossessions, and utility shutoffs, including prohibiting debt collection and negative credit reporting for those who have been impacted.
Expect another fight over addition of paid sick leave requirements, unemployment insurance, an expansion of food assistance programs, and increased social security payments for seniors.
PROTECTING PUBLIC HEALTH AND PUBLIC HEALTH WORKERS
Similarly, House Democrats are likely to call for increased federal funding for Medicaid and other health programs that cover low-wage workers, and that testing and treatment are available for all people regardless of immigration status. Some will fight to force the administration to begin a special enrollment period to let people enroll in health care coverage through state exchanges and the marketplace. Finally, it’s likely that the House’s version of the bill will enact an emergency OSHA Standard to protect frontline health workers. It’s likely that there will be a push around Senator Elizabeth Warren (D-MA) and Representative Ro Khanna’s (D-CA) Essential Worker Bill of Rights.
VOTE BY MAIL
Finally, expect a big battle over policies to ensure people can vote safely now and if the crisis lasts until November. Senator Elizabeth Warren’s plan calls for $4 billion in funding to require states to expand safe, early in-person voting and nationwide vote by mail. Speaker Pelosi indicated there will be funding in the next package for these reforms, but it’s unclear just how much will be included and how far Republicans, who have signaled they’re firmly against it, will go to block it.
As the crisis continues, expect Congress to continue to pass legislation to address the pandemic and widespread unemployment and economic hardship. But, as we get closer to November, expect many of these fights to be highly partisan and used to score political points for both sides of the aisle and the White House. Continue to follow Atrómitos on LinkedIn for breaking news and updates, and reach out to us if you’d like to talk more about our policy and research capabilities.