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Republicans universally rejected a $3 trillion stimulus measure drafted by House Democrats to bolster the U.S. economy, but the draft plan has the seeds for an eventual, smaller compromise, Bloomberg News reported. With House Speaker Nancy Pelosi (D-Calif.) pushing the House toward a Friday vote on the Democratic package, a Senate Republican aide said that Majority Leader Mitch McConnell (R-Ky.) doesn’t plan to move on any GOP alternative until June at the earliest. The framework for a compromise — probably still weeks away — likely will be built on state and local government aid, expanded tax breaks and legal protections for businesses and assistance for unemployed workers. There are several pressure points looming that will increase the stakes, including expiring pandemic unemployment insurance and Paycheck Protection Program provisions at the end of July, and the Sept. 30 ending of grant funding for airlines, as well as the fiscal year. Republicans are counting on the lifting of lockdowns in many states along with the previous stimulus money still flowing out to juice the economy enough that another big spending package won’t be necessary. That aligns them with President Donald Trump, who has said he’s in “no rush” for another stimulus package. Treasury Secretary Steven Mnuchin, who was a linchpin in the negotiations that produced the previous stimulus bills, dismissed the Democratic bill and said that both sides should spend the next 30 days assessing how well those earlier efforts are working. Federal Reserve Chairman Jerome Powell yesterday urged Congress to keep spending in order to avoid long-term damage. “Additional fiscal support could be costly, but worth it if it helps avoid long-term economic damage and leaves us with a stronger recovery,” he said. Read more.

The “Health and Economic Recovery Omnibus Emergency Solutions Act” (HEROES Act), introduced on May 12 by Rep. Nita Lowey (D-N.Y.), is the latest legislative spending package aimed at stabilizing the economy amidst the COVID-19 pandemic. In addition to providing funding for states, localities and territories to pay essential workers, conduct additional testing and provide an additional round of direct payments to households, the legislation has included a few bankruptcy provisions. According to the bill summary:

• Sec. 20104 protects Economic Impact Payments from any form of transfer, assignment, execution, levy, attachment, garnishment, legal process, bankruptcy or insolvency law, and any other means of capture prohibited for payments made under Chapter 7, Subchapter 2, of the Social Security Act.

• Section 90001 (c) makes a technical clarification to ensure that hospitals in bankruptcy still qualify for PPP loans due to the essential nature of their operations.

• Sec. 110203 extends and expands the eviction moratorium and foreclosure moratorium in the CARES Act to include all renters and homeowners, improves the forbearance provided under the CARES Act, and specifies the loan modifications and loss mitigation that should be available to homeowners following a moratorium to prevent any homeowner from facing a lump-sum payment that they cannot afford. Additionally, this section protects federal relief payments from being taken in bankruptcy proceedings, ensuring that homeowners in bankruptcy proceedings can participate in the mortgage forbearance program created by the CARES Act and other COVID-19 mortgage assistance; increases the amount of home equity protected in the bankruptcy process to $100,000; makes it easier for homeowners to exit bankruptcy so they can resume normal economic activity and continue paying off their mortgages; and opens up chapter 13 to more homeowners and small businesses by raising the limits for debt to qualify for a bankruptcy through chapter 13.

Click here for the bill text.

Click here for the bill summary.

Speaker Nancy Pelosi (D-Calif.) and House Democrats are planning to move ahead with a Friday vote on a $3 trillion package to respond to the coronavirus crisis, Politico reported. President Donald Trump and Senate Republicans also object to the Democratic proposal, saying that there hasn’t been enough time since the $2 trillion CARES Act passed to determine whether new legislation is needed or necessary. Democrats released their sprawling package, known as the Heroes Act, on Tuesday afternoon. The legislation includes $875 billion for cash for state and local governments, which Democratic leaders say is the centerpiece of this coronavirus relief package. It also includes $20 billion each for tribal nations and for U.S. territories. The measure also includes provisions to support multi-employer pensions. The legislation also includes a slew of liberal priorities left out of previous bills, including $75 billion for mortgage relief and $100 billion in assistance for renters, $25 billion for the U.S. Postal Service and $3.6 billion to shore up elections. The bill goes further than previous bills in other ways, too: It would include another round of $1,200 checks for adults making up to $75,000. Under this bill, kids would receive the same amount, instead of $500. It would make $10 billion available to small businesses that haven’t received funds from the Paycheck Protection Program. Republicans dismissed the bill even before the text was public, calling it a Democratic wishlist that would not move in the GOP-controlled Senate. Read more.

In related news, Congress is looking to help struggling local newspapers, TV and radio stations qualify for federal coronavirus aid, the Wall Street Journal reported. The coming coronavirus legislation expected to be introduced in the House as soon as this week will include a provision to expand newspapers’ and broadcasters’ eligibility for forgivable small business loans, the people said. Meanwhile, Sens. Maria Cantwell (D-Wash.) and Amy Klobuchar (D-Minn.) are working to find ways to move the proposal forward in the Republican-controlled Senate. “The Covid-19 crisis has shown us how essential local news and information is to us,” Cantwell said. “Now is not the time to cut newsroom jobs critical to giving the public regional data and news on Covid-19 outbreaks.” Many local news outlets haven’t been able to apply for the Small Business Administration’s forgivable Paycheck Protection Program loans because of “affiliation rules” that force them to be measured by the size of their parent companies. The new provision to be considered by Congress would waive such rules when it comes to local news outlets. Read more. (Subscription required.)