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McConnell Announces 'in Principle' Agreement with Trump on New Coronavirus Relief

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The White House and Senate Republican leaders reached an agreement in principle for a fifth round of coronavirus relief, totaling about $1 trillion, including more direct payments to Americans and an extra $16 billion for testing, The Washington Times reported. Senate Republicans are expected to release various parts of the legislation Monday, facing an end-of-the-month deadline for the expiration of $600 weekly unemployment benefits that many Republicans call overly generous. “The administration has requested additional time to review the fine details, but we will be laying down the proposal next week,” said Senate Majority Leader Mitch McConnell (R-Ky.). President Donald Trump expressed disappointment that the plan won’t include his proposed payroll tax cut through the end of the year. “I think it’s great for the workers, [but] the Democrats would never have gone for it,” President Trump said. “They’re not big into the workers, I guess. We need their votes. You still need Democrat votes.” The president hailed a provision to spend $105 billion to help schools reopen safely during the pandemic, including mitigation such as smaller class sizes, masks and more teachers’ aides. The proposal will include a funding provision to allow parents to send their children to the school of their choice, including private or religious schools, if public schools don’t reopen.
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Second Stimulus Payment Could Deliver Cash Even Faster

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Congress is poised to approve a second round of stimulus payments for U.S. households, and money could reach many Americans faster this time, The Wall Street Journal reported. The Internal Revenue Service now has procedures, online tools, bank-account information and coordination with other agencies that it didn’t have set up in advance when the first round of payments was approved in the spring. Now it is up to Congress to approve the second round of payments, set all the details and send a bill to President Trump for his signature. That still could take weeks, but once that happens, money can start flowing. House Democrats passed a bill in May that would offer $1,200 per adult and $1,200 each for up to three dependents. It would also expand eligibility to groups that were excluded from the earlier round, including adult dependents, college-student dependents and households where some people are citizens but others aren’t. Senate Republicans and the Trump administration, meanwhile, want to repeat the first round of payments, Treasury Secretary Steven Mnuchin said. That means $1,200 per adult and $500 per dependent. The Senate Republican plan is likely to include payments for all dependents, not just the children eligible for the first round, said a person familiar with the proposal. The House and Senate plans would both start shrinking payments for individuals with incomes over $75,000 and married couples with incomes over $150,000.
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Flashpoints Emerge as Lawmakers Negotiate New Virus Aid

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Bipartisan Capitol Hill talks have only just begun on a sweeping renewal of coronavirus legislation, but areas of likely agreement — and flashpoints of discord — are becoming apparent as the package starts to take shape, the Associated Press reported. The Democratic House passed a whopping $3.5 trillion coronavirus response bill more than two months ago, re-upping a $600 per week federal unemployment benefit that expires July 31, another round of $1,200 payments to most people, and almost $1 trillion for cash-starved states and local governments. The GOP’s $1 trillion-plus response, expected shortly, will have far less money and will feature a sweeping liability shield for schools, businesses, and charities that are trying to reopen. It’s up to top congressional leaders to bridge the gaps. The article details aspects that are likely to be in the final bill.
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Journal Issue
Sept 2020
Bankruptcy Code
11 U.S.C. § 363
Bankruptcy Rule
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McConnell Previews GOP Coronavirus Relief Bill

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Senate Majority Leader Mitch McConnell (R-Ky.) provided a broad outline for what to expect in the forthcoming Republican coronavirus relief proposal, including help for schools, small businesses and testing, The Hill reported. He indicated that he would soon be unveiling the Republican proposal after swapping ideas with the administration in recent weeks. Sen. McConnell outlined the major pillars of the forthcoming bill as jobs, health care, kids in school and liability protections. But he also provided new details including that Republicans would include $105 billion in help for schools and provide more help for businesses, who have been hit hard as the spread of the coronavirus forced many to close or scale back. "The American job market needs another shot of adrenaline. Senate Republicans are laser-focused on getting American workers their jobs back," Sen. McConnell said. In addition to another round of Paycheck Protection Program loans, he said that the Republican proposal will reimburse businesses for expenses tied to protective equipment, testing and structural changes that need to be made to protect workers and customers. Sen. McConnell also indicated that the bill would include another round of stimulus checks. He did not provide details on who would qualify but has previously talked about Americans who make up to $40,000 per year, in particular, needing additional assistance.
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As Debt Climbs to Record $27 Trillion, Congress Says It's Not Time to Turn Off Stimulus Spending

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As the national debt approaches $27 trillion, Congress says federal stimulus spending must continue due to the pandemic, Just the News reported. The government spent $864 billion more than it took in during June, bringing the deficit to a record $2.7 trillion so far this year. According to Treasury Department data, the debt held by the public is $20.6 trillion and the total outstanding national debt is more than $26.5 trillion. In 2019, the U.S. gross domestic product  was about $21.4 trillion. Rep. Thomas Massie (R-Ky.) said in June that he thinks the national debt will hit $40 trillion by the end of the coronavirus pandemic. Some experts have predicted that the debt held by the public will soon exceed the nation's entire GDP. Despite the rising deficit, a fourth coronavirus stimulus package is being crafted in the GOP-led Senate after the Democratic-led House passed the $3 trillion HEROES Act in May. Senate Majority Leader Mitch McConnell (R-Ky.) has said that any additional coronavirus stimulus package that passes in the Senate would be the last one. A formal proposal has not been released yet. 
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Mnuchin Gives Hints of PPP Changes in Next COVID-19 Relief Bill

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Treasury Secretary Steven Mnuchin hinted Friday at potential changes to a forgivable loan program that’s been a lifeline for small businesses hurt by COVID-19, Roll Call reported. Mnuchin told the House Small Business Committee that the next round of coronavirus relief legislation, which the Senate is expected to begin negotiating in earnest next week, should amend the Paycheck Protection Program (PPP) to allow the hardest hit companies to apply for a second loan. There is now around $130 billion available for new loans. Senate Small Business and Entrepreneurship Chairman Marco Rubio of Florida has said that he wants the next coronavirus relief package to repurpose that money for another round of PPP loans. Businesses that have seen larger revenue declines would be allowed to apply for a larger forgivable loan, which could be used more broadly than current PPP loans. Mnuchin reiterated his support for those tweaks. “Next phase relief should extend the PPP, but on a more targeted basis for smaller companies, and those that are especially hard hit, such as restaurants, hotels and other travel and hospitality businesses,” he said, later emphasizing that eligibility should cover all businesses that have had “significant revenue declines,” rather than targeting specific industries. Mnuchin also expressed support for ideas contained in a bill from Democratic Sen. Michael Bennet of Colorado and Republican Sen. Todd Young of Indiana that would take the PPP and allow businesses that have seen their revenues decline by at least a quarter apply for 6-months’ worth of fixed operating costs and payroll.
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Yellen, Bernanke Urge Congress to Extend Unemployment Benefit Boost

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Former Federal Reserve chiefs Janet Yellen and Ben Bernanke urged lawmakers Friday not to let a boost to unemployment benefits expire at the end of July and to spend generously while interest rates are low to power the U.S. through the coronavirus pandemic, The Hill reported. In testimony before the special House coronavirus subcommittee, they warned lawmakers that the U.S. could face deep, permanent economic damage without more than $1 trillion in further stimulus. Their appearance comes as congressional leaders begin formal negotiations over the size and scope of another pandemic response and economic rescue package. They said that the next congressional stimulus measure should focus on three areas: investing in the medical response to the pandemic, extending enhanced unemployment benefits, and giving local governments enough financial support to sustain crucial services amid steep revenue shortfalls. “We do not believe that concerns about the deficit and debt should prevent Congress from responding robustly to this emergency,” Yellen said. “The top priorities at this time should be protecting our citizens from the pandemic and pursuing a stronger and equitable economic recovery," she added. They have previously advocated for those positions with more than 150 fellow economists in a letter to congressional leaders last month. Their testimony also served as a more forceful, direct version of Fed Chairman Jerome Powell’s call for extended unemployment benefits and ample aid for state and local governments. But their Friday appearance before lawmakers, the first for each since they left the Fed, comes as the White House and Congress face a narrowing window to avoid a lapse in fiscal support.
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White House Warns Stimulus Package ‘Must’ Include Trump Payroll Tax Cut Proposal

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The White House is insisting that Congress include a payroll tax cut as part of the next coronavirus stimulus package, potentially complicating talks with lawmakers by pushing a measure that President Trump has tried but failed to advance for almost a year, the Washington Post reported. “President Trump wants to provide relief to hard working Americans who have been impacted by this virus and one way of doing that is with a payroll tax holiday,” White House spokesman Judd Deere said in a statement. “He’s called on Congress to pass this before and he believes it must be part of any phase four package.” Trump’s renewed push for a payroll tax holiday comes as Senate Majority Leader Mitch McConnell (R-Ky.) prepares to unveil legislation next week that he hopes will launch negotiations on the next major coronavirus bill. Key Republican senators have been cool to the idea of a payroll tax cut in the past, partly because it only helps workers who are actually employed. Congress has rebuffed Trump’s previous demands for a payroll tax cut for individuals, instead approving a round of checks to individual Americans as part of the $2 trillion CARES Act in March.

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H.R. 7010, the "Paycheck Protection Program Flexibility Act of 2020" (P.L. 116-142)

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To amend the Small Business Act and the CARES Act to modify certain provisions related to the forgiveness of loans under the paycheck protection program, to allow recipients of loan forgiveness under the paycheck protection program to defer payroll taxes, and for other purposes.
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Full bill text.
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