Law360 (April 23, 2020, 7:36 PM EDT) -- The U.S. House on Thursday overwhelmingly approved nearly half a trillion dollars for coronavirus relief to small businesses and health care providers after a party-line vote for a new Democrat-led oversight panel and a scrapped plan for lawmakers to vote remotely.
Representatives were almost unanimous in approving the $484 billion package on a bipartisan vote of 388-5-1 that took about 90 minutes as members voted in shifts to allow for social distancing. President Donald Trump has signaled his support and is expected to sign the bill with more than $370 billion for small businesses, $75 billion for health care and $25 billion for testing.
The deal came together earlier this week and won Senate approval Tuesday, 12 days after senators blocked a Republican plan to replenish funding for small-business loans and a Democratic counteroffer with money for health care, food stamps, and state and local governments. Negotiations led to some additions sought by Democrats.
Opposition came from four Republicans — Reps. Andy Biggs of Arizona, Ken Buck of Colorado, Jody Hice of Georgia and Thomas Massie of Kentucky — and Rep. Alexandria Ocasio-Cortez, the progressive New York Democrat. Republican-turned-independent Rep. Justin Amash of Michigan voted present.
Although some Republicans have publicly urged a pause on new spending, a Senate GOP aide told Law360 that policymakers privately expect further relief bills, including some support for state and local governments.
Money for Small Businesses and Health Care
The Paycheck Protection Program and Health Care Enhancement Act includes $75 billion for health care, which the U.S. Department of Health and Human Services will distribute to providers treating COVID-19 patients. It can help pay for additional personal protective equipment as well as setting up additional hospital spaces. It can also reimburse providers for pandemic-related expenses as well as lost revenues "attributable to the coronavirus."
The $25 billion for testing and contact tracing goes to both state and federal authorities to develop and fund widespread testing for infection as well as possible immunity. It can be used for employer-administered testing.
The bulk of the relief package goes to small businesses.
About $310 billion goes to replenish the Paycheck Protection Program, which offers government-backed private loans that can be forgiven if companies keep paying employees. Nearly a fifth of the new funding is reserved for small and midsize banks, credit unions and community development finance institutions. About $10 billion more will go toward administrative costs and other efforts. Another $50 billion goes to Small Business Administration disaster loans along with $10 billion for small grants.
The Paycheck Protection Program burned through about $350 billion in its first 13 days and could use up the new funding quickly.
Sen. Marco Rubio, the Florida Republican who chairs the Small Business Committee, said Monday on CNBC that he anticipates a backlog of nearly a million applications. Richard Hunt, president of the Consumer Bankers Association, told Politico he expects the new loan guarantees will be claimed within 48 to 72 hours.
Congress might add more funding, but that might wait until the next major relief package, which could be weeks away. Rep. Derek Kilmer, D-Wash., last week introduced a bipartisan bill with 22 co-sponsors to authorize $900 billion. Although that might not pass as a stand-alone measure, it illustrates lawmakers' willingness to keep adding money.
While broadly popular, the Paycheck Protection Program has faced scrutiny over who has and has not gotten the forgivable loans. On Thursday, the Treasury Department said publicly traded companies probably can't justify receiving the money. A few hours later the parent company of Ruth's Chris Steakhouse announced it would start repaying the $20 million it received.
Small businesses have filed class actions alleging Wells Fargo Bank NA and JPMorgan Chase gave preference to larger small businesses. Businesses seeking access to the forgivable loans include tribal casinos, lobbyists, cannabis retailers and a strip club.
New Oversight Panel
With a party-line vote of 212-182, the House also set up an investigative panel to review the federal coronavirus response. The Select Subcommittee on the Coronavirus Crisis will be the sixth subcommittee of the Committee on Oversight and Reform. Subpoena power is given to its chairman, Majority Whip Jim Clyburn, D-S.C. It can have as many as 12 members, including up to five Republicans.
"Our work will be forward looking," Clyburn said in a statement after the vote. "To inform our recommendations to emerge from this crisis and improve our preparedness for future pandemics, we must look at the totality of our current response. ... I think all Americans would agree that the response to COVID-19 has not been perfect. The Select Subcommittee will give us the tools needed to work toward a more perfect response to this and future pandemics."
Republicans opposed the new panel, which they predicted will become a partisan attack on the Trump administration. They also argued it was redundant given the three new oversight mechanisms established by the $2 trillion CARES Act: a bicameral and bipartisan Congressional Oversight Commission, a Special Inspector General for Pandemic Recovery and a Pandemic Response Accountability Committee, a special panel of the inspectors general association.
Given the layers of oversight and level of public attention, employers know aid comes with strings attached, and white-collar attorneys warn of major fraud risks.
Remote Voting Plan on Hold
House Democratic leaders scrapped a planned vote on a resolution that would have changed the chamber's rules to allow proxy voting during a pandemic by letting members designate colleagues to register their votes. Pelosi has said any rules changes should be bipartisan to avoid allegations of a power grab, and Republicans generally opposed the plan.
Supporters said this approach would allow a return to transparent roll-call votes while reducing the number of people gathered in the chamber and allowing members with vulnerable family members to vote remotely. The low-tech approach avoids hacking vulnerability. Many Republicans, though, said Americans deserved to have their representatives vote in person and bridled at changing centuries-old practices.
Rules Committee Chairman Jim McGovern, D-Mass., took to the House floor Thursday and called sticking with the status quo "unacceptable and dangerous." The panel's top Republican, Rep. Tom Cole of Oklahoma, responded that the executive branch had continued working, with appropriate precautions, and said he "will be extraordinarily cautious about giving up procedures and precedents that are 230-plus years old."
Pelosi dropped the proxy-vote vote Wednesday and instead set up a bipartisan committee on remote voting and reopening the House. The panel includes Majority Leader Steny Hoyer, D-Md., and Minority Leader Kevin McCarthy, R-Calif., along with top leaders from the Rules and House Administration committees. Hoyer and McCarthy met Thursday and promised to talk again next week.
The chamber's coronavirus response has divided along partisan lines in other ways too. Democratic members uniformly wore masks at the Capitol on Tuesday except when making speeches, while many Republicans gathered without facial coverings.
What Comes Next?
While Democrats have been discussing proposals for another massive relief bill — the Senate's Democratic leader said this week that he expects a package "similar in size and ambition" to the $2.2 trillion CARES Act — Senate Majority Leader Mitch McConnell has publicly called for a pause.
"Ultimately, we can't borrow enough money to prop up the economy for an indefinite period of time," the Kentucky Republican told a local radio station Thursday. He has been skeptical of sending more money to state and local governments, suggesting Wednesday that he'd rather see a bankruptcy option for states.
Republicans have increasingly voiced fiscal concerns. Congress already has authorized $2.9 trillion in coronavirus spending, according to the nongovernmental Committee for a Responsible Federal Budget. This week's "interim" package will bring that to about $3.5 trillion — more than the government spent last fiscal year on the military, Social Security and Medicare combined.
However, a senior Senate GOP aide told Law360 that "everyone sees the writing on the wall that eventually there has to be something for state and local governments."
And the Trump administration's lead negotiator sounded open to continued relief.
"This is a war and we need to win this war and we need to spend what it takes to win the war," Treasury Secretary Steven Mnuchin said Wednesday in a Fox Business interview.
"We are sensitive to the economic impacts of putting on debt," he said, but "interest rates are very low, so the cost of carrying the debt to the American taxpayer is quite low."
--Editing by Bruce Goldman.
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