GOP Virus Relief Package Includes $29B For Defense

By Daniel Wilson
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Law360 (July 28, 2020, 2:07 PM EDT) -- Senate Republicans' proposed $1 trillion COVID-19 assistance package contains $29.4 billion in defense funding, including nearly $11 billion for contractors affected by the virus and $5.3 billion for new Defense Production Act deals.

Alongside more Paycheck Protection Program funding and billions of dollars for vaccine development, the Health, Economic Assistance, Liability and Schools, or HEALS, Act unveiled Monday includes billions of dollars to help prop up struggling defense contractors and fund U.S. Department of Defense purchases not in its initial 2020 budget.

"[The bill includes] nearly $30 billion to bolster the U.S. defense industrial base, which is important to all of us," Senate Appropriations Committee Chairman Richard Shelby, R-Ala., said on the Senate floor Monday.

The biggest single chunk of defense funding is $10.85 billion to support claims made by defense contractors under Section 3610 in the earlier Coronavirus Aid, Relief and Economic Security, or CARES, Act relief package, meant to help keep employees "in a ready state" if unable to work because of COVID-19.

DOD officials have repeatedly urged Congress for that funding, saying they don't have the flexibility in their budget to make additional Section 3610 payments without dipping into money intended for readiness and modernization programs.

Defense industry groups had also been clamoring for an extension to Section 3610 funding, which is set to expire at the end of the fiscal year on Sep. 30, saying their workforce readiness problems will persist past that point, and the HEALS Act will extend that deadline, as well as the deadline to spend other defense-related CARES Act funding, by a year.

The package also includes a little more than $8 billion for additional funding for defense acquisitions, which includes $2.2 billion for Navy shipbuilding — $1.45 billion of which is earmarked for four medical ships — $1.07 billion for P-8A Poseidon anti-submarine aircraft for the Navy, and $686 million for F-35A fighter jets for the Air Force.

And there would be $5.3 billion available for purchases under Title III of the Defense Production Act, or DPA, which can be used to create, maintain, or expand domestic production capabilities considered critical to national defense. That funding would be used to support "critical industrial partners and fragile small business providers," the Senate Appropriations Committee said in a summary of the bill.

So far during the pandemic, the DOD has used DPA authority to provide hundreds of millions of dollars in support for defense suppliers in industries such as aviation, shipbuilding, rare earth mineral production and electronics manufacturing.

Other supplemental funding in the bill includes $2.6 billion in operations and maintenance funding, intended for example to build temporary facilities to allow troops to quarantine when being deployed internationally or returning from deployment and to buy nonmedical personal protective equipment.

The HEALS Act is the fourth COVID-19 congressional relief package proposed since March and needs to be reconciled with Democrats' competing bill, the more than $3 trillion Health and Economic Recovery Omnibus Emergency Solutions, or HEROES, Act that passed the House in May.

But Senate Minority Leader Sen. Chuck Schumer, D-N.Y., criticized the Republican proposal as "totally inadequate" in remarks Monday and the Appropriations Committee's ranking Democrat, Sen. Patrick Leahy of Vermont, also criticized the bill in a statement for including $8 billion for "what appears to be a wish list from the Department of Defense."

"What does this have to do with the immediate crisis?," he said. "The bill provides nothing to address the long lines at food banks and shortchanges education and child care, but we can shore up the defense industry? I am at a loss for words."

--Additional reporting by Andrew Kragie. Editing by Stephen Berg.

For a reprint of this article, please contact reprints@law360.com.

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