Legislative Update: Continued Coronavirus Relief and USMCA Enactment

Coronavirus Stimulus

On April 23, the House passed an additional $484 billion in relief for coronavirus in what has been dubbed the “Phase 3.5” coronavirus relief bill. The Senate led in passing the bill on April 21.

President Donald Trump immediately signed the measure into law so that the $322 billion in additional loans for small businesses and nonprofits under the Paycheck Protection Program (PPP) could go to companies that were not able to get loans before the funding was depleted in the Phase 3 legislation.  Sixty billion of the total amount is designated to smaller community lenders and companies, including minority-owned businesses. The bill also includes $60 billion for Small Business Administration (SBA) Economic Injury Disaster Loans (EIDL), $75 billion for hospitals and healthcare providers, and $25 billion for coronavirus testing. The legislation does not provide funds for states and localities to help cover revenues lost because of the pandemic, as requested by Democrats. Republicans are concerned that some states might use the emergency funding to address “pre-existing” fiscal shortfalls that were in place prior to the pandemic.

Senate Majority Leader Mitch McConnell (R-KY) announced that the Senate will reconvene on May 4 while modifying its routine in ways that allow the chamber to work in a safe environment. House Majority Leader Steny Hoyer (D-MD) also announced that the House would also return on May 4, but reversed course the next day after consulting the House attending physician.  The doctor and leadership deemed it not safe for more than 400 members to return due to the number of coronavirus cases in Washington, D.C. are still rising.  House Democrats continue to work on the text of the “Phase 4” (also called CARES 2) coronavirus stimulus bill.  The caucus will focus heavily on aid to the state and local governments that is expected to be equivalent to the amount of assistance given to small businesses. It is unknown if infrastructure will be included in this bill or be moved to the “Phase 5” bill as previously indicated by leadership.

There has been some disagreement between Republican leadership and rank-and-file members on what a future Phase 4 bill should look like. Senate Majority Leader McConnell, Majority Whip John Thune (R-SD) and Republican Conference Chair John Barrasso (R-WY) prefer to open up the economy and pause any new spending due to deficit increases. The White House had previously said it supported the idea of unrestricted state and local aid when negotiating with Democrats but has started reversing its support since talking further with Republican leadership. Meanwhile, there are some notable and well-respected Republican senators pushing back against GOP leadership, saying that Congress needs to assist states that have lost substantial revenue due to the COVID-19.

USMCA

The United States on April 24 formally notified Congress that Mexico and Canada have taken the necessary steps to comply with the U.S.-Mexico-Canada Agreement (USMCA). The move sets the agreement to enter into force on July 1, leaving many senior lawmakers and stakeholders questioning whether all parties will be able to meet the terms of the deal.  House Ways and Means Chairman Richard Neal (D-MA) says he will ensure Congress plays a critical role in monitoring and providing oversight of the USMCA’s implementation and enforcement.