Update from Washington on Stimulus Packages

April 21, 2020

As we have been reporting during our twice weekly COVID-19 NYS Council Member Agency support calls,  the emergency funding package (discussed below) can be thought of as emergency stimulus package 3.5.  It includes additional resources for the Paycheck Protection Program as well as other important needs,  it does not appear include several of the critical ‘asks’ we have been pushing for including the $38.5B the National Council and ASAM requested several weeks ago, as well as all important detail regarding how the remaining $70B (of the $100B for hospitals and healthcare passed several weeks ago) will be distributed, and ‘Hazard Pay’ for frontline workers. 

We do expect another round of funding (we would call that package ‘4.0’) shortly but as the days pass and lawmakers in Washington continue to argue about which priorities come first it does seem as if the path to securing the resources we are waiting for will be bumpy at best.   Stand by for more.

Roll Call article, 4/21/2020, 1:45 pm

Top Democrats and the Trump administration reached agreement Tuesday on a $482 billion aid package that would replenish a popular small-business loan program and provide funding for hospitals facing financial shortfalls due to COVID-19.

The agreement is expected to pass the Senate by unanimous consent during an afternoon session with the House on track to follow Thursday, though lawmakers in that chamber need to return to Washington for a recorded vote.

President Donald Trump tweeted support for the measure in advance of the legislation’s initial release and said he would sign it.

He said additional items left out of the latest bill, like more funding for states and localities, could be included in the next round of aid.

Top Democrats are calling the small-business and health care package moving through Congress this week an “interim” measure to serve as a bridge to a larger bill that could be considered next month.

The next bill could include another round of direct payments to households as well as an extension of new jobless benefits provided in the $2 trillion aid package enacted last month.

‘Interim’ bill details

The emerging legislation set for Senate floor action Tuesday will include $310 billion to restart the Small Business Administration’s so-called Paycheck Protection Plan, which ran out of money late last week amid higher-than-expected demand for the forgivable loans designed to keep workers on the payroll while businesses are closed due to the pandemic.

An extra $10 billion is included for administrative costs, such as fees paid to lenders participating in the program, according to sources familiar with the plan who weren’t authorized to speak publicly.

A total of $60 billion of the PPP funding would be set aside specifically for smaller lenders and those serving communities where relationships with more established financial institutions that dominate the SBA program are scarce.That pot of money for “underbanked” communities will be divided in half between lenders with less than $10 billion in assets and those with between $10 and $50 billion in assets.

The new loan program funds could run out nearly as fast as the previously approved funding, which lasted about 14 days. That will likely put a timer on Congress’ efforts to negotiate a larger, more sweeping aid package that Republicans, Democrats and the Trump administration all agree is needed.

“The first [round] went like hotcakes. So the second one could go like hotcakes too,” National Economic Council Director Larry Kudlow said Monday of the PPP funding.

This bill would provide $50 billion more for emergency disaster loans, another popular program that businesses are using to try to stay financially solvent as they remain closed to reduce the spread of the virus.

There will also be $10 billion for grants of up to $10,000 each that disaster loan recipients can obtain, and $2.1 billion for the administrative costs of running that program.

Hospitals and other health care facilities will receive $75 billion to help treat patients with the virus and address funding shortfalls they are facing as a result of the pandemic.

The number represents a compromise between Democrats, who pushed for $100 billion, and Republicans, who wanted to wait until a later package to provide any funding on top of the $100 billion in the roughly $2 trillion package Congress approved last month. The money will go into the Department of Health and Human Services’ Public Health Social Services Emergency Fund.

Lawmakers included $25 billion for more COVID-19 tests as well as a national testing strategy, something Democrats and governors have been urging so state officials can begin to think about reopening their economies once cases begin to subside.

The testing funds will be divided between the federal government, and state and local governments, according to House Majority Leader Steny H. Hoyer.

The White House on Monday threw its support behind additional funding for states to conduct contract tracing, a process where health officials can track who a patent has interacted with so they can enter quarantine and get tested.

Governors come up short

Governors and city and county officials wanted the bill to include funding to help address budget shortfalls they face as tax revenues drop off a cliff and spending increases sharply.

There’s no additional direct aid in the latest package, although the White House made a commitment that states could use the $150 billion provided in the previous aid bill to help address lost revenues, according to Senate Minority Leader Charles E. Schumer, D-N.Y.

“We have said with one voice, you want the governors to do the job, we need you to provide funding for state governments,” New York Gov. Andrew Cuomo said Monday.

Without sufficient funding from the federal government, Cuomo said, New York would have to cut aid to schools, local governments and hospitals by 20 percent each.

“This is the worst time to do this,” Cuomo said.

The bill also doesn’t include additional food aid. Democrats originally requested this “interim” bill include a 15 percent increase to the maximum monthly benefit received by people on the Supplemental Nutrition Assistance Program. Republicans were opposed.

Lindsey McPherson and Niels Lesniewski contributed to this report.