The Continuing Resolution was enacted to level fund government through December 11, COVID-19 stimulus talks continue, Supreme Court justice nominee Amy Coney Barrett’s hearings have begun, the president survives Covid-19, and the elections rage on in key battleground states that could flip the White House and Senate to Democratic control for the first time since the 2009-2011 congressional term. G2G has continued to conduct dozens of Hill and agency meetings per week via Zoom/Google/Teams/Uber Conference lines. Both sides of the aisle are consumed with the coronavirus response, policies and funding, but are not ignoring other issues either and all are eager for election day to pass and to finish up the FY2021 appropriations bills that will now be combined into an omnibus package. We have heard repeated references about working on new legislation and opportunities in the coming year.
Details on elections, appropriations and budget process, health, Covid-19 updates, defense, economy, and STEM and innovation are below.
With just three weeks until Election Day, polling shows 48% of likely Michigan voters back Biden, while 40% support Trump. In Wisconsin, 51% of likely voters back Biden and 41% support Trump. Ohio remains a dead heat and Florida remains the key battleground state that must be won in order to win the electoral college. Of note, in 2016 Trump won by just 0.23% in Michigan, 0.77% in Wisconsin, 8.1% in Ohio, and 1.2% in Florida. Other key states are Pennsylvania which consistently favors Biden in polling and two states that usually vote Republican but are showing signs of turning blue this year: North Carolina that Trump won by 3.7% in 2016 (partly due to GOP Senator Thom Tillis struggling to get re-elected, massive population boom in the past few years of those who do not identify with either party and strong turnout of supporters of Obama who won the state in 2008) and Arizona that Trump won by 3.5% in 2016 (partly due to popularity of first-time Senate candidate Mark Kelly, astronaut and husband of former Congresswoman Gabby Giffords).
As for Senate races, the Senate Judiciary Chair Lindsey Graham was just added, following an influx of cash to his opponent Democrat Jaime Harrison, who raised $57 million during the final full quarter of the campaign. Harrison, the first Black chairman of the state’s Democratic Party, has raised the largest single-quarter total by any candidate in U.S. Senate history. Alabama Democrat Doug Jones continues to be extremely vulnerable, as the state remains largely Republican. Republican Susan Collins of Maine remains down in public polls with state House Speaker Sara Gideon maintaining a current advantage. Collins has not benefited from her previous support for President Trump’s nominees to the Supreme Court, nor has she won back voters who did not agree with her 2018 vote to confirm Justice Brett Kavanaugh. Michigan Democrat Gary Peters is also back on the list as his race against GOP challenger John James has tightened. Other competitive contests are occurring in Colorado, Arizona, and North Carolina. Democratic prospects have improved as their challengers raised record amounts of campaign cash and President Trump’s standing has dropped. Republicans, though, believe a partisan battle over the Supreme Court following Justice Ruth Bader Ginsburg’s death could consolidate GOP voters around their vulnerable incumbents. Details on key races in both the Senate and House are below.
Georgia – Sen. David Perdue (R) v Jon Ossoff (D)
Iowa – Sen. Joni Ernst (R) v Theresa Greenfield (D)
Maine – Sen. Susan Collins (R) v Sara Gideon (D)
Montana – Sen. Steve Daines (R) v Governor Steve Bullock (D)
North Carolina – Sen. Thom Tillis (R) v Cal Cunningham (D)
Arizona-06 – Schweikert
California-25 – Garcia
Indiana-05 – Open
Missouri-02 – Wagner
Nebraska-02 – Bacon
New Jersey-02 – Van Drew
New York-02 – Open
Ohio-01 – Chabot
Pennsylvania-10 – Perry
Texas-21 – Roy
Texas-22 – Open
Texas-24 – Open
Virginia-05 – Open
California-21 – Cox
Florida-26 – Mucarsel-Powell
Iowa-01 – Finkenauer
Iowa-03 – Axne
Minnesota-07 – Peterson
New Mexico-02 – Torres Small
New York-11 – Rose
New York-22 – Brindisi
Oklahoma-05 – Horn
Utah-04 – McAdams
Virginia-02 – Luria
Virginia-07 – Spanberger
On October 6, one day after being released from the hospital after contracting Covid-19, President Trump blamed Speaker Pelosi (D-CA) for the failure to reach an agreement on the coronavirus relief legislation and called off all negotiations. The stock market plunged (which was already teetering as traders have been warning of market volatility for some time). By nightfall, Trump sent multiple tweets that reversed his stance, calling for the immediate approval of $25 billion in support for the airlines and another $135 billion for small businesses. However, the Democrats are also seeking more funds for coronavirus response needs spanning from healthcare to childcare to unemployment benefits. On October 2, the House passed by 214-207 their $2.2 trillion revised HEROES bill, which includes a second round of $1,200 stimulus checks, $600 weekly federal unemployment benefits, $436 billion in new state and local aid, $282 billion for education and childcare, new money for airline and restaurant industries, Affordable Care Act subsidies for the unemployed, increased federal matching funds for Medicaid and additional money for providers, among other things. No House GOP lawmaker voted for it; 18 Democrats voted "no" and 10 Republican were no-shows.
Currently, the details of a deal include somewhere between the HEROES bill and Secretary Mnuchin’s most recent offer, which includes a $1.62 trillion package: $250 billion for state and local aid (about $100 billion more than Republicans were willing to offer in the last round of negotiations) and $400 per week in unemployment retroactive to September 12 and lasting through January 1, 2021 (which is less than the $600 a week Democrats want, but $100 more than Senate Republicans have proposed). The two sides disagree on major issues, such as funding for state and local aid, business tax provisions, and the Child Income Tax Credit. As the days tick away, election day draws closer and the schism grows between the two parties, making a deal all but impossible.
On September 30, the Senate passed and President Trump signed, a short-term funding bill several hours before the deadline to prevent a government shutdown. The Senate voted 84 to 100 to keep the government funded at current levels through December 11, setting up another funding fight after the November elections and just before the holidays. The House passed this funding bill in mid-September. The House also passed FY2021 Appropriations bills in July, but the Senate has yet to release any of their spending bills. Movement on those bills is not expected until after the November election. Speaker Pelosi, Senate Appropriations Chairman Richard Shelby (R-AL) and Senate Appropriations Vice Chairman Patrick Leahy (D-VT), have discussed the importance of appropriators trying to meet the December 11 continuing resolution deadline.
About 331,000 new coronavirus cases were recorded last week — an eight-week high — underscoring the economy’s inability to fully return to its pre-pandemic strength without a vaccine. The proportion of Americans dying from coronavirus infections is the highest in the developed world, according to a study of global mortality rates. Covid-19’s sweep across the Midwest and West is largely responsible. The hardest-hit states, based on trailing one-week new cases per capita, are now North Dakota, South Dakota, Montana, Wisconsin and Utah, according to the most recent data from Johns Hopkins University and hospitalizations are on the rise in all five states.
Last week, the president criticized FDA Commissioner Stephen Hahn, after the agency pushed through new guidance that will raise the bar for a vaccine authorization and likely delay vaccines approval before election day. The FDA appeared to end a standoff with the White House over the enhanced standards, publishing them as part of a set of instructions to vaccine makers. The White House, which had held up the guidance for two weeks, approved it hours later for official release. That marked a victory for the FDA’s career scientists, who had pushed for releasing the stricter guidelines in hopes of reassuring the public that authorization of a Covid-19 shot would be guided by science, not politics.
This year, thousands of researchers in more than 30 countries have been collaborating and competing on more than 600 projects to develop a vaccine against the novel coronavirus. Authorities in China and Russia claim to be near the finish line, but researchers elsewhere are skeptical. Decisions by AstraZeneca Plc and Johnson & Johnson to pause testing on their promising candidates, both after one person got sick, highlighted the risks. Normally, the process of bringing a conventional vaccine from inception to the finish line takes on average nearly 11 years with just 6% of experimental vaccines crossing the finish line. For Covid-19, the shortcuts being used include:
As for manufacturing, Johnson & Johnson, Sanofi and Moderna are scaling up production facilities already and philanthropist Bill Gates, is committing funds to the worldwide manufacturing effort. As for distribution, a collaboration called COVAX – led by the Oslo-based Coalition for Epidemic Preparedness Innovations, the World Health Organization and Gavi, a global non-profit group focused on vaccine delivery – aims to raise $18 billion from high- and middle-income countries to invest in developing and manufacturing the five to ten most promising vaccine candidates and ensure access for those at greatest risk across the globe, not just because it is ethical but also vital to ending the crisis.
On October 2nd, LabCorp received an Emergency Use Authorization (EUA) from the U.S. Food and Drug Administration (FDA) for a new molecular COVID-19 testing method that uses heat and technology to extract RNA from COVID-19 samples. It is the first corporate laboratory to receive an EUA for this technology. The innovative heat extraction technology aims to improve the speed and efficiency of RT-PCR tests. The extraction process traps viral particles, thereby eliminating the need for RNA extraction reagents, and streamlines resources and reduces the time to complete and report results.
The Government Reform and Oversight Committee held a two-part hearing on unsustainable drug pricing. The first of a two-day hearing on September 30 at which executives from Celgene, Bristol Myers Squibb and Teva Pharmaceuticals testified; Bristol Myers Squibb recently bought Celgene, and former Celgene CEO Mark Alles testified. The investigation and hearing covered the drug pricing issues we have heard in the press numerous times as well as revelations from internal company emails about the role of price hikes in executive compensation and thwarting competing drug development, which runs counter to industry arguments that high prices fund new drug research. Internal Celgene emails show executives hiked prices of Revlimid primarily to meet company revenue and shareholder earnings goals. In 2014, then-CEO Mark Alles called for an emergency price increase for Revlimid to meet quarterly revenue targets. That email feeds into another point that House Democrats drove home: prices are far higher in the United States than in other countries and it’s easy to raise prices here when companies need the extra cash. Documents obtained by the committee also show executives would not have received bonuses had they not raised Revlimid’s price. More than half of the bonus formula was based on meeting yearly revenue and earnings targets, according to the report. For decades, the drug industry has said curbing drug prices will impede future inventions. However, when Celgene executives outlined a plan in 2016 to increase Revlimid’s price by 40% over six price hikes between 2017 and 2019, the executives cited clinical trials involving Revlimid to justify those price hikes, but more than half of those were funded by an entity other than Celgene. Rep. Carolyn Maloney (D-NY), the Chairwoman of the Committee on Oversight and Reform, and many of her colleagues remain determined to continue to publicly press pharmaceutical companies, but no legislation is expected until next year.
Rick Bright, the ousted BARDA chief stepped down from NIH on October 5, alleging that he'd been deliberately idled in his new role at NIH and complaining that Director Francis Collins' "timidity" had effectively blocked his new plan for a national Covid-19 testing strategy. This follows Bright’s abrupt transfer in April to NIH after HHS officials suspected he was the source of a critical media report about the administration's hydroxychloroquine strategy, which Bright later confirmed. Bright subsequently filed a whistle blower complaint alleging that he was being punished for raising concerns about hydroxychloroquine, the drug favored by President Trump to treat the coronavirus despite scant evidence. Bright then testified to a House panel in May and did several media appearances to speak out against the administration's handling of the pandemic. His criticism continues to bother the administration and alarm scientists and public health professionals.
Amidst this controversy, BARDA announced BARDA milestones: 55 FDA Approvals, Licensures, and Clearances since 2006; 15 diagnostic Emergency Use Authorizations for SARS-CoV-2 product candidates; over 3,800 market research submissions to the BARDA TechWatch/CoronaWatch program and 510 CoronaWatch meetings this year. These market research efforts enabled BARDA to invest over $15 Billion in COVID-19 funding, either directly or through our interagency partnerships. While COVID-19 may have had the spotlight, important work continued across traditional health security focus areas to prepare for pandemic influenza, CBRN threats, and innovation programs under DRIVe. These programs resulted in over 360 contracting actions and the investment of over $1.95 billion in funding. While BARDA has run out of funding, the Operation Warp Speed continues to advance vaccine and therapeutic work. Also, the annual BARDA Industry Day is coming up on October 27. The G2G team will be attending the virtual event.
With Covid-19 hospitalizations for minorities five times higher than white Americans, the NIH will pour more work into eliminating health disparities, according to Director Francis Collins. Calling Covid-19’s impact on minorities, especially African Americans, a big wake-up call, Collins committed to going deeper and being more thoughtful than ever before in terms of addressing these health inequities and health disparities. He said this has nothing to do with genomics and everything to do with access to health care and to resources. Covid-19-related hospitalizations for Black, Hispanic, and Native American populations are about five times higher than white Americans, according to Centers for Disease Control and Prevention data. Black Americans account for 13% of the population but more than 20% of Covid-related deaths in the U.S. and are dying at 2.3 times the rate of white Americans, according to the COVID Tracking Project. The agency’s 27 institute directors have met with Collins six times since June to discuss what the NIH should be doing on a deeper level and are working on building on progress made over the last several years to recruit and retain scientists from diverse backgrounds, the National Cancer Institute’s training and career development program to improve diversity in cancer research, and existing community engagement efforts to expand point-of-care testing in communities. Finally, the NIH recently announced $234 million in grants to make testing more accessible in underserved communities.
With more than one million Covid-19 patients costing $4 billion in hospital expenditures, the pandemic is making a significant impact on seniors. More than 178,000 Medicare enrollees have been hospitalized for Covid-19 and traditional Medicare spent $4.4 billion in 2020 to do so. As of today, more than one million Medicare beneficiaries have contracted the disease. With nursing homes and long-term care facilities taking the majority of the brunt of the virus since March, the administration has focused on distributing Covid-19 testing capabilities to these locations and included performance incentive dollars to drive reductions in cases and better response systems. This will continue to be a focus in addressing the pandemic.
On September 30, the FDA announced the launch of the Digital Health Center of Excellence within the Center for Devices and Radiological Health (CDRH). The center will be an important step in furthering the agency’s goal of advancing digital health technology, including mobile health devices, software as a medical device (SaMD), wearables used with medical devices, and technology used to study medical products. The goal is to ensure that the most cutting-edge digital health technologies are rapidly developed and reviewed in the U.S. to provide new options for facilitating prevention, early diagnosis of life-threatening diseases, and management of chronic conditions outside of traditional care settings, according to FDA Commissioner Stephen M. Hahn, MD. This is part of its effort to modernize policies and regulations, as well as providing efficient access to specialized expertise, knowledge, and tools in accelerated access to digital health technology.
Chairman Adam Smith (D-WA) aims to bring the final version of the National Defense Authorization Act (NDAA) to the House floor during the first week of December. Ranking Member Mac Thornberry (R-TX), who is retiring after 25 years, said the bill should be finalized soon after the elections. The House passed HR 2500 by 220-197 on July 12 and the Senate passed its version, S 4049, by 86-14 on July 23. Much of the public debate about this year’s NDAA has concentrated on the renaming of U.S. military installations named for Confederates, banning the flying of the confederate flag, revision of the Insurrection Act, and preventing the use of defense dollars to build President Trump’s border wall. Both chambers agree on the major parts of the bill, including starting the process of renaming installations and ships currently named after Confederate leaders, a stance that has prompted a veto threat from President Trump.
Of note, the operations and maintenance (O&M) funds are typically appropriated for one year at a time and any money left over at the end of the fiscal year is lost if not spent, thus causing the “spend it or lose it” frenzy in August-September each year. At almost $289 billion of $705 billion in total defense funding requested this year, the hurried expenditure of O&M dollars represents billions of dollars of inefficient spending over the years, concludes Rep. Thornberry. With the Chairman’s support, he has pushed to allow the Pentagon to spend 50 percent of unused O&M funds in the next fiscal year, which is allowed for many other federal agencies. However, this is battle of authorizers versus appropriators as it shifts control. Also of note, the Senate NDAA tries to get a better accounting of spending by setting up a process for the four defense committees to review proposed changes to the justification books by the Pentagon and address “pass through” spending that artificially inflates the Air Force’s topline and hurts its bottom line.
Both chambers eliminate the Pentagon’s Chief Management Officer (CMO) position by September 30, 2022 in their bills. After President Trump announced his intent to remove 9,500 American troops from Germany and cap the total number of military personnel in the country at 25,000, Congress has moved to stop this. Concerned the White House shipbuilding request falls short again and we do not have enough tactical aircraft for the Pentagon’s war plans, both chambers support the building of more ships and more aircraft fighters. The House and Senate bills currently are $2 billion apart on how much to spend on the F-35 and whether to procure a second Virginia-class attack submarine. The Senate added $1.36 billion to buy 14 more Joint Strike Fighters. The House, on the other hand, wants to purchase the same number of F-35s as the Pentagon requested, and would cut funding for F-35 support infrastructure by $561 million. The difference is now left to be resolved in conference or by appropriators.
Most of the Joint Chiefs are in quarantine after the Coast Guard’s No. 2 tests positive for the coronavirus. The top military leaders may have been exposed in a meeting with Adm. Charles Ray, the vice commandant of the Coast Guard, who tested positive for Covid-19 on October 5. In total seven members of the Joint Chiefs, including the chair, Gen. Mark Milley, are in self-quarantine and being retested, as well as U.S. Cyber Command chief Gen. Paul Nakasone and Gen. Gary Thomas, the assistant Marine Corps commandant. Marine Commandant Gen. David Berger, Defense Secretary Mark Esper and Navy Secretary Kenneth Braithwaite were traveling and did not attend the Pentagon meetings with Ray. Meanwhile, 34 people who have tested positive in the Trump Covid-19 outbreak continue to quarantine.
The House Armed Services chair has defended the Pentagon’s use of coronavirus relief funds to bolster the defense industry and says no probe is necessary. On October 9, the Select Subcommittee on the Coronavirus Crisis, the House Financial Services Committee and the House Oversight and Reform Committee launched an investigation Friday into whether the Pentagon inappropriately routed hundreds of millions of dollars to the defense industry instead of purchasing medical supplies and personal protective equipment. The probe was sparked by a report last month in The Washington Post, which Smith said “isn’t actually accurate.”
The DoD awarded a $20 million contract to On Demand Pharmaceuticals for domestic manufacturing of prescription drugs and ingredients as part of the government’s effort to avert drug shortages and price gouging during the pandemic. The Defense Department’s Defense Advanced Research Projects Agency (DARPA) already funded the development of the company’s drug-making technology, and the company now is getting money set aside by the Coronavirus Aid, Relief, and Economic Security (CARES) Act for pandemic response projects. The press release says the award was done in collaboration with the HHS Assistant Secretary for Preparedness and Response, but the Defense Department awarded the money and DARPA oversees the project. The Defense Department long ago took an interest in funding technologies that allow for rapid responses to biological threats, and that biodefense initiative has merged with the pandemic response. A prime example is the Moderna coronavirus vaccine. The mRNA technology that Moderna is using for that vaccine was developed with Defense funding years ago. Also, the Defense Department handled most of the coronavirus vaccine contracts, even though the money came from HHS’ Biomedical Advanced Research and Development Authority, which received $3.5 billion from the CARES Act for developing, making and purchasing coronavirus vaccines, drugs and diagnostics.
On September 30, the House Armed Services Committee released “The Future of Defense Tasks Force Report” which urges the Trump Administration to expand visas for STEM students to incentivize them to stay and work in the United States. The report showed that international students return to their countries after their studies with critical knowledge and capacity. The report found that many would stay in the U.S. if allowed. In 2017, international students accounted for 54% of master’s degrees and 44% of doctorate degrees in the STEM fields in the United States. DoD is concerned about building the pipeline of STEM professionals for the military and regularly funds programs to address this issue.
Virgin Hyperloop One just announced it will build a certification center in West Virginia for the high-speed transportation system that uses enclosed pods to move passengers and cargo at over 600 mph (960 km/h). The company had received bids from more than a dozen states in the past year to build a 6-mile (9.7-kilometer) testing track and other safety facilities over hundreds of acres for the electromagnetic levitation transportation technology. Meanwhile, the Hyperloop Transportation Technology (HyperloopTT) completed its feasibility study with NOACA last year, demonstrating significant economic impact of building a hyperloop route from Pittsburgh to Cleveland to Chicago with potential stops in Youngstown and Toledo along the way.
On August 12, the House passed a spending bill for FY2021 that proposes raising the budget of the National Science Foundation (NSF) to $8.5 billion (a 3% increase) to expand education and research programs. The House Appropriations Committee released a report detailing recommendations on how the funds should be allocated, including addressing gaps in representation and concentrations. The report dictates that funds should at least remain at FY2020 funding levels for the Social Behavioral and Economic Sciences, “10 Big Ideas” framework and Astronomy and Artificial Intelligence disciplines. It also directs an increase in funding for the Established Program to Stimulate Competitive Research program, which helps states that historically receive a small share in federal funding.
The same House bill also recommends increasing the budget by 3% for efforts that support underrepresented groups in science, technology, engineering, and math (STEM) fields. The report calls on NSF to increase the budgets of Historically Black Colleges and Universities Undergraduate Program, the Louis Stoke Alliances for Minority Participaction, Tribal Colleges and the Hispanic Serving Institutions program. These programs support the advancement and representation of minorities in STEM fields. It also included concern over the severe underrepresentation of Hispanic Ph.D. graduates in STEM fields and lack of programs for Asian American and Native American Pacific Islander-Serving institutions. The report urges NSF to increase grants to address these concerns. Despite these increases, they still fall short of the targets proposed in the bipartisan RISE Act, which recommends Congress distribute about $25 billion in research recovery funds across science agencies.
On September 30th, U.S. Secretary of Education Betsy DeVos announced that the Department of Education will provide nearly $100 million in grant awards to school districts, higher education institutions and nonprofits. Of the $100 million, $23.8 million was dedicated to 12 awards under the Supporting Effective Educator Development (SEED) Program, specifically for projects that prepare educators to teach science, technology, engineering, and mathematics (STEM), with an emphasis on computer science.
This summer, the House passed a bill that would provide mostly level funding for the Office of Science and its main component programs. The most notable proposed change is a 4% increase for the Advanced Scientific Computing Research program. Congress already provided $100 million to the office in March to support pandemic-related research. House Democrats have also included $6.25 billion in advance funding for 67 projects as part of a set of “emergency” economic stimulus measures they appended to the House’s DOE spending bill over Republican objections. Some of these projects are also experiencing pandemic-related cost increases. Further complicating matters, the House’s non-emergency proposals for some projects involve unexpected cuts, suggesting the Democrats may have shifted funding intended for them into the emergency package.
U.S. scientists are concerned that recent Trump administration policies will cause emigration of U.S. scientists and researchers, leading to a loss in innovation. Tensions between the U.S. and China are high as some in Congress have accused Chinese researchers and students of using U.S. intelligence and intellectual property at the behest of the Chinese government. There are on-going investigations into U.S. researchers with ties to China at NIH and NSF for violating grant rules on research integrity. NIH investigated 189 researchers for impropriety in June, and 93% had ties to China and 82% were of Asian descent. Within the past two months, four Chinese researchers were arrested on charges of visa fraud. The investigations are causing fear and uncertainty in the scientific community and causing accusations of racial profiling, which the administration has denied.
The Covid-19 pandemic will exact a $16 trillion toll on the U.S. – four times the cost of the Great Recession – when adding the costs of lost lives and health to the direct economic impact, according to former U.S. Treasury Secretary Lawrence Summers and fellow Harvard University economist David Cutler who joined forces to publish their report in an essay in the Journal of the American Medical Association. While the spring lock down resulted in more than 22 million jobs vanishing, by September, the economy showed some progress by adding 661,000 jobs and dropping the unemployment rate from 8.4% to 7.9%. But 859,000 new jobs were expected and the unemployment rate is the highest ever ahead of a presidential election since monthly tracking began in 1948. Despite this, the president’s economic adviser, Larry Kudlow claims the economic recovery is not dependent on a stimulus package, which contradicts Fed Chair Jay Powell, who warned on October 6 that the economy might falter if another stimulus package doesn't make it through Congress.
The U.S. Economic Development Administration (EDA) has long facilitated effective delivery of federal economic development assistance to support long-term economic recovery planning in communities that have faced economic distress or harm as a result of natural disasters. As of July 31, 2020, EDA has invested $524,556,123 in projects across the U.S. to help communities recover from natural disasters in 2017, the majority of which was allocated to areas with the most impact. The EDA continues to offer grant funding for economic development with CARES Act funding.