budget & appropriations

The latest news and legislative activity affecting budget and appropriations

May 26, 2020
legislative updates

A quick review of the legislative response to the Coronavirus includes:

March
• $8.3B Emergency Supplemental Funding legislation is enacted
• National Emergency Declared by President Trump
• $3T Families First Coronavirus Response Act (FFCRA) is enacted
• $2.3T Coronavirus Aid, Relief and Economic Security Act (CARES Act) is enacted, including $310 billion additional PPP funds
• SBA’s EIDL Program is opened for submissions

April
• Paycheck Protection Program is launched and exhausted within two weeks
• SBA EIDL submission process is updated and clarified
• Payroll Tax Credit is started
• Paycheck Protection Program and Health Care Enhancement Act, also called CARES 3.5, is enacted that replenishes PPP, EIDL and SBA Loan Programs

May-July
• $3T HEROES Act is passed in the House only, Senate is drafting a different bill
• NDAA and Appropriations bills are being drafted
• Expiring programs such as the transportation bill called the FAST Act, NIH Reauthorization Act, Workforce Innovation and Opportunity Act, Childcare Development Block Grant program, Early and Secondary Education Act and others are being drafted

FY21 Appropriations Bills
The COVID-19 pandemic has dramatically delayed the annual appropriations process of hearings and markups. Currently both chambers are working through subcommittees on their marks but it is still uncertain when either chambers’ full committees will take up these bills.  The House Appropriations Committee has indicated that they will not start moving their bills until the Senate acts on the next COVID-19 relief package, the 5th one since March.

Related to moving this legislation is the House’s unprecedented rule change established on May 22 that will allow members to designate a proxy to enable members with health concerns to still be able to vote without having to travel back to Washington. The new rule also allows committees to conduct remote and virtual hearings once they run several trial runs. This means the appropriations bills can be moved through subcommittee in the coming weeks.

Finally, many state budgets start July 1 and are cutting spending significantly due to COVID-19 causing severe revenue shortfalls and increased response spending. As a result, Congress is considering ways to include sending funding to state and local governments. The total state and local government budget shortfalls total $765 billion over a three-year period, according to the Center on Budget and Policy Priorities. Therefore, Senator Bob Menendez (D-NJ) and Senator Bill Cassidy (R-LA) introduced the SMART Act, which would provide $500 billion in state, local and tribal funding this fiscal year.

5th Coronavirus Legislative Package
On May 15, the House passed by 208-199, a $3 trillion COVID-19 relief package called the HEROES Act, which will not be voted on in the Senate as Senate Majority Leader McConnell stated his chamber will draft a less expensive bill and bring it to the floor in late June. The HEROES Act includes the following provisions:
• Provides $500 billion in direct funding to state governments and $375 billion in direct funding to cities and local governments to assist with the fiscal impacts from the public health emergency caused by the coronavirus. 
• Provides as much as $1,200 per individual and as many as three dependents under same income limits and phase-out as the CARES Act.
• Extends the Pandemic Extended Unemployment Compensation (PEUC) and the supplement to state and federal unemployment benefits through January 31, 2021.
• Extends refundable tax credits for paid sick and family leave through the end of 2021 and increases the limits on those paid leave credits.
• Expands the plan’s reach to include priorities such as eliminating the tax code’s cap on state and local deductions for individuals, as well as expanded employee-retention tax credits.
• Increases Federal Medical Assistance Percentage (FMAP) payments to state Medicaid programs by a total of 14 percentage points
• Allows for $90 billion for an Education Department State Fiscal Stabilization Fund to support elementary and secondary schools, as well as public colleges and universities. The Education Department would cancel or repay as much as $10,000 on economically distressed borrowers’ student loans. It allows institutions receiving funds under the  Perkins Career and Technical Education Act to retain funds that weren’t spent due to the outbreak.
• Provides another $2.1 billion for worker training programs as well as providing $180 billion for grants to local, tribal, nonprofit, and private sector employers to provide “pandemic premium pay” to essential workers.
• Increases monthly benefits for the Supplemental Nutrition Assistance Program by 15% from June through September.
• Extends the authorization period for the Paycheck Protection Program from June 30 to December 31 and requires the Small Business Administration to set aside at least 25% of its Paycheck Protection Program funds to guarantee loans issued to eligible recipients with 10 or fewer employees and 25% of its funds to guarantee loans issued to nonprofits, at least half of which set aside for nonprofits with less than 500 employees. It also expands PPP’s eligibility rules to cover media outlets with physical locations that fall within SBA size limits and nonprofit organizations of any type or size, including 501(c)(4) social welfare organizations and 501(c)(6) trade associations. PPP loans could be used and forgiven to purchase PPE for employees and stipulates that CARES Act payments made by the SBA related to loans under the 7(a), 504, microloan, and emergency EIDL programs wouldn’t be designated as taxable income.
• Provides $75 billion for a COVID-19 National Testing and Contact Tracing initiative and addresses the healthcare supply chain issues by allowing the FDA to destroy imported counterfeit devices, authorizing $100 million for the National Centers of Excellence in Continuous Pharmaceutical Manufacturing and directing the Biomedical Advanced Research and Development Authority (BARDA) to award contracts to enhance the manufacturing capacity of a COVID-19 vaccine.
• $1 billion for HRSA grants to establish or expand medical schools in underserved areas or that are minority-serving institutions.
• $175 million over two years for the Health and Human Services Department to establish a Public Health Workforce Loan Repayment Program.
• Provides $500 million through fiscal 2023 to increase the medical supply chain and maintain domestic reserves of critical medical supplies and shore up the Strategic National Stockpile.

Small Business Provisions
The HEROES Act restricts collections of debts of nonprofit organizations and smalls businesses until 120 days after the end of the coronavirus national emergency declaration. Even then, creditors couldn’t add additional interest or fees on the unpaid debt at the end of the emergency. It also requires the Main Street Lending program to include non-profit organizations as eligible borrowers and be required to offer a low-cost loan option that may be forgiven for non-profits serving low-income communities. It makes some changes for the self-employed tax credit by providing a 90% refundable credit for individuals whose gross self-employment income in 2020 was less than 90% of the amount they received in 2019. The credit would be based on the individual’s income loss, over 10%, from 2019 to 2020, capped at $45,000.

March 25, 2020
legislative updates

FY21 appropriations process was off to a fast start in 2020 with each office crafting their own request form and system for accepting requests. The House Appropriations Committee set tight timelines for moving bills so G2G worked methodically to collect, complete and submit ~350 forms while making sure we met with staff and Members of Congress. As we’ve shifted to working from home, we’ve continued our meetings in the form of calls and continued to email in these submissions. Most of the submission deadlines were last week and this week in the House and in early to mid-April in the Senate. Hearings are being delayed, but consideration and planning for bill markups continues. One challenge for this year is the limited funding due to caps enacted last year, however, this is likely to change due to the coronavirus and need for an economic stimulus response.

For background, last August Congress passed and the president signed a new budget caps agreement that provided for a slight increase in FY20 and FY21. The new caps provided for $1.37 trillion in FY20 for defense and non-defense (or civilian) agencies. On December 20, the president signed the FY20 appropriations package that followed those caps. According to the agreement, the FY21 caps are nearly identical to last years, adding just $2 billion for defense and $3 billion for civilian agencies. The president’s FY21 budget proposal supports those caps only for defense, not civilian agencies. As the two chambers and White House, primarily under the leadership of Speaker Nancy Pelosi (D-CA) and Treasury Secretary Steve Mnuchin, negotiate spending deals, G2G is maintaining regular communications and advocating for our requests throughout this process.

Coronavirus Response
First, note we will cover details on the webinars tomorrow at 12pm and 3pm and are planning another webinar for March 27th.

Second, see these resources:

BIO:

The Coronavirus is No Match for Science

BARDA:

Request A USG Coronawatch Meeting

Special Instructions 001 Issuance for Easy Broad Agency Announcement

DoD:

Special Operations due March 31

MTEC: Prototype Development to Combat Novel Coronavirus Disease COVID-19

NPI Submissions get response within 10 days if can do diagnostics: https://mrdc-npi.amedd.army.mil

OSTP:

Coronavirus Research

SBA:

Disaster Assistance

Congress and the White House:
Trump declared a national emergency on March 13th which was accompanied by several initiatives, including waiving student-loan interest, purchasing large quantities of oil, setting up drive-through testing, and authorizing the Health and Human Services Department to waive certain hospital regulations. Congress and the administration have worked closely to craft and enact two packages thus far and are steeped in Phase III coronavirus response legislation that could total over $1 trillion for industries and individuals. The new proposal is expected to include the steps taken by the executive branch, including delay of tax deadlines, relief for student loan interest payments, a payroll tax cut, and billions for small business loans. Senator Mitt Romney (R-UT) suggested a proposal that would provide every American $1,000 and Democrats in the Senate are also putting together their own proposal.

On March 6th, the first coronavirus response measure, the Emergency Supplemental Appropriations bill, was signed into law to provide $8.3 billion for immediate response efforts to the Department of Health and Human Services, the State Department, U.S. Agency for International Development, and Small Business Administration. On March 14th, the House passed the second bill called the Families First Coronavirus Response Act for which they made technical corrections on March 16th and sent to the Senate. On March 18th, the Senate passed and President Trump signed legislation giving tax credits to employers to offset the costs of providing emergency paid leave, funding for food assistance such as SNAP and WIC and expanded unemployment insurance, and increased Medicaid funding to states. It also requires insurers, Medicare, Medicaid, and other federal health programs to fully cover testing and related services for the virus. The funds provided are designated as emergency requirements and won’t count against the discretionary spending cap for FY2020. Details are below for the Phase II coronavirus response legislation.

HHS Funding & Healthcare Provisions
Test Coverage: Insurers are required to cover coronavirus tests and related services, such as provider visits for testing, without cost-sharing or prior authorization requirements. The cost-sharing prohibition would also apply to Medicaid, Medicare, TRICARE, veterans’ health programs, the Indian Health Service, and coverage provided to federal civilian employees. The bill provides $1 billion to allow the National Disaster Medical System to reimburse provider costs associated with testing uninsured individuals.

Nutrition: $250 million for HHS programs that aid elderly Americans, divided as follows:
• $160 million for home-delivered nutrition services.
• $80 million for congregate nutrition services that provide food in group settings, such as adult day care centers and meal sites.
• $10 million for nutrition services for American Indians.

Nutrition Assistance:
• $500 million in emergency funding for the WIC program.
• $400 million for the Commodity Assistance Program for the emergency food assistance program (TEFAP), $100 million of which could be used for costs related to the distribution of goods.

SNAP: If a school is closed for at least five consecutive days because of a coronavirus-related public health emergency, states could adjust to provide additional aid to households with children eligible for free or reduced-price school meals. It also waives federal work requirements for SNAP eligibility. The waiver begins in the first full month after the bill is enacted and terminate at the end of the first full month after a federal coronavirus-related emergency declaration is lifted. State-imposed work requirements won’t be changed, but a person’s participation in SNAP during the emergency won’t be counted for determining compliance with work requirements.

Emergency Family Leave:
It creates an emergency paid leave program to directly respond to the coronavirus with employers with fewer than 25 employees exempted. Private sector employers with fewer than 500 workers and government entities would have to provide as many as 12 weeks of job-protected leave under the Family Medical Leave Act for employees who are unable to work or telework because they have to care for a child younger than 18 whose school or day care has closed because of the coronavirus. The first 10 days of leave could be unpaid, though a worker could choose to use accrued vacation days, personal leave, or other available paid leave for unpaid time off. Following the 10-day period, workers can receive a benefit from their employers that will be at least two-thirds of their normal pay rate. Leave assistance to workers is capped at $200 per day or $10,000 total. The FMLA provisions run through Dec. 31, 2020.

Emergency Sick Leave:
Private sector employers with fewer than 500 workers and government entities have to provide employees who are unable to work or telework with immediate paid sick time off to:
• Comply with a federal, state, or local quarantine or isolation order.
• Self-quarantine per a health-care provider’s advice.
• Obtain a medical diagnosis for coronavirus.
• Care for an individual who is in quarantine or for a child whose school or day care has closed due to coronavirus.

Full-time employees receive 80 hours of sick leave and part-time workers are granted time off that’s equivalent to their scheduled or normal work hours in a two-week period. Paid sick time won’t carry over from year to year. Workers would have to be paid at least their normal wage or the federal, state, or local minimum wage, whichever is greater. Leave assistance would be capped at $5,110 for a worker’s quarantine or diagnosis and at $2,000 to provide care for another individual or child. An employer can’t require a worker to use any other available paid leave before using the sick time.

Employers are prohibited from:


• Requiring a worker to find a replacement to cover their hours during time off.
• Discharging or discriminating against workers for requesting paid sick leave or filing a complaint against the employer.


Workers under a multiemployer collective bargaining agreement and whose employers pay into a pension plan would have access to paid emergency leave.

Employer Tax Credits:
The legislation provides refundable tax credits to employers to cover wages paid to employees while they are taking time off.  These credits are against employers’ payroll tax payments.

Self-Employed Tax Credit:
It provides a similar refundable credit against self-employment tax. Self-employed individuals can receive a family leave credit for as many as 50 days for the lesser of $200 or 67% of their average daily self-employment income. Self-employed individuals have to submit documentation, as required by the Treasury Department. The measure establishes alternate requirements for self-employed individuals who also receive sick-leave pay from an employer.

Unemployment Insurance:
Extended Benefits: Eligible laid-off workers can receive regular unemployment benefits for as long as 26 weeks in most states. After exhausting those benefits, individuals in states with rising unemployment can qualify for an additional 13 weeks of benefits — or 20 weeks in some states — through the Extended Benefits (EB) program. The law waives a state matching requirement and provide full federal funding for the EB program for the rest of 2020. To qualify, states need to experience a 10% spike in unemployment claims over the past year and qualify for a full emergency funding transfer.


It also provides:
• $82 million to the Defense Department for Covid-19-related items and services through the Defense Health Program.
• $60 million for the Veterans Affairs Department.
• $15 million to the Internal Revenue Service to carry out the bill’s provisions.

Testing:
State health departments now have the power to put COVID-19 tests on the market without waiting for FDA approval under a shift in policy announced by the federal agency. The policy change gives states enormous responsibility for regulating new diagnostics that come online, a landmark move for the FDA. Agency leaders acknowledged this means the FDA is taking a risk by relying on state public health departments but they said the move was necessary to balance the needs of a pandemic with the risks the tests may be faulty. Labs don’t have to send the CDC samples of their coronavirus test results anymore to get confirmation of positive cases, thanks to this new FDA policy change.

Vaccine:
A Phase 1 clinical trial evaluating an investigational vaccine (called mRNA-1273) designed to protect against coronavirus disease 2019 (COVID-19) has begun at Kaiser Permanente Washington Health Research Institute (KPWHRI) in Seattle, thanks to expeditious funding from NIAID. The open-label trial is enrolling 45 healthy adult volunteers ages 18 to 55 years over approximately 6 weeks. The first participant has already received the investigational vaccine.

OSTP Data-Sharing:
The White House Office of Science and Technology Policy unveiled a new database hosting thousands of scientific articles about the coronavirus in hopes to help public health experts fight the outbreak. The new database, which already has 29,000 scholarly articles, is the latest effort by tech firms and the Office of Science and Technology Policy to come up with a response. Can access here: https://pages.semanticscholar.org/coronavirus-research

March 19, 2020
legislative updates

FY21 appropriations process was off to a fast start in 2020 with each office crafting their own request form and system for accepting requests. The House Appropriations Committee set tight timelines for moving bills so G2G worked methodically to collect, complete and submit ~300 forms while making sure we met with staff and Members of Congress. As we’ve shifted to working from home, we’ve continued our meetings in the form of calls and continued to email in these submissions. Most of the submission deadlines were last week and this week in the House and in early to mid-April in the Senate. Hearings are being delayed, but consideration and planning for bill markups continues. One challenge for this year is the limited funding due to caps enacted last year, however, this is likely to change due to the coronavirus and need for an economic stimulus response.

For background, last August Congress passed and the president signed a new budget caps agreement that provided for a slight increase in FY20 and FY21. The new caps provided for $1.37 trillion in FY20 for defense and non-defense (or civilian) agencies. On December 20, the president signed the FY20 appropriations package that followed those caps. According to the agreement, the FY21 caps are nearly identical to last years, adding just $2 billion for defense and $3 billion for civilian agencies. The president’s FY21 budget proposal supports those caps only for defense, not civilian agencies. As the two chambers and White House, primarily under the leadership of Speaker Nancy Pelosi (D-CA) and Treasury Secretary Steve Mnuchin, negotiate spending deals, G2G is maintaining regular communications and advocating for our requests throughout this process.

Coronavirus Response

First, note we will cover details on the webinars tomorrow at 12pm and 3pm and are planning another webinar for March 27th.

Second, see these resources:

BIO:

The Coronavirus is No Match for Science

BARDA:

Request A USG Coronawatch Meeting

Special Instructions 001 Issuance for Easy Broad Agency Announcement

DoD:

Special Operations due March 31

MTEC: Prototype Development to Combat Novel Coronavirus Disease COVID-19

NPI Submissions get response within 10 days if can do diagnostics: https://mrdc-npi.amedd.army.mil

OSTP:

Coronavirus Research

SBA:

Disaster Assistance

Congress and the White House:

Trump declared a national emergency on March 13th which was accompanied by several initiatives, including waiving student-loan interest, purchasing large quantities of oil, setting up drive-through testing, and authorizing the Health and Human Services Department to waive certain hospital regulations. Congress and the administration have worked closely to craft and enact two packages thus far and are steeped in Phase III coronavirus response legislation that could total over $1 trillion for industries and individuals. The new proposal is expected to include the steps taken by the executive branch, including delay of tax deadlines, relief for student loan interest payments, a payroll tax cut, and billions for small business loans. Senator Mitt Romney (R-UT) suggested a proposal that would provide every American $1,000 and Democrats in the Senate are also putting together their own proposal.

On March 6th, the first coronavirus response measure, the Emergency Supplemental Appropriations bill, was signed into law to provide $8.3 billion for immediate response efforts to the Department of Health and Human Services, the State Department, U.S. Agency for International Development, and Small Business Administration. On March 14th, the House passed the second bill called the Families First Coronavirus Response Act for which they made technical corrections on March 16th and sent to the Senate. On March 18th, the Senate passed and President Trump signed legislation giving tax credits to employers to offset the costs of providing emergency paid leave, funding for food assistance such as SNAP and WIC and expanded unemployment insurance, and increased Medicaid funding to states. It also requires insurers, Medicare, Medicaid, and other federal health programs to fully cover testing and related services for the virus. The funds provided are designated as emergency requirements and won’t count against the discretionary spending cap for FY2020. Details are below for the Phase II coronavirus response legislation.

HHS Funding & Healthcare Provisions

Test Coverage: Insurers are required to cover coronavirus tests and related services, such as provider visits for testing, without cost-sharing or prior authorization requirements. The cost-sharing prohibition would also apply to Medicaid, Medicare, TRICARE, veterans’ health programs, the Indian Health Service, and coverage provided to federal civilian employees. The bill provides $1 billion to allow the National Disaster Medical System to reimburse provider costs associated with testing uninsured individuals.

Nutrition: $250 million for HHS programs that aid elderly Americans, divided as follows:

  • $160 million for home-delivered nutrition services.
  • $80 million for congregate nutrition services that provide food in group settings, such as adult day care centers and meal sites.
  • $10 million for nutrition services for American Indians.

Nutrition Assistance

  • $500 million in emergency funding for the WIC program.
  • $400 million for the Commodity Assistance Program for the emergency food assistance program (TEFAP), $100 million of which could be used for costs related to the distribution of goods.

Emergency Family Leave:

It creates an emergency paid leave program to directly respond to the coronavirus with employers with fewer than 25 employees exempted. Private sector employers with fewer than 500 workers and government entities would have to provide as many as 12 weeks of job-protected leave under the Family Medical Leave Act for employees who are unable to work or telework because they have to care for a child younger than 18 whose school or day care has closed because of the coronavirus. The first 10 days of leave could be unpaid, though a worker could choose to use accrued vacation days, personal leave, or other available paid leave for unpaid time off. Following the 10-day period, workers can receive a benefit from their employers that will be at least two-thirds of their normal pay rate. Leave assistance to workers is capped at $200 per day or $10,000 total. The FMLA provisions run through Dec. 31, 2020.

Emergency Sick Leave:

Private sector employers with fewer than 500 workers and government entities have to provide employees who are unable to work or telework with immediate paid sick time off to:

  • Comply with a federal, state, or local quarantine or isolation order.
  • Self-quarantine per a health-care provider’s advice.
  • Obtain a medical diagnosis for coronavirus.
  • Care for an individual who is in quarantine or for a child whose school or day care has closed due to coronavirus.

Full-time employees receive 80 hours of sick leave and part-time workers are granted time off that’s equivalent to their scheduled or normal work hours in a two-week period. Paid sick time won’t carry over from year to year. Workers would have to be paid at least their normal wage or the federal, state, or local minimum wage, whichever is greater. Leave assistance would be capped at $5,110 for a worker’s quarantine or diagnosis and at $2,000 to provide care for another individual or child. An employer can’t require a worker to use any other available paid leave before using the sick time. Employers are prohibited from:

  • Requiring a worker to find a replacement to cover their hours during time off.
  • Discharging or discriminating against workers for requesting paid sick leave or filing a complaint against the employer.

Workers under a multiemployer collective bargaining agreement and whose employers pay into a pension plan would have access to paid emergency leave.

Employer Tax Credits:

The legislation provides refundable tax credits to employers to cover wages paid to employees while they are taking time off.  These credits are against employers’ payroll tax payments.

Self-Employed Tax Credit:

It provides a similar refundable credit against self-employment tax. Self-employed individuals can receive a family leave credit for as many as 50 days for the lesser of $200 or 67% of their average daily self-employment income. Self-employed individuals have to submit documentation, as required by the Treasury Department. The measure establishes alternate requirements for self-employed individuals who also receive sick-leave pay from an employer.

Unemployment Insurance:

Extended Benefits: Eligible laid-off workers can receive regular unemployment benefits for as long as 26 weeks in most states. After exhausting those benefits, individuals in states with rising unemployment can qualify for an additional 13 weeks of benefits — or 20 weeks in some states — through the Extended Benefits (EB) program. The law waives a state matching requirement and provide full federal funding for the EB program for the rest of 2020. To qualify, states need to experience a 10% spike in unemployment claims over the past year and qualify for a full emergency funding transfer.

It also provides:

  • $82 million to the Defense Department for Covid-19-related items and services through the Defense Health Program.
  • $60 million for the Veterans Affairs Department.
  • $15 million to the Internal Revenue Service to carry out the bill’s provisions.

Testing:

State health departments now have the power to put COVID-19 tests on the market without waiting for FDA approval under a shift in policy announced by the federal agency. The policy change gives states enormous responsibility for regulating new diagnostics that come online, a landmark move for the FDA. Agency leaders acknowledged this means the FDA is taking a risk by relying on state public health departments but they said the move was necessary to balance the needs of a pandemic with the risks the tests may be faulty. Labs don’t have to send the CDC samples of their coronavirus test results anymore to get confirmation of positive cases, thanks to this new FDA policy change.

Vaccine:

A Phase 1 clinical trial evaluating an investigational vaccine (called mRNA-1273) designed to protect against coronavirus disease 2019 (COVID-19) has begun at Kaiser Permanente Washington Health Research Institute (KPWHRI) in Seattle, thanks to expeditious funding from NIAID. The open-label trial is enrolling 45 healthy adult volunteers ages 18 to 55 years over approximately 6 weeks. The first participant has already received the investigational vaccine.

OSTP Data-Sharing:

The White House Office of Science and Technology Policy unveiled a new database hosting thousands of scientific articles about the coronavirus in hopes to help public health experts fight the outbreak. The new database, which already has 29,000 scholarly articles, is the latest effort by tech firms and the Office of Science and Technology Policy to come up with a response. Can access here: https://pages.semanticscholar.org/coronavirus-research