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Focus on Regulation

Coronavirus: The Hill and the Headlines – COVID-19 D.C. Update – June 25, 2020

Your guide to the latest Hill developments, news narratives, and media headlines provided by the Hogan Lovells Government Relations and Public Affairs team.

In Washington:

  • The Treasury Department, working with the Internal Revenue Service (IRS), mistakenly delivered more than a million stimulus payments worth about $1.4 billion to deceased people, according to a report released Thursday by the Government Accountability Office (GAO).  The report said “The agencies faced difficulties delivering payments to some individuals and faced additional risks related to making improper payments to ineligible individuals, such as decedents, and fraud.”  The Treasury and the IRS did not use the death records maintained by the Social Security Administration to prevent improper payments for the first three batches of payments sent out.  GAO called on the IRS to develop options for getting the payments returned.
  • U.S. health and agricultural officials issued criticism of new demands from China for food-exporting companies to sign documents stating that they comply with safety standards to prevent transmission of COVID-19. On Wednesday, U.S. Agriculture Secretary Sonny Perdue and FDA Commissioner Stephen Hahn issued a joint statement that said “Efforts by some countries to restrict global food exports related to Covid-19 transmission are not consistent with the known science of transmission.”  Experts say that food poses little risk of spreading the coronavirus.  The move is the latest rebuff to China, which has issued warning shots to global exporters dealing with outbreaks among employees.
  • Dozens of Secret Service officers and agents who were on site for President Trump’s rally in Tulsa last week were ordered to self-quarantine after two of their colleagues tested positive coronavirus, part of the fallout from Trump’s insistence on holding the mass gathering over the objections of public health officials.  It is still unknown how the rally may have impacted Tulsa’s count of coronavirus cases, which are rising swiftly.
  • President Trump is planning a massive fireworks display at Mount Rushmore on July 3, despite a decade-long ban on pyrotechnics at the iconic spot because of concerns about public health, environmental, and safety risks.  Neither federal nor state officials have imposed social distancing requirements as part of the gathering.
  • The Centers for Disease Control (CDC) says Nearly 25 million Americans may have contracted the coronavirus, a figure ten times higher than the number of confirmed cases.  During a briefing on Thursday, CDC Director Robert Redfield said surveys of blood samples taken from around the country suggest that millions of Americans may have contracted the virus either without knowing it or with only minimal symptoms. He says that for every one confirmed case, the CDC estimates that ten more people have been infected.
  • The Paycheck Protection Program had more than $100 billion in funding left as of last Saturday, with only days remaining until the SBA stops taking new applications on June 30.  Now, there’s a debate in Congress about what to do with the leftover PPP money, and how to reach those businesses as the economy reopens in the midst of new virus outbreaks across the country.  Senator Ben Cardin (D-MD) said, “there’s strong bipartisan interest in protecting the funds that have been appropriated to develop a second round, but to have it targeted more to those small businesses that really need the help.” 
  • Lawmakers are considering letting companies avoid taxes on canceled debts as they restructure as the pandemic has thrown oil and gas, retail, restaurant, and other sectors into a tailspin. The forgiven portions of the $660 billion in small-business loans provided by the third coronavirus response bill won’t be subject to tax, but many companies that restructure after the crisis are likely to face taxes on what’s known as cancellation of debt income tax. 
  • Sens. Richard Blumenthal (D-CT) and Cory Booker (D-NJ) in a letter yesterday called on the National Collegiate Athletic Association to prohibit schools from “coercing” students to sign liability waivers that would exempt institutions from accountability for the spread of the coronavirus.  A growing number of schools are requiring college athletes to sign the waivers, the lawmakers said in a letter.

In the News:

  • Last week, 1.48 million Americans filed jobless claims for the first time, the Labor Department reported Thursday.  While the weekly numbers remained high and were worse than Wall Street estimates for the second straight week, the total of those receiving benefits fell by 767,000 to 19.52 million.
  • The three most populous U.S. states set records for new coronavirus cases daily and there are fears of “apocalyptic” surges in major Texas cities if the trend continues.  Florida and Texas announced Wednesday that they’d recorded more than 5,000 new cases the prior day, a new daily record. California reported more than 7,000 cases. In Texas, if the current case trajectory continues, Houston could be the hardest-hit city in the US with numbers rivaling those in Brazil. 
  • Texas Gov. Greg Abbott (R) has ordered all licensed hospitals in counties that include major cities such as San Antonio, Dallas, Houston, and Austin to postpone elective procedures in order to protect hospital capacity for coronavirus patients.
  • China appears set to eclipse the U.S. to become the world’s biggest economy within the decade as it powers out of its coronavirus slump.  The International Monetary Fund (IMF) forecasts China’s economy will slow to 1 percent this year and then surge 8.2 percent in 2021. The U.S. economy is forecasted to contract 8.0 percent in 2020 before a more 4.5 percent acceleration in 2021, according to the IMF. 
  • The IMF has slashed its global economic forecasts for 2020, saying the coronavirus pandemic is causing a much steeper recession and a slower recovery than initially expected. The organization said Wednesday that it thinks global GDP will contract by 4.9 percent this year, downgrading its estimate from April, when output was forecast to shrink by 3 percent.
  • Apple will re-close seven U.S. retail stores in the Houston, Texas area as COVID-19 cases spike across the state, according to the company’s website.  Last week, Apple re-closed stores in Florida, North Carolina, South Carolina, and Arizona for similar reasons.
  • Vitamin and herbal supplement retailer GNC has filed for bankruptcy, with plans to close at least 800 to 1,200 locations and possibly sell itself.