Unsanitized: The COVID-19 Report for July 28, 2020

The HEALS Act Emerges
It's an absurd start to the negotiating process

 

Mitch McConnell holds in his hands information about a fairly terrible
piece of legislation called the HEALS Act. (Susan Walsh/AP Photo)

First Response

The HEALS Act - a $1 trillion piece of legislation so comically in
hock to corporate interests that one of the initials in the acronym
stands for "liability protection" - was released yesterday. This was
done in a super annoying format where separate committee chairs released
their own titles (Finance
;
Appropriations
;
Small Business
),
but you can mostly piece everything together.

Here's what we've got:

Unemployment: Increased unemployment insurance immediately falls from
$600 a week to $200. This extension runs until the end of the year.
Combined with what the states offer, that's on average a cut from $921
to $521 (around 43 percent), according to an analysis from the Century
Foundation. Allegedly, after two months, states will figure out how to
individually replace 70 percent of lost wages and offers that, with a
cap of $500 from the government in that equation. The cap means that
everyone will have lower support from unemployment under this plan.

I highly doubt that states will figure this out, given the technical
hurdles and the underfunded systems (which do get a $2 billion boost
here), and in that instance they just stick with the $200 a week
addition. Also everyone gets a note saying they are required to take a
suitable job if offered. Also the federal stipend counts as income for
purposes of determining eligibility for other federal benefits.

This only affects those on standard unemployment, not "Pandemic
Unemployment Assistance" for freelance and gig workers and independent
contractors. That was already extended to the end of the year in the
CARES Act. However, the HEALS Act tightens eligibility to make it as
hard to stay on assistance as possible. The whole thing is appalling.

Second stimulus: This is pretty much exactly the same as the CARES Act,
with $1,200 for adults and $500 for dependents (not just children, in a
switch from CARES), up to $75,000 in personal income (based on last
year) and then a sliding scale that phases out completely under
$100,000. One cheerful note: "The rebates are protected from bank
garnishment or levy by private creditors or debt collectors." This is
something near and dear to us at Unsanitized, as we broke the news

that creditors, including banks, could grab stimulus checks to offset
old debts. It's gratifying that Congress is finally getting around to
making sure survival money goes to survival.

Read all of our Unsanitized reports here

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Business tax credits: The "employee retention tax credit" sounds boring
but this is a pretty large bonus for businesses that could cost as much
as $100 billion. It was in the CARES Act but this provision allows more
companies to use it. There's also a tax credit for hiring unemployed
workers and a "safe and healthy workplace" tax credit for expenses like
testing, PPE, and cleaning supplies (this is Lysol's big moment
;
move over, Amazon).

Health care: There's $118 billion in new money for hospitals, testing,
contact tracing, treatment, and vaccines. The Medicare Part B premium
for 2021 would be frozen. Telehealth waivers would be extended to
facilitate contactless medical care. There's a bunch of what seems
like for-show assistance to nursing homes, including "strike teams" and
better reporting. A good health rundown here
.

Schools: As previously reported, there's $105 billion for education,
split between K-12 and higher ed with a substantial portion of it only
for those schools that reopen in the fall. Amazingly that's all the
money there is for state and local government, and I'd gather all of
it covers increased costs for social distancing measures. The $150
billion previously released in the CARES Act, which previously was only
for increased COVID costs, can now go toward covering revenue
shortfalls, with many restrictions. But that's not new money. The
House Democratic Heroes Act had nearly $1 trillion for state and local
government.

Random appropriations: Includes $20 billion for farmers, $29 billion for
defense (a slush fund for defense contractors
and the
F-35), a $1.8 billion earmark for a new FBI headquarters

that just so happens to be near a Trump hotel, $10 billion for a very
sketchy "airport improvement program" (I think they're just paying off
airports to stay open), and about $3 billion for tenant rental
assistance, a drop in the ocean of what will be needed. There's also
$5.3 billion more to use the Defense Production Act to require certain
manufacturing.

Coupons!: Expensing of restaurant business meals goes up

from 50 percent to 100 percent. Because you want to be doing business in
the middle of a restaurant during the pandemic.

Small business grants: There's a "Second Draw" PPP loan enabled for
smaller businesses (under 300 employees) with a 50 percent drop or more
in revenue during the crisis. There are also new "Recovery Sector"
20-year loans at a 1 percent interest rate, also for hard-hit
industries. Section 113 of this title makes 501(c)(6) organizations
eligible for regular PPP loans; this is the K Street bailout

that's also in the House bill. The math is weird, but it looks like
$157 billion in new money, on top of the remaining $120 billion-plus.
(There's already massive lobbying

over these plans to pry them open for bigger businesses)

Liability protection: This has been well-documented, it's a five-year
blanket release from a "flood" of business liability lawsuits that
don't exist
.

Student loans: After the deferral deadline in the CARES Act runs out on
October 1, you can only defer student loan payments if you have no
income. Otherwise there's a 10 percent income-based repayment option.
The Trust Act: we reported last week that a Mitt Romney-created process
to inevitably cut Social Security and Medicare

would be in the bill. It is.

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Here's what's missing: There's no extension of the eviction
moratorium, no money for the postal service or the November elections,
no hazard pay for essential workers, no OSHA standards for workplaces,
no money to shore up pensions, no funds for people who lost
employer-sponsored health insurance, no increase to food stamp benefits.
And none of the $1 trillion in new money for state and local government.

It's in some ways a waste to lay this out, as now we move to the
negotiating stage. But all of the above being off the table frames the
corners of the debate. Nearly the entire framework of the Heroes Act was
thrown out. Democrats have some leverage

because rank and file Republicans really don't want to pass this bill
at all. But what will they be able to claw back as a result? And
doesn't that put the CARES Act in a different context, as whatever
emerges is likely to be very inadequate?

One final indignity: the Republican baseline may include (it's
completely unclear) the repeal of leverage requirements

for banks put in place under the Dodd-Frank Act. This is a straight
handout to Wall Street. What's notable here is that this was the
signature contribution to Dodd-Frank from endangered incumbent Susan
Collins, who I've been told argued against this but was rebuffed.
There's no way McConnell does this if Collins had a chance of winning;
you don't strip a Senator's biggest policy achievement of the last
decade in the middle of a tight election if you think she's going to
win. The signal I get is that McConnell knows he's beat, and the
strategy for the next six months is just to steal whatever's not
bolted down on behalf of corporate America.

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Odds and Sods

Over at the Prospect today, Les Leopold analyzed

some mortality statistics in New York City and performed a regression
analysis, finding that the main feature affecting death rates during the
outbreak is actually income. Lower-income people, regardless of race,
had a higher chance of dying from coronavirus. It's a really good
analysis. Read it here
.

Also Shera Avi-Yonah, one of our Prospect interns, breaks down
the
difficulty registering student voters, and even determining where they
should vote if they haven't returned to campus or are learning
remotely. Read it here
.

You can find all of our coronavirus coverage at prospect.org/coronavirus
. And reach out to me via email
with tips, comments, and perspectives.

Days Without a Bailout Oversight Chair

123
.

We Can't Do This Without You

Today I Learned

* Fascinating analysis of the "K-shaped" recovery
,
with rich and poor going in different directions. (Axios)

* Google keeping employees home for another year
,
which is a signal that's going to ruin commercial rents and office
vacancy rates. (Wall Street Journal)

* Tennessee refuses to close bars
.
Fortunately I had "stubbornness" in the "cause of American extinction"
pool. (Tennessean)

* Dean Baker does the math

showing how vaccine maker Moderna is ripping off the government (Beat
the Press)

* The "infection control officer" for the Minnesota Vikings has COVID-19
.
(The Hill)

* Herman Cain has been hospitalized for nearly a month
.
(Talking Points Memo)

* That Chainsmokers concert on Long Island where everyone was huddled
together? Turns out the CEO of Goldman Sachs
,
who's a DJ, performed at it. (CNBC)

* Visiting Disney World

during the pandemic. (The Atlantic)

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