Washington Snapshot: Lots of Talk, but No Deal on Next COVID Bill
In This Week's Edition of Snapshot...
Lots of Talk, but No Deal on Next COVID Bill
On Friday morning, Politico Playbook summarized the status of negotiations this way – “Ten meetings between Speaker Nancy Pelosi, Senate Minority Leader Chuck Schumer, White House Chief of Staff Mark Meadows and Treasury Secretary Steven Mnuchin over two weeks have yielded little more than bickering and resentment.”
Last night after a 3-hour meeting among the lead negotiators, we learned that another legislative COVID-19 package was not imminent. While there was agreement on smaller issues, Congressional Democrats and White House officials were unable to come to an agreement on major provisions, including enhanced unemployment insurance, state and local aid, and the cost of the package. So, what happens next is anyone’s guess.
Families, communities, schools, nonprofits, businesses, and states are continuing to respond to the impact of COVID-19, yet some of the federal programs designed to help respond to this pandemic have ended or are set to end soon. Enhanced federal unemployment benefits ended on July 31st. The extension of the Paycheck Protection Program is set to end on August 8th. In addition, Congress and the White House will need to come together to continue funding the federal government before September 30 or risk a government shutdown.
On Thursday, President Trump tweeted that he was directing his staff to prepare a series of Executive Orders to sign as early as today. According to the tweet, the Orders will include a payroll tax holiday, eviction protections, an unemployment insurance extension, and student loan repayment.
An Accurate Census
The Census Bureau announced that they would end the 2020 Census count four weeks early, moving the deadline up to September 30th. The change was met with widespread concern since an estimated 60 million households remain uncounted and many of the uncounted are in marginalized or hard to reach communities. This week, the Council on Foundations joined more than 500 philanthropic leaders to urge Secretary Ross and the US Census Bureau to maintain their original plan to continue counting households through the end of October and ensure everyone has the opportunity to be counted for an accurate Census.
Our writer for issues concerning the Executive Branch is out of the office this week.
Exclusive from our colleagues at the National Council of Nonprofits.
Congress Corrects DOL Unemployment Guidance, State Agencies Are Extending the Relief
On Monday, President Trump signed legislation to reverse guidance from the Department of Labor that required certain nonprofit employers to pay to their states 100 percent of the costs of unemployment benefits paid to their former employees and wait for repayment of half that amount at some later date. Federal and state law permit 501(c)(3) organizations and local and tribal governments to self-insure under their state unemployment system, meaning that they pay all of the costs of benefits paid to former employees rather than contribute unemployment taxes into the state trust fund. The CARES Act provides that the federal government will pay half the costs of these benefits, but the Labor Department ruling had created bureaucratic and cash flow nightmares for thousands of nonprofit organizations. The National Council of Nonprofits and the National Association of State Workforce Agencies issued a joint statement the day the bill was enacted to ensure that the states and employers got the news of the legislative fix.
State workforce agencies are swiftly responding to the new law, sending letters to self-insured (also called reimbursing) employers to adjust the invoices that had been previously sent out. The Maryland Department of Labor recently wrote to all reimbursing employers in the state announcing that although second quarter billings charged the full 100 percent of employer liabilities, the Department would accept 50 percent in light of the enactment of S.4209. Last month, the New Mexico Department of Workforce Solutions instructed all reimbursers to “disregard the request for payment” previously sent until a revised bill is created with further guidance from the U.S. Department of Labor. Similarly, Minnesota and Iowa have waived second quarter payments in response to the recent federal changes. Nonprofits that may have received incorrect invoices are encouraged to reach out to their corresponding state agency for a correction citing the new law.
State and Local Budget Projections Continue to Drop
State and county budget gaps could exceed $400 billion due to the coronavirus crisis. State tax revenues were down 29 percent, or by $200 billion, over the past three months compared with last year. Counties expect gaps of $202 billion through next fiscal year according to a recent analysis by the National Association of Counties. This estimate includes $114 billion in lost revenue and $58 billion state funding cuts for counties. Seventy-one percent of counties surveyed reported cuts or delays in capital investments and 68 percent reported cuts or delayed services. The National Governors Association recently asked Congress to “provide states with $500 billion unrestricted assistance.” According to the chief economist for the National Association of Counties, “The fiscal impacts of the coronavirus pandemic will be felt by county residents across the nation, as services are reduced and local governments make difficult decisions while balancing already strained budgets.” The U.S. Chamber of Commerce is also expressing concern, stating “The combination of falling revenue, rising costs, and balanced budget requirements will put significant and sustained stress on state and local budgets.” Nonprofits follow these government fiscal challenges closely because budget gaps often lead to spending cuts for vital services provided by nonprofit organizations.