In GOOD News, the President and DHS have heard us loud and clear and the REAL ID deadline has been delayed! Date TBD but we’re pushing for at least a year.
Back to the WASHINGTON CORONAVIRUS UPDATE……
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The Senate has adjourned but negotiations and tensions continue.
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Leader McConnell is filing cloture (again) on the motion to proceed to a legislative vehicle that will become the Phase III Stimulus bill. This sets up a vote, under regular order, one hour after the Senate convenes on Wednesday. However – if an agreement is reached tomorrow, and the Senate agrees, could move more quickly.
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Secretary Mnuchin and key staff have met with Leader Schumer this evening.
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House Rules Committee Chairman McGovern rules out remote voting – concluding it’s too complicated.
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The Senate Has to Act –Tensions are running high and patience is short in the Senate. After two failed procedural votes, both parties are in their trenches. Treasury Secretary Steven Mnuchin is likely to forge an agreement with Senate Minority Leader Chuck Schumer (D-NY). This creates a new scenario to consider. If Secretary Mnuchin cuts a deal, then he will have to sell it to President Trump; and then Trump will have to provide cover for Senate Republicans to support the package. Both Majority Leader McConnell (R-KY) and Minority Leader Schumer have escalated their verbal frustrations with the current situation, while other members have taken to the Senate Floor to vent their emotions. There are few options for the Senate other than to push forward with negotiations. If an agreement is reached tonight, it is possible votes could occur quickly if bill text is ready.
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The Debate – Talks are focused on, among other things, uses of the economic stabilization fund as well as transparency and oversight of how funds are used.
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What the Federal Reserve Did – Federal Reserve Chairman Jay Powell essentially told the American public that the Fed will do whatever it takes to support the American economy. The Fed can go beyond what’s already done by using its 13(3) emergency powers. Here is a breakdown of what the Fed is going to do:
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Three new Fed liquidity programs:
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Main Street Business Lending Program – Supports small and mid-size businesses and will complement efforts by the Small Business Administration. More details will be coming from the Fed.
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Primary Market Corporate Credit Facility (PMCCF) –Allows companies access to credit so that they are better able to maintain business operations. This is open to investment-grade companies and will provide bridge financing of four years. Borrowers may elect to defer interest and principal payments during the first six months of the loan, extendable at the Federal Reserve’s discretion, in order to have additional cash on hand that can be used to pay employees and suppliers.
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Secondary Market Corporate Credit Facility (SMCCF) – The Fed will purchase corporate bonds issued by investment-grade U.S. companies in the secondary market.
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Essentially unlimited purchases of Treasury securities and mortgage-backed securities will occur moving forward.
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The Fed will purchase commercial mortgage-backed securities, mostly in multi-family buildings.
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The Fed is going to lend to investors who buy securities backed by consumer debt.
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The Commercial Paper Funding Facility will be expanded to help credit to municipalities by including high-quality, tax-exempt commercial paper as eligible securities
U.S. TRAVEL CURRENT ASKS/MODIFICATIONS THAT ARE CRITICAL:
We continue to urge inclusion of the following:
- Allow all tax-exempt organizations under Section 501© of the tax code to apply for SBA interruption loans under Title I, including 501©(6) and 501©(7) organizations.
- Non-profits in travel and tourism, particularly convention centers and destination marketing organizations that rely on hotel and room taxes, have been particularly hard hit.
- Expand the Sec.1102(a)(D)(iv) ‘Business Concerns with more than 1 physical location’ to include other severely impacted industries, including 71 (arts and entertainment) and 44-45 (retail trade).
- These industries have been severely impacted by closures and lack of customers related to public health restrictions.
- Allow the maximum loan size for SBA interruption loans to be based on four times the cost of operating costs (to include: payroll, rent, and mortgage interest, etc.) up to $10 million; and increase appropriations for the program to $500B to allow for such a change.
- Increasing the amount to $500 billion provides parity with the Treasury Department program for larger businesses, since small businesses are particularly impacted and equally important to the overall economy.
- Increasing the maximum loan amount from 2.5x monthly average payroll to 4x average operating costs which is necessary to provide support for small businesses that will continue to face prolonged revenue and customer reductions due to public health measures.
Tori Emerson Barnes Executive Vice President, Public Affairs and Policy
U.S. Travel Association
1100 New York Avenue, NW Suite 450
Washington, D.C. 20005
M 202.697.1300
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