September 16, 2020
Jessica L. Jeane
Director of Public Policy and Communications
The prospects of another bipartisan economic stimulus and Paycheck Protection Program (PPP) expansion bill clearing Congress before the November election appear to be standing on shaky ground. While the fate of a broad COVID-19 relief package remains uncertain, there is little chance of a stand-alone PPP bill, a senior Senate GOP aide told the National Society of Accountants (NSA).
Paycheck Protection Program in Limbo
The PPP, enacted under the bipartisan Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-136) on March 27, 2020, appears in limbo as numerous uncertainties remain concerning loan forgiveness, deductibility of ordinary business expenses, and whether small businesses will have access to another round of loans. Generally, additional PPP legislation has bipartisan support in both the House and Senate. However, Senate Democrats quashed a GOP measure last week that proposed various expansions and enhancements to the PPP, citing that it didn’t go far enough across the relief board, so to speak.
NSA recently spoke with John Gimigliano, principal-in-charge of the legislative and regulatory services group of the Washington National Tax practice of KPMG LLP, about the chances of seeing another stimulus and PPP expansion bill clearing Congress in the coming weeks. Prior to joining the firm in 2008, Gimigliano was senior tax counsel for the Committee on Ways and Means and staff director for the Subcommittee on Select Revenue Measures in the U.S. House of Representatives.
“The Democrat-controlled House and GOP-controlled Senate have been at loggerheads for months on whether to do more COVID relief and if so, how much,” Gimigliano told NSA. “With the election and campaigning season fast approaching, the opportunity to hammer out a compromise is fast shrinking. Still, the federal fiscal year-end of 9/30 will require a funding bill in the next two weeks and that could present the last vehicle upon which additional COVID relief could ride.”
Senate Democrats Filibuster GOP “Skinny” Economic Relief Bill
Last week, Senate Democrats along with Sen. Rand Paul, R-Ky., filibustered a GOP so-called “skinny” economic relief bill, S. 178, by a 52-47 vote. Procedurally, the bill needed 60 votes to reach the Senate floor. The measure included over $257 billion to expand the PPP, offering another round of loans for qualifying small businesses, a streamlined forgiveness process, and certain liability protections. However, Republicans’ bill was insufficient, according to Senate Democrats who want another round of individual economic relief payments and additional monetary aid for states, among other things.
“The PPP program enacted in the spring was hailed by both sides as a successful measure in blunting the blow of the immediate COVID economic downturn,” Gimigliano said. “But it appears both sides have moved on to other priorities now, perhaps leaving Congress to work at the edges of the PPP program only, rather than attempt to breathe new life into it,” he added.
Meanwhile, the bipartisan Problem Solvers Caucus released a framework proposal this week for lawmakers to consider as a potential remedy for the congressional stalemate currently holding up the next stimulus package. Similar to Senate Republicans’ bill filibustered by Democrats last week, the 50-member bipartisan Problem Solvers Caucus has recommended $240 billion in “flexible” PPP funding for a second round of loans and streamlined forgiveness process.
Apart from the possibility of a stand-alone economic relief bill, it remains to be seen whether Congress will attempt to pass a “clean” Continuing Resolution (CR) to keep the government open after October 1 or whether additional PPP relief will be attached to the government funding measure. House Speaker Nancy Pelosi, D-Calif., notified members on September 16 that the House will stay in session until a COVID-19 relief measure is passed.
Additionally, Pelosi and Senate Minority Leader Chuck Schumer, D-N.Y., released a joint September 16 statement noting that they were “encouraged” that President Trump is now calling on Republicans to negotiate a larger stimulus package. “We look forward to hearing from the President’s negotiators that they will finally meet us halfway with a bill that is equal to the massive health and economic crises gripping our nation,” Pelosi and Schumer said.
However, Senate Majority Leader Mitch McConnell, R-Ky., in a September 16 tweet alluded to reports on Capitol Hill that pressure is mounting from moderate House Democrats for Pelosi to lower her demands in negotiations. McConnell criticized Pelosi’s demands as a “multi-trillion wish list.” In that vein, Rep. Stephanie Murphy, D-Fla., member of the moderate Blue Dog Coalition, told reporters on September 16 that she is “hopeful that as leadership registers the anxiousness of members, both Democrats and Republicans, to get something done, that they will be responsive to that."
To that end, Treasury Secretary Steven Mnuchin, who has been leading the Trump administration’s discussions with lawmakers on all COVID-19 relief legislation, indicated this week that the push for another stimulus and PPP-related package was not yet over. “I will continue to work on this,” Mnuchin said. “I’ve told the Speaker that I am available any time to negotiate – no conditions.”
The core mission of the National Society of Accountants is to help tax and accounting professionals become more successful.
NSA presents this information in the interest of its members for information purposes only and is not intended to provide, nor should it be relied upon, as legal, tax, or accounting advice.