Congress and the Administration have agreed to a nearly $2 trillion package of urgent assistance, economic stimulus and supplemental appropriations to address the ongoing national public health emergency. This third legislative package responding to COVID 19 builds on earlier efforts (for information on the first and second please see our update here) and includes a wide range of economic supports, from expanded unemployment insurance to small-business loans, direct payments to individuals, corporate financial support, tax relief, flexibilities for student aid, and funding for research and development related to COVID-19. The Senate is expected to pass the measure quickly, although last minute drafting is continuing, and the House is exploring options for passing swiftly with the expectation that the bill will reach the President before the end of the week.
One of the major sticking points in negotiations was the unemployment insurance expansion sought by Democrats, which would broaden eligibility and increase the term and size of benefits. The final agreement expands the benefit to non-traditional workers, including the self-employed and gig workers, lengthens the benefit term to four months, and increases the maximum benefit by $600 per week. The legislation also provides for the participation of furloughed workers in these enhanced benefits with the goal of preserving their jobs as well as employer provided health insurance. This expansion of benefits is designed to complement the $1,200 in direct payments to individuals, which phases out beginning at incomes of $75,000 and ending at $99,000, with provisions doubling the benefits and the phase outs for those filing jointly as well as providing $500 per child for families.
The compromise package also includes a $500 billion fund to provide loans and loan guarantees to large businesses and a $377 billion fund to provide financial assistance to small businesses. Some of this funding is targeted, such as the approximately $60 billion earmarked for the airline industry and $17 billion seemingly for Boeing. The agreement will also provide $100 billion to hospitals and healthcare providers and $150 billion directly to state and local governments to support the frontline response efforts. Employer relief to encourage continuity in their payroll (and available to tax exempts) includes a deferral of payroll taxes for this calendar year into the next two years and a partial retention tax credit against payroll taxes for preserving jobs.
Supplemental Appropriations for COVID-19 Research
The bipartisan agreement includes emergency supplemental appropriations for the federal government to address the ongoing crisis and to support research directly related to COVID-19. Among the notable funding increases for University priorities are research agency increases of $945.5 million for NIH, $76 million for NSF, and $99.5 million for the Department of Energy’s Office of Science. The CDC gets $4.3 billion, HHS’s Biomedical Advanced Research and Development Authority receives $3.5 billion for development and productions of vaccines and treatments, and Defense Department’s medical research program gets $415 million. The National Endowments for the Arts and the Humanities also each receive $75 million to respond to the pressing needs of cultural and other institutions.
Institutional and Student Support
The agreement features a number of education-related provisions offering both supplemental appropriations and regulatory flexibility. The legislation funds a new $30 billion Education Stabilization Fund to provide support directly to institutions, with a nearly even split between K-12 and higher education. This funding will support ongoing functionality, facilitate moves to online instruction, defray unexpected COVID-19 costs, and provide emergency aid to students. The package also features a number of policy items, including a waiver from the 25 percent institutional match in campus-based aid programs, statutory flexibility to continue disbursing Federal Work-Study and SEOG money to students, in addition to lifting caps on Pell Grants duration and addressing issues with subsidized loans. Notably for student borrowers, the bill would suspend all payments and interest for all student loans held by the Department of Education through September 30, the end of fiscal year 2020.
The legislation also includes provisions to encourage charitable giving. A new above the line deduction of $300 is included, which will provide an incentive for all tax payers to give. In addition, for 2020 the 50-percent income limitation for charitable gifts is lifted for individuals and raised from 10 to 25 percent for corporations.
Looking Ahead on Capitol Hill
Congress plans to recess following final passage of this measure for at least several weeks, but Congressional staffers are expected to begin work on a “sizeable” fourth package of COVID-19 assistance as all expect further relief and economic stimulus will be needed. The contours of that package are yet to be determined, but will likely feature another mix of direct spending, benefits changes, and tax relief, with new opportunities to advance University priorities on tax, research, and education.
Federal Agencies Response
Beyond Congress, federal science agency guidance in response to COVID 19 is dynamic and fast moving. Recently, OMB issued a helpful memo to federal agencies directing them to implement flexibilities to provide relief from administrative, financial management, and audit requirements, among others, during COVID 19 crisis and the ensuing loss of operations. In response, several agencies have issued agency specific guidance documents, and others have revised earlier guidance as a result of the OMB memo. Harvard is working with federal agencies – and with Congress – to ensure that all agencies use the full range of flexibilities afforded by OMB memo. For more information, please visit Harvard’s OSP page for agency guidance and information that is kept up to date with the latest.
As the situation continues to evolve in Washington, and legislation is developed, Harvard’s Office of Federal Relations will remain closely engaged with federal lawmakers and agencies. If you have any questions on this update or Harvard’s advocacy in Washington, please feel free to be in touch with Suzanne Day (email@example.com) or Kara Haas (firstname.lastname@example.org) in our DC office.