Lots of Money is Flowing Into Washington

Just over $900 million has been spent on federal lobbying in the first quarter of 2020. The COVID-19 pandemic has created a lot of uncertainty for firms, and many of them are now lobbying so that both Congress and the executive branch will be friendly to them while sorting out this mess. Unsurprisingly, the health care industry has been leading the way, accounting for 18% of that lobbying. It is estimated that this quarter will be the most money ever spent on lobbying in history, narrowly beating out 2010's first quarter. As this pandemic continues, it will be interesting to see if companies that spent lots of money on lobbying, like Facebook, get preferential treatment from Congress or not.

In other news, although Tik Tok was just officially listed as a dangerous technology in S.2, passed during our simulation, this Tik Tok is oddly related to our last class: https://vm.tiktok.com/vQdUNp/

Proposal for Remote Voting

Senators Rob Portman (R-OH) , Dick Durbin (D-IL)  and security expert Jason Matheny at the New York Times:

An essential part of the Senate’s constitutional function, no matter the circumstances, is for senators to cast votes on legislation. We propose allowing remote voting during emergencies on a temporary basis. In times like these, that means updating Senate tradition so senators can follow the guidance of medical experts and adhere to strict social distancing measures. We are at the point where remote voting may be critical for the Senate to be able to govern on behalf of the American people and help lead our country through this crisis.

While there are logistical challenges involved, the technology exists for the Senate to adopt a secure remote voting system. Our specific proposal would authorize the Senate’s technology leadership — the Senate sergeant-at-arms — to determine the specifics of a remote voting system.

They outline three security principles:

• Identity authentication before the vote;
• Verification after the vote;
• Encryption. 

Violent Congress

Ken Burns: "In a country that had for fourscore and five years been celebrating the fact that we had been founded on this unique idea that all men are created equal, there is a disconnect - so that you begin to see that almost everything that came before the Civil War led up to it, and everything since has been, in a way, a consequence of it."


Professor Joanne Freeman (Pomona `84):


 

The book on violence in the antebellum Congress:




The title comes from this line, which provides the book's epigraph: In a letter to Senator Charles Sumner (MA) Rev. John Turner Sargent wrote that "blood would flow—somebody’s blood, either yours or Wilson’s, or Hale’s, or Giddings’— before the expiration of your present session on that field of blood, the floor of Congress.” 

Sargent was alluding to the burial place of Judas: "And the chief priests took the silver pieces, and said, It is not lawful for to put them into the treasury, because it is the price of blood. And they took counsel, and bought with them the potter's field, to bury strangers in. Wherefore that field was called, The field of blood, unto this day" (Matthew 27:6-8 KJV)

It was literally an atmosphere conducive to violence:

All this in a room that was hot, stuffy, and smelly. At the end of a typical day, with the galleries full and hours of body heat trapped in the chamber, French thought that reading aloud to members was like reading “with his head stuck into an oven.” When the House moved to larger windowless quarters in 1857, the acoustics improved but the air didn’t. This wasn’t just a matter of cigar smoke, whiskey fumes, and body odor. A series of climate studies revealed the scope of the problem: no air was circulating in the chamber, and the wisp of a draft that rose through the floor grates had to pass through a layer of “lint, dirt, tobacco quids, expectoration, and filth of every sort.” One member claimed that the “confined and poisonous” air had caused “much sickness and even several deaths,” and indeed, a handful of congressmen died during an average session, though not necessarily because of the air. Ongoing whimpering from the floor produced another study, this one demonstrating that it was thirty degrees warmer inside than outside and that the chamber smelled of sewage from the basement. Visiting the new chamber not long after it opened, French wasn’t impressed. The idea of “shutting up a thousand or two people in a kind of cellar, where none of God’s direct light or air can come in to them . . . does not jump with my notions of living,” he groused. Thirty years later, members still declared the House “the worst ventilated building on the continent."

Why did JFK focus on a Missouri senator?  Perhaps because Missouri was a swing state.  In 1960, he would carry it by less than a point, 50.3% to 49.7% for Nixon.

Thomas Hart Benton and pistols in the Senate

"Mr. Foote, who occupies a seat on the outer circle, in front of the Vice President's chair, retreated backwards down the aisle, towards the chair of the Vice President, with a pistol in his hand...

"In a moment almost every Senator was on his feet, and calls to order;" demands for the Sergeant-at-Arms; requests that Senators would take their seats, from the Chair and from Individual Senators were repeatedly made. Mr. Benton was followed and arrested by Mr. Dodge of Wisconsin, and, in the confusion and excitement which prevailed, he was heard to exclaim, from time to time: "I have no pistols!" "Let him fire!" "Stand out of the way!" "I have no pistols" "I disdain to carry arms!" "Stand out of the way, and let the assassin fire!"

"While making these exclamations, Mr. Benton was brought back to his seat; but breaking away from Mr. Dodge, of Wisconsin, who sought forcibly to detain him, advanced again towards Mr. Foote, who stood near the Vice President's chair, on the right-hand side, surrounded by a number of Senators, and others not members of the Senate. Mr. Dickinson took the pistol from the hand of Mr. Foote and locked it up in his desk, and Mr. Foote, on the advice of Mr. Butler, returned to his seat."

In 1856, Senator Sumner delivered his famous "Crime Against Kansas" speech.  He attacked the absent Andrew Butler (SC), saying he had " a mistress . . . who, though ugly to others, is always lovely to him; though polluted in the sight of the world, is chaste in his sight—I mean," the harlot, Slavery."

Two days later, Butler's cousin, Representative Preston Brooks of South Carolina, responded:




You can see the cane in a Boston museum:



Lincoln-Douglas debates 

Sam Houston:

• Was once a House member from Tennessee;
• In 1832, caned Rep. William Stanbery of Ohio;
• As a senator from Texas, was the sole Southern Democrat to vote against the Kansas-Nebraska Act.
• On the eve of the Civil War, won the Texas governorship but refused to take an oath to the Confederacy.

Why a Texas senator?  Ike carried the state in 1952 and 1956 and JFK needed to win it back.  In 1960 -- even with LBJ on the ticket -- he carried it by only two points, 50.52%to 48.52%.

Congress and the Civil War

The congressional oath of office dates from this era.

Background on the impeachment process.

There is an entire site on the Johnson impeachment.

See the Tenth Article of Impeachment:

[Johnson did] make and deliver with a loud voice certain intemperate, inflammatory and scandalous harangues, and did therein utter loud threats and bitter menaces as well against Congress as the laws of the United States duly enacted thereby, amid the cries jeers and laughter of the multitudes then assembled and in hearing ... Which said utterances, declarations, threats, and harangues, highly censurable in any, are peculiarly indecent and unbecoming in the Chief Magistrate of the United States, by means whereof said Andrew Johnson has brought to high office of the President of the United States into contempt, ridicule, and disgrace, to the great scandal of all good citizens, whereby said Andrew Johnson, President of the United States, did commit, and was then and there guilty of a high misdemeanor in office.

JFK's account:

• Airbrushes Andrew Johnson, who opposed secession but not for reasons of human rights: "Damn the negroes. I am fighting those traitorous aristocrats, their masters."
• Overlooks the possibility of bribery

Lucius Lamar

Canadian Parliament Meeting Virtually

Apparently Canada's parliament has started meeting virtually this week (on Zoom). They are not doing remote voting and are still passing laws in person, but I thought this was an interesting peek into what the future of Congress could possible look like over the next few months. They also all seem to have problems with muting themselves...

https://www.politico.com/news/2020/04/28/canadian-parliament-gathers-virtually-219155

Drunk History

Lobbying Does Not Stop

David Beavers and Daniel Lippman at Politico:

WHO’S HIRING LOBBYISTS FOR HELP WITH CORONAVIRUS: Companies and trade groups that have never hired Washington lobbyists before are turning to K Street for help navigating the pandemic. Chipotle paid DLA Piper $40,000 to lobby on the coronavirus relief bill for less than two weeks last month, according to new disclosure filings. Harry’s, the razor startup, hired Ballard Partners to lobby on “relief programs.” And the National Independent Venue Association, a new trade group representing venues such as the Rebel Lounge in Phoenix and First Avenue in Minneapolis, brought on Akin Gump Strauss Hauer & Feld.

— Companies that have had a presence on K Street for years are also adding lobbying firepower. American Airlines brought on CGCN Group to lobby on legislation related to the coronavirus. The airline also retains 10 other lobbying firms. And Yelp recently added Squire Patton Boggs to monitor “tax policy in federal legislation addressing the COVID-19 pandemic,” according to a disclosure filing.

Elvina Nawaguna at Roll Call:

As the economic threat of the coronavirus pandemic emerged, a mining trade group wrote to Congress with a familiar request: reduce the tax rate coal companies pay to take care of black-lung disease victims and their widows.

That letter delivered in March was part of the mining industry’s efforts to cut its expenses, partly by tying its troubles to the pandemic.

Mandatory lobbying disclosures for January to March show the National Mining Association spent $313,000 to have discussions with Congress and the administration on a number of issues, including the black-lung excise tax and coronavirus economic relief legislation as it argued the pandemic was hurting the coal industry.

That spending was up from the $255,000 the group spent the last three months of 2019, although slightly below the $330,000 in the first quarter last year.

The House Will Not Be Back Next Week

Lindsey McPherson at Roll Call:

The House will not come back to Washington next week, House Majority Leader Steny H. Hoyer told reporters Tuesday, reversing an announcement he made on a Democratic Caucus conference call the previous day.

The change of course comes as members expressed concern about returning to Washington while some areas in the region are developing into coronavirus hot spots. Hoyer said the decision to delay the return, which had been briefly scheduled for May 4, came after he talked with the Capitol physician, Brian Monahan, who said he recommended against taking the risk involved in members returning.

“The house doctor, when I talked to him yesterday, was concerned because the numbers in the District of Columbia are going up,” the Maryland Democrat said. “They’re not flat, and they’re not going down.”

According to data released by the district, the number of people testing positive for the coronavirus grew 29 percent, from 3,098 to 3,994, between April 20 and Monday. Deaths increased from 636 to 660.

Congressional HIstory I

No, the land beneath Washington was not a swamp.

Average population per House district by census year:

1810....36,377
1860..122,614
1910..210,583  -- size of House reaches 435, and stays there
1960..410,481
2010..709,760

Until the 17th Amendment, state legislatures chose US senators.

Congressional Tenure




"All of American history comes from the Civil War. It is the most important event in our history. Everything before it led up to it, everything since, everything, is a consequence of it." -- Ken Burns


From Article I, section 2

Representatives and direct Taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers, which shall be determined by adding to the whole Number of free Persons, including those bound to Service for a Term of Years, and excluding Indians not taxed, three fifths of all other Persons.

Akhil Amar on the Three-Fifths Clause:

• Slaveholding states had additional House members;
• Many slave states skewed district maps in favor of slaveholding regions of the state;
• Additional House members meant more electoral votes.

Consequences -- From William Lee Miller, Arguing About Slavery:

• Five of the first seven presidents were slaveholders [Washington, Jefferson, Madison, Monroe, Jackson].
• For 50 of the presidency's first 64 years, the chief executive was a slaveholder. 
• For 28 of the House's first 35 years, the speaker was a slaveholder
• The Senate's president pro tem was usually a slaveholder.
• Most cabinet members and Supreme Court justices were slaveholders.
• Slaveholder Andrew Jackson named slaveholding Roger Taney to succeed slaveholding John Marshall to serve as chief justice.

John F. Kennedy and Profiles in Courage

• Ted Sorensen wrote much of it, probably most of it.
• JFK was thinking about running for president, and in the mid-1950s, a Democrat needed the South.  Map of 1956 election: 

Adams

• Embargo: In 1807,  Jefferson asked Congress to embargo Britain as retaliation for British aggression against US merchant ships. The embargo hurt the Massachusetts economy.
• Odd parallel to JFK's own life.
• The House picks Adams in 1824
• The myth of the whisper spot
• The Gag Rule

Territorial Expansion and Slavery



Calhoun denounces the "all men are created equal" line in the Declaration

Compromise of 1850:

• California admitted as a free state; 
• The rest of the Mexican cession was divided into the territories of New Mexico and Utah and organized without mention of slavery; 
• The claim of Texas to part of New Mexico was satisfied by a payment of $10 million;
• Fugitive Slave Act was passed to apprehend runaway slaves and return them to their masters; and 
• Slave trade -- but not slavery -- was abolished in the District of Columbia.

Webster and Benton

• Chapter 4 opens by quoting Benton:  "I never quarrel, sir.  But sometimes I fight, sir; and whenever I fight, sir, a funeral follows, sir."

The Field of Blood by Joanne Freeman (PO `84)

Economic Clouds

An April 24 report from CBO:

CBO has developed preliminary projections of key economic variables through the end of calendar year 2021, based on information about the economy that was available through yesterday and including the effects of an economic boost from legislation recently enacted in response to the pandemic. In addition, CBO has developed a preliminary assessment of federal budget deficits and debt for fiscal years 2020 and 2021. CBO will provide a comprehensive analysis of that legislation and updated baseline budget projections later this year.

In the second quarter of 2020, the economy will experience a sharp contraction, and CBO’s current economic projections include the following:

• Inflation-adjusted gross domestic product (real GDP) is expected to decline by about 12 percent during the second quarter, equivalent to a decline at an annual rate of 40 percent for that quarter.
• The unemployment rate is expected to average close to 14 percent during the second quarter.
• Interest rates on 3-month Treasury bills and 10-year Treasury notes are expected to average 0.1 percent and 0.6 percent, respectively, during that quarter.
• For fiscal year 2020, CBO's early look at the fiscal outlook shows the following:
• The federal budget deficit is projected to be $3.7 trillion.
• Federal debt held by the public is projected to be 101 percent of GDP by the end of the fiscal year.

An April 22 report from the Committee for a Responsible Federal Budget:

Today, the Social Security Trustees released their annual report, showing that Social Security faces a precarious and worsening financial situation – even before accounting for the current public health crisis. The novel coronavirus (COVID-19) pandemic is likely to further worsen the program’s finances, mainly by depressing payroll tax revenue.
...
Before incorporating the adverse effects of the COVID-19 crisis, the Social Security Trustees project the program is only 15 years from insolvency.

They project the Old-Age & Survivors Insurance (OASI) trust fund will deplete its reserves by 2034, while the Social Security Disability Insurance (SSDI) trust fund is projected to be exhausted by 2065. On a theoretical combined basis – assuming revenue is reallocated between the funds in the years between OASI and SSDI insolvency – Social Security will become insolvent by 2035.

Upon insolvency, all beneficiaries regardless of age, income, or need will face a 21 percent across-the-board benefit cut, which will grow to 27 percent by the end of the projection window.

Screen Shot 2020-04-22 at 3.20.10 PM.png

The year 2035 is only 15 years away. That means the trust funds will run out of reserves when today’s 52-year-olds reach the normal retirement age and today’s youngest retirees turn 77. For perspective, the average new retiree will live to age 85, meaning Social Security cannot guarantee full benefits for many current retirees, let alone future beneficiaries (See How Old You Will Be When Social Security’s Funds Run Out).

In reality, the situation is far worse. The current economic crisis will dramatically reduce payroll tax revenue this year and beyond; it is also likely to increase disability applications. As a result, Social Security Disability Insurance is likely to be insolvent decades earlier than the Trustees project – perhaps in the 2020s – and the old age program several years earlier than projected.

Democratic Surge

Although it seemed all but certain since the start of this crisis, details about fundraising in the first quarter of the year for Congressional races have demonstrated a significant Democratic lead. Compounded with Trump losing favorability in many key battleground states, an election held today seems like it would be a sweep for Biden and the Democrats to take full control of both chambers. It will be interesting to see if Trump and the GOP can turn this ship around in time for the election.

I think this NYT piece linked below summed it up well and gives a nice status update on the current state of the general election, which for good reason hasn't been a big news topic recently.

https://www.nytimes.com/2020/04/25/us/politics/trump-election-briefings.html

Gillibrand and the US Postal Service

Senator Kirsten Gillibrand wrote an op-ed in the New York Times today outlining her Postal Banking Act which leverages "the Postal Service’s 30,000-plus locations to create access to a nonprofit bank in every community in the country, from low-income urban neighborhoods to rural areas." It would also   "offer low-cost checking and savings accounts similar to those found at other banks, access to services like A.T.M.s and mobile banking and low-interest loans for families looking for a financial bridge to cover food or heating costs." I thought this was a very innovative policy proposal and wanted to put it on everyone's radars. She also discusses the fact that the USPS will help keep our democracy alive by delivering mail-in ballots.

The House in Confinement

Mike DeBonis and Paul Kane at The Washington Post:

House Democrats have blasted President Trump’s response to the coronavirus pandemic as inept and dangerous. Party leaders insisted on the creation of a special committee to root out abuse in the nearly $3 trillion of federal aid flowing to shuttered businesses and unemployed workers. And they have called for a robust national strategy for mass testing and tracing of the illness that has claimed more than 53,000 U.S. lives.

Yet amid the biggest national crisis in generations, the one branch of government where Democrats hold power has largely sidelined itself, struggling so far to adopt remote voting, Zoom video hearings or any of the other alternative methods that have become standard for most workplaces in the age of covid-19. No administration official has appeared at a congressional hearing in over a month. Committees have been unable to meet in person to debate and advance bills. There is no firm date for when the new oversight panel will start its work.

“I haven’t had a classified briefing in over six weeks,” said Rep. Jason Crow (D-Colo.), a member of the House Armed Services Committee, which needs to reauthorize the annual policy bill for the military. Crow said he has yet to get senior Democrats to agree with his proposal to “open a nationwide infrastructure” for classified briefings for members of Congress, by using the secure rooms in regional FBI offices and military bases across the nation.

The frustration is evident among House Democrats, with many increasingly convinced that Congress is functioning as a shadow of its former self, with rank and file largely bystanders as party leaders hastily assemble massive spending bills. More than a dozen told The Washington Post in recent days that the House was failing to meet its constitutional mandate amid an epochal global crisis, abdicating power to the Trump administration as the nation demands strong political leadership.

“We’re basically ill-prepared for the nature of this emergency,” said Rep. Denny Heck (D-Wash). “Obviously, there are a lot of things going on with how this money is being spent that are clearly not in keeping with the spirit of what we intended, and it’s harder for us to exercise oversight when we’re all at home in our war rooms.”

Examples of witnesses testifying in Congressional hearings via remote video ...

-- Sept. 28, 2005
-- July 18, 2007
-- May 20, 2008 pic.twitter.com/KynoRMO8DF

— Howard Mortman (@HowardMortman) April 26, 2020

Post-Simulation Saturday

At the New York Times, Jonathan Martin and Maggie Haberman report that Republicans worry not only about a Trump loss but a Democratic wave on Capitol Hill.

Democrats raised substantially more money than Republicans did in the first quarter in the most pivotal congressional races, according to recent campaign finance reports. And while Mr. Trump is well ahead in money compared with the presumptive Democratic nominee, Joseph R. Biden Jr., Democratic donors are only beginning to focus on the general election, and several super PACs plan to spend heavily on behalf of him and the party.
..

The surveys also showed Republican senators in Arizona, Colorado, North Carolina and Maine trailing or locked in a dead heat with potential Democratic rivals — in part because their fate is linked to Mr. Trump’s job performance. If incumbents in those states lose, and Republicans pick up only the Senate seat in Alabama, Democrats would take control of the chamber should Mr. Biden win the presidency.

...
Most of the incumbent House Democrats facing competitive races enjoy a vast financial advantage over Republican challengers, who are struggling to garner attention as the virus overwhelms news coverage.

Still, few officials in either party believed the House was in play this year. There was also similar skepticism about the Senate. Then the virus struck and fund-raising reports covering the first three months of this year were released in mid-April.

Republican senators facing difficult races were not only all outraised by Democrats, they were also overwhelmed.

In Maine, for example, Senator Susan Collins brought in $2.4 million while her little-known rival, the House speaker Sara Gideon, raised more than $7 million. Even more concerning to Republicans is the lesser-known Thom Tillis of North Carolina. Republican officials are especially irritated at Mr. Tillis because he has little small-dollar support and raised only $2.1 million, which was more than doubled by his Democratic opponent.

“These Senate first-quarter fund-raising numbers are a serious wake-up call for the G.O.P.,” said Scott Reed, the top political strategist at the U.S. Chamber of Commerce.

Interesting: As GOP bashes opponents’ ties to Beijing, Mitch McConnell’s sister-in-law Angela Chao is a non-executive director of the Bank of China, which Trump owes tens of millions to, due soon...https://t.co/c17ebEj1zp via @politico

— Jane Mayer (@JaneMayerNYer) April 24, 2020

Friday Update

Emily Cochrane at NYT:

The House gave resounding approval on Thursday to a $484 billion coronavirus relief package to restart a depleted loan program for distressed small businesses and to provide funds for hospitals and coronavirus testing, and it moved to ramp up oversight of the sprawling federal response to the pandemic.

 President Trump said he would quickly sign the measure — the latest installment in a government aid program that is approaching $3 trillion — which passed with broad bipartisan support even as some liberal Democrats condemned it for being too stingy. But the fight over what should be included foreshadowed a pitched partisan battle to come over the next round of federal relief, which is likely to center on aid to states and cities facing dire financial straits.

Burgess Everett and Sarah Ferris at Politico:

The ink is barely dry on Congress’ latest $484 billion check to combat the coronavirus pandemic, but an epic fight over the next massive relief bill is already in full tilt.
Democrats failed to secure billions for reeling state and local governments in the last round, and they vow the money will be the centerpiece of the next chapter of talks. But they’re running into a buzzsaw named Mitch McConnell.

“As a general proposition, my experience with Democrats over the years is there’s nothing they love better than an opportunity to spend money,” McConnell (R-Ky.) said in an interview this week.

The Senate majority leader is ridiculing the idea of sending aid to beleaguered states and has even suggested he’d prefer states declare bankruptcy rather than get rescued by the federal government — drawing gasps from Democratic leaders.

 Cristina Marcos at The Hill:

The House on Thursday voted to create a select committee to oversee the federal response to the coronavirus crisis, with Republicans accusing Democrats of trying to use it as a cudgel against President Trump during an election year.

The panel, to be led by House Majority Whip James Clyburn (D-S.C.), is set up to include 12 members — seven Democrats and five Republicans — and will have broad investigative authority over how taxpayer dollars are allocated and the Trump administration’s preparations for the crisis.
A resolution to formally establish the select committee passed on a vote of 212-182 along party lines, with Rep. Justin Amash (I-Mich.) voting with Republicans in opposition.

Speaker Nancy Pelosi (D-Calif.) announced the creation of the committee earlier this month, but Thursday was the first time the full House could vote to officially establish the panel. 

Last Assignment, Spring 2020

Answer one of the following:

1. Take any of JFK’s “profiles in courage.” How might a critic disagree with the analysis? How does this story illustrate differences and similarities between the Congress of its time and the Congress of today?
2. As an earlier post mentioned, all of JFK's profiles involve white men.  Write a profile in courage. Choose a woman or person of color who has served in the House or Senate.  In light of JFK'S concept of courage (see the first and last chapters of the book), identify and explain your subject's courageous action. In this action,did this person face obstacles that a white male would not have encountered?
3. Analyze a proposal for congressional response to emergency.  What are the arguments for and against?  Should Congress adopt it?  Three examples:

• Remote voting
• Filling mass vacancies in the House by appointment
• Choosing a president in case of post-election deadlock, death, or disability

• You may also write on a topic of your choice, subject to my approval.
• Essays should be typed (12-point), double-spaced, and no more than four pages long. I will not read past the fourth page. 
• Submit papers as Word documents, not pdfs.
• Cite your sources. Use Turabian/Chicago endnotes. 
• Watch your spelling, grammar, diction, and punctuation. Errors will count against you. Try to get your essay to the Sakai dropbox by May 8.  (It is best to finish it that week in case you have finals the next week.)

Immigration Ban or Campaign Move?

On Tuesday, Trump released more details on his executive order which would effectively limit issuing permanent residency visas for 60 days (excluding farm workers, landscapers and crab pickers — the largest source of immigration).

Trump argues that it would be " wrong and unjust" for American jobs to be replaced by immigrants while the unemployment rate reaches unprecedented levels. But, the President refuses to ban temporary foreign workers who play a crucial role in supplying food and staffing industries.

According to Envoy Global, an immigration service provider, immigrants make up a substantial portion of crucial sectors, "including 17 percent of healthcare workers, 24 percent of direct-care workers, including the nurses and assistants, and 28 percent of high-skilled professionals in the field, including physicians and surgeons" 

Although the Trump administration hides behind the pretext of health and security, the prospective executive order fails to accomplish any of his touted goals. Ultimately, the measure it meant to galvanize his base in anticipation of the upcoming election while ignoring the very real and pressing health crisis.

https://www.politico.com/news/2020/04/21/trump-immigration-green-card-coronavirus-198498

S.A. 79 for S. 3302

116th Congress         S.A. 79

2nd Session

To amend S.3302

---

IN THE SENATE OF THE UNITED STATES

April 22, 2020

Mr. Romney (for himself) introduced the following amendment

---

IN GENERAL.— The Global Health Security Act of 2020 is amended by adding the following after Sec. 10. Authorization of Appropriations—

SEC. 11. BUSINESS STABILIZATION DIRECT LOAN PROGRAM.

(a) In General.—The Administrator of the Small Business Administration shall carry out a program to make loans directly to eligible borrowers.

(b) Eligible Borrower Defined.—In this section, the term “eligible borrower” means a person who—

(1) is a small business concern as defined under section 3 of the Small Business Act (15 U.S.C. 632); and

(2) is located in a State or territory of the United States with a confirmed or presumed positive case of COVID–19.

(c) Use Of Funds.—In addition to the use of proceeds currently permitted under section 7(a) of the Small Business Act (15 U.S.C. 636(a)), loans made under this section may be used for the following purposes:

(1) To make periodic payments of principal and interest, for a period not to exceed 12 months, on a loan or a loan guarantee made to an eligible borrower that meets the eligibility standards of such section 7(a).

(2) To provide benefits to employees of the eligible borrower, including group life insurance, disability insurance, sick leave, annual leave, educational benefits, paid family leave, or retirement benefits (including a pension plan or IRA).

(3) To pay wages to employees of the eligible borrower, and related State and Federal payroll taxes, except that loan proceeds may not be used to pay amounts under a garnishment order issued by an agency of a State or Federal Government.

(4) To provide technology, hardware, or software for a shift to telework or remote work for employees of the eligible borrower to enable continuity of operations.

(5) To pay rent or utilities due or owed on any place of business of the eligible borrower.

(6) To refinance an existing debt (including interest) in an amount not to exceed 50 percent of the amount of the debt.

(7) To provide floor plan financing or other revolving line of credit.

(8) To pay past-due Federal, State, or local payroll taxes, sales taxes, or other similar taxes that are required to be collected by the eligible borrower and held in trust on behalf of a Federal, State, or local government entity.

(9) To provide employees and patrons of the eligible borrower with the necessary items specified by any public health authority to mitigate the spread of COVID–19.

(d) Loan Terms.—

(1) AMOUNT.—Loans made under this section may not exceed $2,500,000.

(2) DISBURSEMENT.—Not less than 10 percent, but not more than 20 percent, of the proceeds of a loan made under this section shall be disbursed not later than 5 calendar days after a loan is approved under this section.

(3) TERM.—Loans made under this section shall be for a term of 10 years, and a borrower shall not be required to repay such loan during the 12-month period beginning on the date of disbursement of the loan.

(4) INTEREST; FEES.—The Administrator may not charge any interest rate exceeding 5%

(e) Collateral.—The Administrator shall not decline to make a loan under this section to an otherwise eligible borrower if their collateral exceeds 30% of the amount of the loan. The Administrator shall accept any available collateral, including subordinated liens, to secure a loan made under this section.

(f) Sunset.—

(1) IN GENERAL.—Except as provided in paragraph (2), the Administrator of the Small Business Administration may not make a loan under this section after September 30, 2022.

(2) EXTENSION.—The Administrator may extend authority to make loans under this section by an additional 6 months by notifying Congress, in writing, within 10 calendar days before any extension.

(h) Emergency Rulemaking Authority.—

(1) IN GENERAL.—Within 15 days after the date of the enactment of this section, the Administrator of the Small Business Administration—

(A) shall issue rules to carry out this section; and

(B) may issue rules to establish a secondary market for loans made under this section.

(2) NOTICE.—The notice requirements of section 553(b) of title 5, United States Code shall not apply to any issuance of rules under paragraph (1).

(i) Authorization Of Appropriations.—There is authorized to be appropriated to the Administrator of the Small Business Administration such sums as may be necessary to pay for the cost of making $30,000,000,000 in direct loans under this section. In the previous sentence, the cost of direct loans shall be as defined in section 502 of the Congressional Budget Act of 1974 (2 U.S.C. 661a).

SEC. 12. ECONOMIC INJURY DISASTER LOANS.

(a) Terms.—With respect to a loan made under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)) in response to COVID–19, the Administrator of the Small Business Administration—

(1) may make such a loan to a start-up small business concern;

(2) may waive any rules related to affiliation; and

(3) shall, with respect to such a loan made to a cooperative, waive any requirement that the borrower of such loan provide a personal guarantee to repay such loan.

(b) Preliminary Amounts.—

(1) IN GENERAL.—An applicant for a loan under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)) in response to COVID–19 may request that the Administrator provide an advance in the amount requested by such applicant (not to exceed $10,000) to such applicant within 3 days after the Administrator receives an application from such applicant.

(2) VERIFICATION.—Before disbursing amounts under this subsection, the Administrator shall verify that the applicant is a small business concern (as defined under section 3 of such Act (15 U.S.C. 632)).

(c) Approval And Ability To Repay For Small Dollar Loans.—With respect to a loan made under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)) in response to COVID–19 that does not exceed $100,000, the Administrator—

(1) may approve an applicant based solely on the credit score of the applicant and shall not require an applicant to submit a tax return or a tax return transcript for such approval; or

(2) may not use alternative appropriate methods to determine an applicant’s ability to repay.

(d) Emergencies Involving Federal Primary Responsibility Qualifying For Small Business Administration Assistance.—Section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)) is amended—

(1) in subparagraph (A), by striking “or” at the end;

(2) in subparagraph (B), by striking “or” at the end;

(3) in subparagraph (C), by striking “or” at the end;

(4) by redesignating subparagraph (D) as subparagraph (E);

(5) by inserting after subparagraph (C) the following:

“(D) an emergency involving Federal primary responsibility determined to exist by the President under the section 501(b) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5191(b)); or”;

(6) in subparagraph (E), as so redesignated—

(A) by striking “or (C)” and inserting “(C), or (D)”;

(B) by striking “disaster declaration” each place it appears and inserting “disaster or emergency declaration”;

(C) by striking “disaster has occurred” and inserting “disaster or emergency has occurred”;

(D) by striking “such disaster” and inserting “such disaster or emergency”; and

(E) by striking “disaster stricken” and inserting “disaster- or emergency-stricken”; and

(7) in the flush matter following subparagraph (E) (as so redesignated), by striking the period at the end and inserting the following: “: Provided further, that for purposes of subparagraph (D), the Administrator shall deem that such an emergency affects each State or subdivision thereof (including counties), and that each State or subdivision has sufficient economic damage to small business concerns to qualify for assistance under this paragraph and the Administrator shall accept applications for such assistance immediately.”.

(e) Credit Elsewhere Requirements.—The flush matter following subparagraph (E) (as so redesignated) of section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)) is amended by striking “That no loan or guarantee” and all that follows through “credit elsewhere.” and inserting the following: “The interest rate on a loan or guarantee made under this paragraph shall be not more than 5 percent, if the Administrator determines the applicant is not able to obtain credit elsewhere, or not more than 6 percent, if the Administrator determines the applicant is able to obtain credit elsewhere.”.

(f) Eligibility.—Section 7(b)(2) of the Small Business Act is amended by striking “small agricultural cooperative” and inserting “small cooperative”.

(g) Additional Amounts.—

(1) IN GENERAL.—The Administrator of the Small Business Administration may increase by 2 percent the amount received by an eligible small business concern under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)) to cover continuity-of-operations and risk mitigation improvements, including telework capability, offsite record keeping, redundancy, the administrative costs of establishing paid sick leave, and presenteeism prevention.

(2) DEFINITION.—In this section, the term “eligible small business concern” means a small business concern that—

(A) meets the applicable size standard established under section 3 of the Small Business Act (15 U.S.C. 632); and

(B) is receiving assistance under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)) related to COVID–19.

(h) Authorization Of Appropriations.—There is authorized to be appropriated to the Administrator to carry out the loan program under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2))—

(1) $90,000,000 for administration costs; and

(2) $10,000,000,000 to provide loans or other assistance.

SEC. 13. MAXIMUM LOAN AMOUNT FOR 504 LOANS.

(a) Purpose.—The purpose of this section is to make refinancing of fixed assets more flexible for small business concerns seeking immediate financing and relief from the COVID–19 crisis.

(b) Temporary Increase.—During the period beginning on the date of enactment of this section and ending on September 30, 2021, with respect to each project or loan guaranteed by the Administrator pursuant to title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.) for which an application is approved or pending approval on or after the date of enactment of this section, the maximum loan amount shall be $20,000,000.

(c) Permanent Increase For Small Manufacturers.—Effective on October 1, 2021, section 502(2)(A)(iii) of the Small Business Investment Act of 1958 (15 U.S.C. 696(2)(A)(iii)) is amended by striking “$5,500,000” and inserting “$7,000,000”.

SEC. 14. PROVIDING ADDITIONAL LIQUIDITY FOR SMALL-BUSINESS LOANS 

(a) Purpose.—The purpose of this section is to provide the Federal Government with additional liquid assets which can then be used to finance loans for small-businesses, micro-businesses, and individuals struggling with the effects of COVID-19, as well as other appropriations that are in the interest of the Federal Government.

(b) Temporary Increase.—During the period beginning on the date of enactment of this section and ending on September 30, 2021, the following amendments are enacted—

1. 26 USC Ch. 51 § 5001 is amended by striking “$2.70 per proof gallon in the case of distilled spirits” and replacing it with “$2.90 per proof gallon in the case of distilled spirits”.

(B) 26 USC Ch. 1 section (j) subsection (5) is amended by striking “$77,200” and replacing it with $74,000”.

(C) 26 USC Ch. 2 §1401 subsection (b) is amended by striking “in the case of a joint return, $250,000” and replacing it with “in the case of a joint return, $200,000”.

(c) Permanent Increase

(A) 26 USC Subtitle A, Chapter 1, Subchapter J, Section (c), Subsection (2) is amended by striking “shall be zero” and replacing it with “shall be $10,000”.

(B) Section 216(l) of  42 U.S.C. 416(l) Paragraph 1 Subparagraph E is amended by striking “67” and replacing it with “75”.

(C) Section 216(l) of  42 U.S.C. 416(l) Paragraph 2 is amended by striking “62” and replacing it with “70”.

(D) 26 USC Subtitle A, Chapter 1, Subchapter J section (c), subsection (4) is amended by striking “If a portion of an electing small business trust ceases to be treated as a separate trust under paragraph (1), any carryover or excess deduction of the separate trust which is referred to in section 642(h) shall be taken into account by the entire trust.”

SEC. 15. GRANTS TO SMALL BUSINESS DEVELOPMENT CENTERS, WOMEN’S BUSINESS CENTERS, AND CHAPTERS OF THE SERVICE CORPS OF RETIRED EXECUTIVES.

(a) In General.—The Administrator of the Small Business Administration shall provide grants to small business development centers, women’s business centers, and chapters of the Service Corps of Retired Executives for the purposes described in subsection (b).

(b) Use Of Funds.—Grant funds under this section shall be used for the following:

(1) To purchase laptops, software, and other related technical or electronic equipment to ensure that employees of small business development centers, women’s business centers, and chapters of the Service Corps of Retired Executives may telework and provide remote customer service in response to a public health emergency declared because of COVID–19.

(2) To create marketing materials for employees of small business development centers, women’s business centers, and chapters of the Service Corps of Retired Executives to educate customers on available training and counseling resources relevant to a public health emergency declared because of COVID–19.

(c) Definitions.—In this section:

(1) ADMINISTRATOR.—The term “Administrator” means the Administrator of the Small Business Administration.

(2) SERVICE CORPS OF RETIRED EXECUTIVES.—The term “Service Corps of Retired Executives” means the Service Corps of Retired Executives established under section 8(b)(1)(B) of the Small Business Act (15 U.S.C. 637(b)(1)(B)).

(3) SMALL BUSINESS DEVELOPMENT CENTER.—The term “small business development center” has the meaning given in section 3 of the Small Business Act (15 U.S.C. 632).

(4) WOMEN’S BUSINESS CENTER.—The term “women’s business center” means a women’s business center as described under section 29 of the Small Business Act (15 U.S.C. 656).

(d) Authorization Of Appropriations.—There is authorized to be appropriated $500,000,000 to the Administrator to carry out this Act, of which not less than $100,000,000 shall be used for grants to women’s business development centers.

SEC. 16. GRANT PROGRAMS FOR SMALL BUSINESS DEVELOPMENT CENTERS, WOMEN’S BUSINESS CENTERS, AND CHAPTERS OF THE SERVICE CORPS OF RETIRED EXECUTIVES.

(a) Small Business Development Center Grants.—

(1) SMALL BUSINESS DEVELOPMENT CENTER GRANTS.—The Administrator of the Small Business Administration shall provide grants to small business development centers (as defined in section 3 of the Small Business Act (15 U.S.C. 632)) for the purposes described in paragraph (2).

(2) USE OF FUNDS.—Grant funds under this subsection shall be used to educate, train, and advise owners and employees of small business concerns (as defined under section 3 of the Small Business Act (15 U.S.C. 632)) on the following matters:

(A) The hazards of and prevention of the transmission and communication of COVID–19 and similar communicable diseases.

(B) The potential effects to the supply chains, distribution, and sale of products of the concern, and the mitigation of such effects, during a period of a public health emergency declared because of COVID–19 or a similar communicable disease.

(C) Any other relevant business practices necessary to mitigate any economic effects experienced during a period of a public health emergency declared because of COVID–19 or a similar communicable disease.

(3) FORMULA.—The Administrator and the association authorized under section 21(a)(3)(A) of the Small Business Act (15 U.S.C. 648(a)(3)(A)) shall jointly establish a formula under which grants under this subsection shall be awarded.

(4) METRICS AND GOALS.—

(A) IN GENERAL.—The Administrator and the association described in paragraph (3) shall jointly establish goals and metrics for the use of funds made available under this subsection. Such goals and metrics shall—

(i) consider the extent of the circumstances relating to the spread of COVID–19 or a similar communicable disease that affect small business concerns served by each grant recipient, particularly rural areas or economically distressed areas;

(ii) ensure grant recipients comply with the requirements of paragraph (2) while also ensuring that grant recipients may have flexibility in responding to unique situations; and

(B) PUBLIC AVAILABILITY.—The Administrator shall make publicly available the methodology by which the Administrator and the association jointly developed the metrics and goals described in subparagraph (A).

(5) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated $300,000,000, to remain available until expended, to the Administrator to carry out this subsection.

(b) Establishment Of Women’s Business Center And Service Corps Of Retired Executives Grants.—

(1) IN GENERAL.—The Administrator of the Small Business Administration shall provide grants to women’s business centers (as described under section 29 of the Small Business Act (15 U.S.C. 656)) and to chapters of the Service Corps of Retired Executives (established under section 8(b)(1)(B) of the Small Business Act (15 U.S.C. 637(b)(1)(B))) for the purposes described in paragraph (2).

(2) USE OF FUNDS.—Grant funds under this subsection shall be used to educate, train, and advise owners and employees of small business concerns on the following matters:

(A) The hazards of and prevention of the transmission and communication of COVID–19 and similar communicable diseases.

(B) The potential effects to the supply chains, distribution, and sale of products of the concern, and the mitigation of such effects, during a period of a public health emergency declared because of COVID–19 or a similar communicable disease.

(C) The management and practice of telework or remote customer service by electronic or other means to reduce possible transmission of COVID–19 and other communicable diseases.

(D) The risks and mitigation of cyber threats in remote customer service or telework practices.

(E) The mitigation of the effects of reduced travel or outside activities during a period of a public health emergency declared because of COVID–19 or a similar communicable disease.

(F) Business continuity plans during a period of a public health emergency declared because of COVID–19 or a similar communicable disease.

(G) Any other relevant business practices necessary to mitigate any economic effects experienced during a period of a public health emergency declared because of COVID–19 or a similar communicable disease.

(3) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated $50,000,000, to remain available until expended, to the Administrator to carry out this section.

(c) Report.—Not later than 6 months after the date of enactment of this section, and annually thereafter until the amounts authorized in subsection (a)(5) and subsection (b)(3) have been expended, the Administrator shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report that—

(1) describes, with respect to the initial year covered by the report, the programs and services developed and provided by the Administrator, small business development centers, women’s business centers, and chapters of the Service Corps of Retired Executives in response to a public health emergency declared because of COVID–19; and

(2) describes, with respect to the subsequent years covered by the report—

(A) the efforts of the Administrator, small business development centers, women’s business centers, and chapters of the Service Corps of Retired Executives to develop services to assist small business concerns affected by COVID–19;

(B) the challenges faced by owners of small business concerns in accessing services provided by the Administrator, small business development centers, women’s business centers, and chapters of the Service Corps of Retired Executives in response to a public health emergency declared because of COVID–19;

(C) the number of unique small business concerns that were served by the Administrator, small business development centers, women’s business centers, and chapters of the Service Corps of Retired Executives under the programs established by this section; and

(D) other relevant performance data with respect to small business concerns affected by COVID–19, including the number of employees affected, the effect on sales of the concern, any disruptions of supply chains, and the efforts made by the Administrator, small business development centers, women’s business centers, and chapters of the Service Corps of Retired Executives (as applicable) to mitigate these effects.