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COVID-19 response memo, 5/13/20

  • Updated
  • 13 min to read
COVID-19 response memo, 5/13/20

BY THE NUMBERS

Number of Statewide Cases: 25,473 (+346)

Marion County Cases: 7,703 (+71)

Hamilton County Cases: 960 (+4) Johnson County Cases: 838

US Cases: 1.37M Global Cases: 4.3M

Number of Statewide Deaths: 1,482 (+38) Number of Marion County Deaths: 440 (+11) US Deaths: 82,548 (+1,648)

Global Deaths: 293,514 (+5,705)

Number of new Hoosiers Filing for Unemployment: 43,777 as of 5/7/20

FEDERAL

Senate Republicans Respond

Senate Republicans say that Speaker Nancy Pelosi’s (D-Calif.) new $3 trillion coronavirus relief package is dead on arrival in the upper chamber, but they are assembling ideas for a package that could pass this summer. While Senate Majority Leader Mitch McConnell (R-Ky.) called for a “pause” last week on new coronavirus legislation, rank-and-file Senate Republicans acknowledge there is growing pressure to respond to the House Democrats. One Republican senator who requested anonymity to comment on internal discussions said the “pause” posture will be politically tenable for only so long. “I think it’s viable for now. How long it remains viable is determined by what is going on in the country, what the ‘getting back out, going back to work, getting out of our homes’ begins to look like,” the senator said.

But the lawmaker said waves of new unemployment claims will put pressure on Senate Republicans to act before too long. “Unemployment numbers being what they are, I think there’s going to be an insistence that something additional happen,” the GOP senator said. The Labor Department reported Friday the national unemployment rate hit 14.7 percent in April, the highest since the Great Depression.

Senate Minority Leader Charles Schumer (D-N.Y.) has pounced on McConnell’s wait-and-see strategy to accuse Senate Republicans of “dithering.” He now regularly compares Senate Republicans to President Hoover, who resisted expansive government intervention at the start of the Great Depression and predicted the economy would swiftly recover on its own. “When

Republican leaders look at unemployment numbers and say we don’t need to act immediately, that government’s done enough already, they are the latter-day Herbert Hoovers and I fear it could lead to similar results,” Schumer said on the floor Tuesday. McConnell on Tuesday subtly shifted from last week’s call for a pause by instead emphasizing the need for additional coronavirus legislation to be “narrowly targeted.” “We’re going to insist on doing narrowly targeted legislation if and when we do legislate again, and we may well,” he told reporters.

Senate Republicans have publicly questioned the need to pass additional legislation soon, arguing that only a small portion of the $2.2 trillion CARES Act and the $484 billion of the interim coronavirus relief bill passed in April has gone out the door. But privately they admit it’s only a matter of time before another massive package passes. Senate Majority Whip John Thune (R-S.D.) said that “we’ve got a lot of members with good ideas.” If and when there is another round and there’s a need to do something, we’ve solicited ideas — our office has — and there’s a lot of good stuff coming in the door, much of which is being vetted and thought about and discussed in terms of how it might be integrated to the next CARES Act or phase four,” he said. But Thune emphasized that Republicans want to wait “until we see how some of these programs that are already authorized and funded are working.”

Two core proposals have emerged from Republican senators so far: a litigation shield for businesses that reopen while the pandemic is still going strong and a reform of beefed-up unemployment benefits that Congress approved in March that critics say are making it tougher to hire lower- and middle-income workers.

Sen. John Cornyn (R-Texas), a member of the Senate Judiciary Committee who has been tasked with overseeing the litigation reform effort, said the GOP plan could be unveiled in the next several days along with a proposal to give unemployed workers more incentive to rejoin the labor force. Republican lawmakers say they don’t see any legislation moving until June — at the earliest. But they say it’s important to start putting together a list of priorities. We’re in the process about talking about and drafting some thoughts,” Cornyn said of the litigation protection piece. “We’re not in any big hurry. I think we’ve got a little bit of time here, but obviously this is not the end. There will be additional legislation.” “We’ll be rolling some of that out here in the next couple of days,” he added.

The White House has been pushing for a payroll tax cut, which has attracted criticism from both sides of the aisle. It’s unlikely that Senate Republicans will embrace the tax cut. Sen. Rob Portman (R-Ohio) is spearheading informal discussion on reforming beefed-up unemployment benefits so that generous payments approved in the CARES Act don’t become an obstacle to rehiring workers. Portman is floating a proposal under which workers would be allowed to keep a portion of their unemployment insurance if they go back to work. “We’re finding from employers back home that as they reopen, they’re having a difficult time getting workers and part of it is because of the unemployment [insurance] issue,” he said. “The idea is to allow them to take some of their $600 back to work with them.” The CARES Act, which Congress approved in March, provides a $600 weekly addition to regular state-provided unemployment benefits.

Some Republicans such as Sen. Lindsey Graham(S.C.) has criticized the benefit as too generous because it exceeds typical wages for many jobs in South Carolina, thereby creating a “perverse incentive” not to work.

McConnell on Tuesday afternoon identified “this liability issue” as “essential in moving us safely into phase one and hopefully phase two of reopening the economy.” “Without it, frankly, that’s just not going to happen as soon as it should have,” he added. Senate Republicans acknowledge that neither liability protection nor unemployment benefits reform is going to move on its own without significant concessions to Pelosi and the Democrats. They say Democrats will likely demand a high price for including liability protection in a future coronavirus bill.

A group of senators on the Senate Republican Steering Committee met Monday night to discuss whether it would be worth giving in to Democratic demands to enact liability reform, even though it’s a high GOP priority.

Sen. Mike Braun (R-Ind.), who attended the meeting, said, “That will be a difficult trade-off for some depending on what price it comes at. A few of us talked about that [Monday] night. How much is it worth to get [liability reform] when you’re then getting into the tricky dynamic of many states that have run their state governments where this is close to a bailout for them.” Some Republican senators are pushing for hundreds of billions of dollars to be included in the next round of coronavirus relief.

Sen. Bill Cassidy (R-La.), who has proposed a $500 billion “SMART Fund” to help state and local governments, predicts more Republicans will back his plan when they become more aware of the severe financial hardships they face. Once legislators begin to hear from their governors, state legislatures, mayors — that’s when you have to do your whip count,” he said. Sen. Josh Hawley (R-Mo.), meanwhile, is pushing an ambitious proposal for the federal government to cover 80 percent of wages — up to the national median wage — for workers at any U.S. business. He also wants to give businesses a bonus for rehiring laid-off workers.

Coronavirus Likely Forced 27 Million Off Health Insurance

Roughly 27 million people likely have lost job-based health coverage since the virus shocked the economy, Axios' Bob Herman writes from new estimates from the Kaiser Family Foundation.

  • Why it matters: The virus is blowing up health insurance at a time when people need it most.

Most of these people will be able to sign up for other sources of coverage, but millions are doomed to be uninsured in the midst of a pandemic.

  • For the 27 million people who are losing their job-based coverage, about 80% have other options, said Rachel Garfield, a health policy expert at the Kaiser Family Foundation and lead author of the report.

Speaker Pelosi's latest coronavirus relief bill would fully subsidize the cost of maintaining an employer plan through COBRA — an option that would otherwise be prohibitively expensive for many people.

  • But that's a long way from becoming law.

State-By-State Reopening Guide

Bookmark this page: The U.S. Chamber of Commerce recently launched this interactive state map (with accompanying guides) to help track business reopening guidelines across each state and provide the latest information on reopening to America’s employers.

Update on Second Round of PPP Funding

The Small Business Administration (SBA) released updated information on funding levels for the second round funding for the Paycheck Protection Program (PPP). SBA has now approved over 2.6 million loans for a total of more than $191 billion during the second round. Over $115 billion in funding remains available for small businesses.

CFPB, FHFA, HUD Launch Mortgage and Housing Assistance Website

Yesterday, the Consumer Financial Protection Bureau (CFPB), the Federal Housing Finance Agency (FHFA), and the Department of Housing and Urban Development (HUD) launched a website that will provide tools to consumers affected by the coronavirus pandemic. The website provides information on mortgage relief, protections for renters, resources for additional help, and information on how to detect and avoid scams related to COVID-19 assistance. The website also provides tools for homeowners to determine if their mortgage is federally backed, and renters to determine if their rental unit is financed by FHA, Fannie Mae or Freddie Mac. CFPB and HUD also announced a partnership with FHFA on the Borrowers Protection Program, which enables the agencies to share servicing information to protect borrowers during the pandemic. A joint press release on the announcement is here.

Fed Updates Borrower and Collateral Eligibility Criteria for TALF

The Federal Reserve on Tuesday provided additional information for borrowers and collateral eligibility criteria requirements for the Term Asset-Backed Securities Loan Facility (TALF). The facility was announced on March 23 to support the flow of credit to consumers and businesses. To ensure this support continues, TALF will make up to $100 billion in loans available. The Fed also announced information it will publicly disclose on a monthly basis for the TALF and Paycheck Protection Program Liquidity Facility (PPPLF). Information to be disclosed includes the names of participants, the amounts borrowed, interest rate levels, the value of pledged collateral, and the overall costs, revenues, and fees each facility incurs. The Fed press release is here.

Mnuchin Statement on Secondary Market Corporate Credit Facilities

Treasury Secretary Steve Mnuchin issued a statement Tuesday providing an update on the Primary and Secondary Market Corporate Credit Facilities (PMCCF and SMCCF). Mnuchin noted an improvement in liquidity and credit market functions since the facilities were announced on March 23. Mnuchin also announced the Federal Reserve Bank of New York will begin purchasing shares of eligible exchange traded funds (ETFs) in the secondary market

through the SMCCF. The New York Fed will also buy eligible corporate bonds following the purchase of eligible ETFs. When up and running, the PMCCF will provide loan and bond financing to U.S. companies with investment grade debt ratings as of March 22, 2020. The facilities are supported by a $75 billion equity investment authorized by the CARES Act, which will allow the facilities to provide up to $750 billion in liquidity.

CMS Issues Nursing Homes Best Practices Toolkit to Combat COVID-19

Today, under the direction of President Trump, CMS released a new toolkit developed to aid nursing homes, Governors, states, departments of health, and other agencies who provide oversight and assistance to these facilities, with additional resources to aid in the fight against the coronavirus disease 2019 (COVID-19) pandemic within nursing homes. The toolkit builds upon previous actions taken by the Centers for Medicare & Medicaid Services (CMS), which provide a wide range of tools and guidance to states, healthcare providers and others during the public health emergency. The toolkit is comprised of best practices from a variety of front line health care providers, Governors’ COVID-19 task forces, associations and other organizations, and experts, and is intended to serve as a catalogue of resources dedicated to addressing the specific challenges facing nursing homes as they combat COVID-19.

SBA Issues Guidance on Borrowers’ Good Faith Certification of Need for PPP Loans

On May 13, 2020, the SBA issued FAQ 46 regarding the following certification each borrower must make regarding the necessity for obtaining a Paycheck Protection Program (PPP) loan: “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the applicant.” FAQ 46 builds on the SBA’s prior guidance contained in FAQs 31, 37 and 43, which together provide that a borrower who returns its loan proceeds in full by May 14, 2020 will be deemed to have made the certification in good faith.

Borrowers Whose Loans Are Less Than $2 Million Will Be Deemed to Have Made the Certification in Good Faith.

FAQ 46 creates a safe harbor for a borrower whose loan(s), in the aggregate with its affiliates, total(s) less than $2 million. Such borrowers will be deemed to have made the certification in good faith. The SBA’s reasoning is that this safe harbor promotes economic certainty for such borrowers, who in general have more limited resources and less access to sources of liquidity than borrowers with larger loans. The SBA also notes that the safe harbor will allow the SBA to focus its resources on larger loans.

While not stating that loans under $2 million are exempt from audit, it may be that the SBA will not audit any loan under $2 million unless otherwise confronted with fraud or other indication of malfeasance, perhaps uncovered by a lender, third party or a whistleblower.

Loans over $2 million will be audited, and if the SBA determines a borrower did not have an “adequate basis” for making the certification in good faith, the borrower will be given the chance to repay the loan.

Borrowers who have loans over $2 million will be audited and will have to prove they made the certification in good faith. In this new guidance, the SBA has indicated that if they determine that any such borrower lacked an adequate basis to make the determination, the borrower will be given an opportunity to repay the loan funds. If the borrower repays the loan funds, then it appears that the borrower will not be referred to any other agency or subject to further proceedings based on the audit. If the borrower does not pay the loan funds, FAQ 46 does not explicitly state that fines and prosecution will follow, but the implication is that it is possible.

Additionally, as with loans under $2 million, there would still be risks based on fraud or other indication of malfeasance, perhaps uncovered by a lender, third party or a whistleblower. A link to the PPP FAQs can be found here: Frequently Asked Questions (5/13/2020).

STATE

An Estimated 186,000-plus Hoosiers Have or Had COVID-19, New Study Says

About 186,000 people in Indiana were estimated to be infected or previously infected with COVID-19 at the end of April, according to preliminary study results released Wednesday by the Fairbanks School of Public Health at IUPUI. The school, in partnership with the Indiana State Department of Health, based the estimate on testing for COVID-19 and its antibodies it conducted from April 25 to May 1. The tests involved 4,611 randomly selected Hoosiers representing all demographics and regions in the state. Those tested were both showing symptoms of the virus and the asymptomatic.

“Ideally, you know, we really would like to test every single Hoosier, but the next best thing to doing that is random sample testing—a scientific approach that allows us to confidently assess how COVID-19 has spread in Indiana, without really having to test everyone, which is just not feasible,” said Paul Halverson, founding dean of the Fairbanks School of Public Health.

The testing found 1.7% of those tested had the virus and another 1.1% had antibodies for the virus, indicating a previous infection. Adding those together, researchers came up with a 2.8% infection rate. That rate indicates 186,000 people in the state had been infected as of May 1.

Actual testing at the time, mostly conducted on symptomatic people, showed about 17,000 cases in the state. “Only about one out of every 11 true infections were identified by tests,” said Nir Menachemi, chair of the health policy and management at Fairbanks. The study, which is in its first phase and subject to adjustments, showed an infection death rate of 0.58%. In comparison, the death rate of those with the seasonal flu is about 0.1%. It also showed 44.8% of those who are infected experience no symptoms.

State officials and Fairbanks researchers said that is why it’s important for Hoosiers to continue social distancing and wearing a mask while in public. “We should all conduct ourselves like we are infected,” Indiana State Health Commissioner Kristina Box said. “And it’s been a little heartbreaking for me to see some of the pictures that people have been sending in where people are standing in line back to back next to each other. They’re not social distancing, and people are not wearing masks.” And Fairbanks researchers stressed that even with 186,000 Hoosiers already being infected, millions more still have not gotten the disease. “As we slowly phase back and reopen the economy, we need to be extra vigilant with any and all safety precautions, so that we do not lose the ground that we gained by hunkering down,” Menachemi said.

The Fairbanks research also showed that people who live with an infected person are 12 times more likely to get the virus than those who don’t. A second wave of testing is scheduled for June 3-7, which is slightly delayed from the initial dates suggested for the second round. Menachemi said they decided it was better to wait until after the Memorial Day holiday to maximize participation, and researchers wanted to conduct the second wave after more of the economy had reopened so the data can provide a better understanding of what kind of impact the looser restrictions have on the spread of COVID-19. “If we just tested everyone today when, you know, everything is still pretty much hunkered down, we wouldn’t expect to see that much of a change,” Menachemi said. Gov. Eric Holcomb allowed most of the state to begin reopening on May 4. His five-stage approach calls for restrictions being completely lifted by July 4, but he has said he is willing to adjust the schedule as needed. “If I walked away from this study with anything in my head, it’s this is a long road ahead,” Holcomb said.

LOCAL

Marion County to Ease Stay-Home Order Friday, With Several Restrictions Indianapolis Mayor Joe Hogsett on Wednesday said he will begin easing Marion County’s pandemic stay-at-home orders on Friday but with several major exclusions not found in the state’s reopening plan.

  • Nonessential retailers and shopping malls will be allowed to open at 50% capacity, he said, and social gatherings and worship services will now allow up to 25 people instead of 10.
  • In-person dining will not be allowed until May 22, and only at restaurants with outdoor seating. The city said it would work to expand the right-of-way to allow restaurants to offer more outdoor dining in coming weeks.
  • Indoor dining at 50% capacity won’t be allowed until June 1 under the plan.
  • Liquor stores will be allowed to operate at 50% capacity beginning Friday
  • The Indianapolis Public Library system will be allowed to offer curbside pickup.
  • Personal services such as barbers, hair and nail salons, and tattoo parlors will remain closed until further notice, he said.
  • Industrial nonessential manufacturing facilities also must remain closed until further notice, he said.

Hogsett said Marion County essentially will be following Stage 2 of the state’s roadmap to reopening, except for the exceptions. Under the state plan, almost all businesses were allowed to reopen with some limitations on May 4 (except in Marion, Lake and Cass counties). Restaurant dining rooms around the state, malls and non-essential retailers were able to open at 50% capacity. Personal services such as hair salons, barber shops, nail salons, spas and tattoo parlors were allowed to open May 11 by appointment only. “We are phasing in Stage 2, and I think we’re doing so responsibly,” Hogsett said. “If the data starts to show there will be an uptick, we’ll have to make adjustments accordingly.”

As part of the county’s reopening plan, city and county officials are working to build a stockpile of face coverings for residents who need one. And in partnership with Indy Chamber, the city will establish a $5 million grant to help small businesses pay for personal protection equipment that will be needed as they reopen. Details of those programs and information about what restaurants need to do to expand outdoor dining are expected to be released soon. Hogsett gave no target date for when additional phases will begin, but he encouraged businesses who are not allowed to reopen Friday to look over Gov. Eric Holcomb’s plan. The mayor said the city is allowing data to drive decisions about what can reopen.

IMPORTANT LINKS

Links to all executive orders may be found here: https://www.in.gov/gov/2384.htm

Link to the Stay-At-Home Order FAQ may be found here: https://www.in.gov/gov/3232.htm

More information may be found at the ISDH website at in.gov/coronavirus/ and the CDC website at https://www.cdc.gov/coronavirus/2019-ncov/index.html.

Editor & Publisher

Founder of NUVO, a new voice for Indy, and first executive director of the non-profit, nuvo.net. My purpose is to increase civic participation through informed storytelling and the search for common ground through dialogue.

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