Budget Blog

December 21, 2020 - Washington Report

By Leah Wavrunek posted 12-21-2020 05:45 PM

  

This Week on the Hill

The House and Senate are in session this week to vote on a fiscal year 2021 spending bill and COVID-19 relief.

 

Fiscal Year 2021 Budget and COVID-19 Relief Update

Yesterday Congressional leaders announced a deal had been reached on a fiscal year 2021 omnibus and COVID-19 relief. Also attached to this legislation is language addressing tax extenders, surprise medical bills, the Water Resources Development Act (WRDA) and clean energy, among other provisions. The full text of the consolidated bill can be found here.

The current continuing resolution (CR) funding the federal government expires at midnight tonight. The House has indicated they plan to vote on the bill today while the timing in the Senate is unclear; the Senate may pass the legislation in time or there may be another short-term CR to allow completion of votes. The President is expected to sign the legislation.

COVID-19 Relief

The following provisions are included in the COVID-19 relief portion of the bill:

  • Coronavirus Relief Fund: Extends the deadline to December 31, 2021 for spending already appropriated money but does not include any additional flexibility or funding.
  • CARES Act Lending Facilities: Rescinds unobligated amounts appropriated in the CARES Act for direct loans by Treasury and emergency lending by the Federal Reserve and sets December 31, 2020 as date for termination of CARES Act facilities.
  • Labor-Health and Human Services-Education:
    • $4.5 billion for state, local, territorial, and tribal public health departments;
    • $300 million to distribute and administer vaccines to high-risk and underserved populations;
    • $22.4 billion for testing, contact tracing, and other COVID-19 response activities;
    • $4.25 billion to provide increased mental health and substance abuse services and support;
    • $10 billion for Child Care and Development Block Grants and $250 million for Head Start;
    • $82 billion Education Stabilization Fund including $54.3 billion for K-12, $22.7 billion for higher education and $4.1 billion for the Governor’s Emergency Education Relief Fund (with $2.75 billion reserved for non-public schools).
  • Homeland Security:
    • Up to $2 billion in assistance through states for families with funeral expenses due to COVID through December 31, 2020. Waives 25 percent state match.
  • Transportation-Housing and Urban Development:
    • $10 billion to support state departments of transportation and certain local transportation agencies;
    • $2 billion in grants for operations and personnel cost of airports;
    • $1 billion to Amtrak, including $284.7 million to assist states and commuter rail providers in making required payments to Amtrak;
    • $14 billion in operating assistance for transit emergency relief.
  • Unemployment Insurance:
    • Extends Pandemic Unemployment Assistance (PUA) to March 14, 2021, increases the number of weeks of benefits an individual can claim from 39 to 50;
    • Extends emergency unemployment relief for governmental entities and nonprofit organizations through March 14, 2021;
    • Restores the Federal Pandemic Unemployment Compensation (FPUC) supplement to all state and federal unemployment benefits at $300 per week from December 26 to March 14, 2021;
    • Extends through March 14, 2021 reimbursement for cost of waiving the “waiting week” for regular unemployment compensation, with reimbursement set at 50 percent after December 26;
    • Extends Pandemic Emergency Unemployment Compensation (PEUC) to March 14, 2021, increases number of weeks of benefits that can be claimed from 13 to 24 weeks;
    • Extends accumulation of interest on federal loans to states through March 14, 2021;
    • Allows states to waive recovery of “Lost Wages Assistance” overpayments if recipient was not at fault and would suffer hardship.
  • Tax Relief:
    • Refundable tax credit of $600 per eligible family member (subject to income limitations);
    • Extends repayment period for deferred payroll taxes through December 31, 2021;
    • Extends the refundable payroll tax credits for paid sick and family leave through the end of March 2021.
  • Small Business Assistance:
    • $284.5 billion for the Paycheck Protection Program and makes multiple programmatic changes, including $15 billion for loans issued by community financial institutions and $15 billion for loans issued by certain small depository institutions;
    • $25 million for the Minority Business Development Centers program;
    • $20 billion for the Targeted Economic Injury Disaster Loan Advance program;
    • $15 billion for grants to shuttered venue operators.
  • Provides $2 billion to motorcoach and bus operators, school bus companies, passenger ferries, other transportation service providers.
  • Provides $25 billion to provide state and local governmental entities with funds for emergency rental assistance, with assistance prioritized for renter households with lower incomes and extends the CDC eviction moratorium until January 31, 2021.
  • Increases the monthly Supplemental Nutrition Assistance Program (SNAP) benefit level by 15 percent through June 30, 2021 and provides $100 million for state administrative costs through fiscal year 2021. Provides $614 million to Puerto Rico and American Samoa for nutrition assistance, including $14 million to the Commonwealth of the Northern Mariana Islands.
  • Invests $400 million in the Emergency Food Assistance Program through September 30, 2021.
  • Extends P-EBT benefits to children under the age of 6 who meet eligibility criteria.
  • Provides $175 million in emergency funding for Older Americans Act nutrition programs.
  • Provides $11.2 billion to support agricultural producers, growers and processors.
  • Provides $285 million for broadband access at underserved institutions and their surrounding communities, $250 million for the FCC’s COVID-19 Telehealth Program authorized under the CARES Act, establishes the Emergency Broadband Benefit Program (discounts for internet service and devices), and $300 million for rural broadband.

Fiscal Year 2021 Omnibus

The fiscal year 2021 spending bill provides $671.5 billion in base defense funding (a $5 billion increase over fiscal year 2020) and $656.5 billion in nondefense funding (a $20 billion increase over fiscal year 2020). The bill includes $77 billion for Overseas Contingency Operations and an additional $3.1 billion in emergency funding. A section-by-section summary of the provisions can be found here.

Other Authorizing Language

Multiple other authorizing provisions are included in the bill addressing topics including pipeline safety; REAL ID Modernization Act; supporting foster youth and families through the pandemic; Energy Act of 2020; Water Resources Development Act of 2020 (WRDA 2020); surprise medical billing (No Surprises Act); health extenders including community health centers through fiscal year 2023; elimination of Medicaid Disproportionate Share Hospital (DSH) reductions for fiscal years 2021, 2022 and 2023 and add reductions in fiscal years 2026 and 2027; extends Temporary Assistance for Needy Families and related programs through the end of fiscal year 2021; extension of various tax provisions (tax extenders) including those related to beer, wine and distilled spirits; employee retention tax credit modifications; disaster tax relief; and FAFSA simplification. A section-by-section summary of the provisions can be found here.  

 

CARES Act Implementation

The following guidance and information was recently released to implement provisions in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).  

  • HRSA Distributing $24.5 Billion from Provider Relief Fund: The Health Resources and Services Administration (HRSA) announced it has completed review of Phase 3 applications from the Provider Relief Fund and will distribute $24.5 billion to over 70,000 providers. An original allocation of $20 billion was increased in order to satisfy close to 90 percent of each applicant’s lost revenues and net change in expenses caused by the coronavirus in the first half of 2020. A state-by-state breakdown of the first batch of Phase 3 payments can be found here.
  • CDC Allocates $227 Million for COVID-19 Response: The Centers for Disease Control and Prevention (CDC) will award $140 million for COVID-19 vaccine preparedness and nearly $87 million for tracking and testing to 64 jurisdictions, including all 50 states and U.S. territories. The funding was authorized under both the CARES Act and Paycheck Protection Program and Health Care Enhancement Act and is in addition to the $200 million released in September. A list of all funds distributed to date, by jurisdiction, can be found here.
  • Education Announces HEERF Reporting Requirements: The Department of Education provided information for all institutions who are required to submit Higher Education Emergency Relief Fund (HEERF) annual performance reports. The reporting period for the first HEERF annual report will be January 5 to February 1, 2021.
  • HHS Clarifies Provider Relief Fund Allowable Expenses: The Department of Health and Human Services (HHS) released a Provider Relief Fund overview on allowable expenses. The document is intended to clarify the intent and provide examples of allowable expenses for the use of General and Targeted Distribution payments.
  • HRSA Funds Additional $9.3 Million to Rural Health Clinics to Expand Testing: The Health Resources and Services Administration (HRSA) disbursed $9.3 million to 188 previously unsupported rural health clinics, providing $49,461 per clinic site, to support COVID-19 testing. HRSA previously allocated $225 million in May. Additional information can be found here.
  • CFAP Round 2 Closes After Paying Out $12.5 Billion to Agricultural Producers: The U.S. Department of Agriculture’s Coronavirus Food Assistance Program (CFAP) Round 2 closed on December 11. The second iteration of the program saw 838,689 approved applications and total payments of $12.5 billion. The dashboard shows payments by state and commodity.

 

Administration Actions Related to COVID-19

  • CDC Calculates Cost for School Safety Precautions for In-Person Learning: The Centers for Disease Control and Prevention (CDC) released information estimating that costs per students of implementing CDC’s COVID-19 mitigation strategies range from a mean of $55 to $442. Incremental costs across states range from an additional 0.3 percent to 7.1 percent in costs needed above reported fiscal year 2018 school expenditures per student. The data includes state by state estimates.
  • Administration Updates Guidance on Vaccinations: The administration has updated a series of guidance documents relating to COVID-19 vaccines. The documents address issues including severe allergic reactions, what to expect after getting the vaccine, different vaccines, FAQs on Pfizer vaccine, and vaccine prioritization.
  • ACF Releases White Paper on Promoting Sustainability of Child Care Programs: The Administration for Children and Families (ACF) Office of Planning, Research and Evaluation released a paper on sustaining child care programs during the COVID-19 pandemic. The paper focuses on considerations for states in allocating resources and provides background on child care costs and revenues, financial needs of providers and principles to guide state decision making.
  • FEMA Publishes Fact Sheet on Title 32 Extension: The Federal Emergency Management Agency (FEMA) published a fact sheet on the extension of National Guard deployments to respond to COVID-19 under Title 32 to March 31, 2021. The fact sheet includes information on the cost share, cost and number of troops deployed, requirements to be eligible for Title 32 authorization and benefits of Title 32.
  • FDA Issues Emergency Use Authorization for Two At-Home COVID-19 Tests: The Food and Drug Administration (FDA) issued an emergency use authorization (EUA) for two at-home COVID-19 tests. First, the FDA issued an EUA for the first over the counter fully at-home diagnostic test from Ellume with results delivered in as little as 20 minutes via a smartphone. Tests are expected to be available starting in January 2021. Second, FDA issued an EUA for the BinaxNOW COVID-19 Ag Card Home Test which is authorized for use by patients at home with a prescription.
  • Veterans Affairs Releases Vaccination Plan: The Department of Veterans Affairs (VA) announced a preliminary plan for distributing COVID-19 vaccinations, first providing vaccinations to front-line VA health care workers and veterans residing in long-term care units in 37 of its medical centers across the country. As vaccine supplies increase, additional veterans will receive vaccinations based on factors such as age, existing health problems and other considerations that increase the risk of severe illness or death from COVID-19.
  • HHS Announces Testing Support for States and Territories: The Department of Health and Human Services (HHS) announced three ways the federal government will continue supporting COVID-19 testing efforts by states and territories, especially for nursing homes, into the first quarter of 2021. First, HHS plans to continue weekly shipments of sample collection supplies through at least March 2021 and likely longer. Second, HHS is collaborating with the General Services Administration (GSA) to provide a streamlined process for states, territories and other agencies to purchase point-of-care diagnostic tests. Third, HHS is allocating an additional 30 million Abbott BinaxNOW tests for nursing homes, assisted living facilities and other vulnerable groups, which should last through March 2021.
  • CISA Releases Resources on Vaccine Distribution: The Cybersecurity and Infrastructure Security Agency (CISA) released multiple resources to prepare for vaccine distribution. Guidance documents address Physical Security for Cold Storage Locations; Primer on Safe and Efficient Handling of Dry Ice; Critical Questions and Considerations for Cold Chain, Storage and Dry Ice Operations; and Cybersecurity for Owners/Operators of Cold Storage Facilities.
  • CMS Releases Vaccine Coverage and Reimbursement Toolkit: The Centers for Medicare and Medicaid Services (CMS) released an update to the Coverage and Reimbursement of COVID-19 Vaccines, Vaccine Administration, and Cost Sharing under Medicaid, the Children’s Health Insurance Program, and Basic Health Program toolkit; the toolkit was released in October and last updated on November 23. The latest update addresses clinical and operational considerations for potential vaccines as well as vaccine administration coverage.
  • CDC Updates Weekly Vaccine Allocation Data: The Centers for Disease Control and Prevention (CDC) updated its COVID-19 vaccine distribution allocations by jurisdiction for both the Pfizer and Moderna The datasets include state and territorial allocation information, including doses allocated by week and second dose shipments. Additional information on vaccine distribution can be found here.
  • CDC Releases Data on Overdose Deaths During COVID-19: The Centers for Disease Control and Prevention (CDC) released data showing over 81,000 drug overdose deaths occurred in the U.S. in the 12 months ending in May 2020, the highest number of overdose deaths ever recorded in a 12-month period. Synthetic opioids appear to be the primary driver of the increases in overdose deaths, though deaths involving cocaine and psychostimulants (such as meth), also increased. Data can be selected by state and drug class.

 

Treasury OIG Releases Two New Reporting Resources for the Portal Upload

The U.S. Department of the Treasury Office of Inspector General (OIG) recently released two new resources related to the portal upload. The OIG released the Coronavirus Relief Funds Recipient Portal Upload Data Dictionary and Coronavirus Funds Recipient Portal Upload Data Template. All resources released by the OIG related to the Coronavirus Relief Fund can be found here, including frequently asked questions that were updated on November 25.

 

FDA Grants Emergency Use Authorization to Second COVID-19 Vaccine

On Friday the Food and Drug Administration (FDA) issued an emergency use authorization (EUA) for the second vaccine for the prevention of COVID-19. The EUA allows the Moderna COVID-19 vaccine to be distributed in the U.S. for use in individuals age 18 and older. The Moderna vaccine is administered as a series of two doses, one month apart. Additional information released includes: EUA Letter of Authorization; Fact Sheet for Healthcare Providers; and Fact Sheet for Recipients and Caregivers. Following FDA’s authorization, the Center for Disease Control and Prevention’s (CDC) Advisory Committee on Immunization Practices (ACIP) issued an interim recommendation for use of the Moderna vaccine in persons aged 18 years and older for the prevention of COVID-19.

 

HHS Extends Coverage for Qualified National Guard to Administer Vaccines

Last week the Department of Health and Human Services (HHS), through the Assistant Secretary for Health, extended coverage under the Public Readiness and Emergency Preparedness Act (PREP Act) to qualified National Guardsmen administering COVID-19 vaccinations that have been authorized or licensed by the Food and Drug Administration. This extended coverage gives additional flexibility to states and territories in utilizing National Guard health and medical personnel to increase access to COVID-19 vaccinations. The guidance includes requirements that must be satisfied to authorize qualified Guardsmen to administer COVID-19 vaccinations to persons ages three or older.

 

Census Estimates U.S. Population at 332 Million

On Tuesday the U.S. Census Bureau released an estimate of the population as of April 1, 2020 as it works to complete the official 2020 Census count. The middle estimate of the U.S. population is 332.6 million and was produced using birth and death records, data on international migration and Medicare records; the low estimate is 330.7 million and the high estimate is 335.5 million. The analysis is one of two programs that the Census Bureau uses to assess the accuracy of the decennial census by estimating coverage error and contains estimates by age group and select demographic groups.

 

CMS Announces New Contracting Opportunity for Dual Eligibles

Last Thursday the Centers for Medicare and Medicaid Services (CMS) announced a new opportunity to enable Medicaid Managed Care Organizations (MCOs) to better serve enrollees who are dually eligible for Medicare and Medicaid. The new model opportunity is designed to use the power of Medicaid MCOs to coordinate Medicare and Medicaid services and improve health outcomes for dually eligible beneficiaries who are in both Medicaid managed care and Medicare fee-for-service. The opportunity is based around Direct Contracting and a Request for Applications (RFA) is expected to be released in early 2021 with participation in the model beginning in January 2022. A fact sheet on the Direct Contracting Model can be found here.

 

FEMA Announces Additional $40 Million in Flood Mitigation Funding Available

Last week the Federal Emergency Management Agency (FEMA) identified an additional $40 million in funding for the Hazard Mitigation Assistance Flood Mitigation Assistance grant program. This increase amends the Notice of Funding Opportunity issued on August 4 to reflect the total amount of grant funding at $200 million. Additional information on the change can be found here.

 

HUD Awards $46 Million for Veterans Housing

The Department of Housing and Urban Development (HUD) recently announced the allocation of $46.8 million in rental assistance and housing vouchers to help veterans at risk of experiencing homelessness. The funds are available under the HUD-Veterans Affairs Supportive Housing (HUD-VASH) Program, which combines rental assistance with case management and clinical services provided by the Department of Veterans Affairs. A list of recipients by state can be found here.

 

DOL Announces ASPIRE Initiative

On Wednesday the Department of Labor (DOL) announced a new initiative designed to assist states in aligning policy, programs and funding across multiple agencies to increase competitive integrated employment for people with mental health conditions. The Advancing State Policy Integration for Recovery and Employment (ASPIRE) initiative seeks to align state policy and funding in support of evidence-based practices. The department will choose up to six participating states through a competitive process in the coming months; states chosen must demonstrate leadership commitment from the states’ mental health, vocational rehabilitation, workforce, education, and Medicaid programs, as well as critical mental health stakeholders in their state.

 

Administration Makes Multiple Transportation Funding and Regulatory Announcements

The Department of Transportation (DOT) made a series of announcements on funding and regulatory changes. The Federal Transit Administration announced approximately $6.2 million to nine projects in seven states to support comprehensive planning efforts to improve access to public transportation and announced $544.3 million to seven projects in seven states through the Capital Investment Grants program. The department launched a new demonstration program to establish several Regional Infrastructure Accelerators which are intended to expedite delivery of transportation infrastructure projects through innovative finance and delivery methods; the notice of funding opportunity has $5 million in funding available for the program. The Federal Highway Administration announced the availability of $92.5 million in funding for fiscal year 2020 under the Ferry Boat Program, including $19.98 million through the redistribution process. The Federal Railroad Administration published a final rule on state highway-rail grade crossing action plans. Finally, the Department of Energy announced an investment of up to $128 million in funding for research and development of sustainable transportation resources and technologies including bioenergy feedback technologies, hydrogen and fuel cells, and batteries and electrification.

 

President Signs Executive Order on Economic and Geographic Mobility

Last week the President signed an executive order on increasing economic and geographic mobility. The purpose of the order is to reduce the burden of occupational regulations in order to promote the free practice of commerce, lower consumer costs, and increase economic and geographic mobility, including for military spouses. The order highlights six principles for occupational regulation reform and directs each executive department and agency to review their regulations and guidance to identify changes necessary to align with the principles. Agencies must also make a report on recommended actions to recognize and reward state, territorial and tribal governments that have policies in place in alignment with the six principles.

 

Recently Released Reports

Medicaid Long-Term Services and Supports: Access and Quality Problems in Managed Care Demand Improved Oversight

U.S. Government Accountability Office

Internal vs. External Management for State and Local Pension Plans

Center for Retirement Research at Boston College

Unemployment Compensation and the Unemployment Trust Fund: Funding UC Benefits

Congressional Research Service

 

 

Economic News

Unemployment Claims Reported for Week Ending December 12

The U.S. Department of Labor released unemployment insurance weekly claims data last Thursday that showed for the week ending December 12, the advance figure for seasonally adjusted initial claims was 885,000. This is an increase of 23,000 from the previous week’s revised level, which was revised up by 9,000 from 853,000 to 862,000. The 4-week moving average was 812,500, an increase of 34,250 from the previous week's revised average. The advance seasonally adjusted insured unemployment rate was 3.8 percent for the week ending December 5, a decrease of 0.1 percentage point from the previous week’s unrevised rate. The advance number of actual initial claims under state programs, unadjusted, totaled 935,138 in the week ending December 12, a decrease of 21,335 (or -2.2 percent) from the previous week. In addition, for the week ending December 12, 53 states and territories reported 455,037 initial claims for Pandemic Unemployment Assistance.

 

Unemployment Rates Lower in 25 States in November

New data from the Bureau of Labor Statistics shows that unemployment rates were lower in November in 25 states and the District of Columbia, higher in 7 states, and stable in 18 states. Compared to one year earlier, 48 states and the District of Columbia had jobless rate increases and 2 states had little change. The national jobless rate declined by 0.2 percentage point from October to 6.7 percent but was 3.2 points higher than in November 2019. Nonfarm payroll employment increased in 17 states in November, decreased in 3 states and was essentially unchanged in 30 states and the District of Columbia. Over the year, nonfarm payroll employment decreased in 48 states and the District and was essentially unchanged in 2 states. In November, 26 states had jobless rates lower than the U.S. figure of 6.7 percent, 11 states and the District of Columbia had higher rates, and 13 states had rates that were not appreciably different from that of the nation.

 

Federal Reserve Upgrades Economic Outlook

On Wednesday the participants in the Federal Open Market Committee (FOMC) submitted their projections of the most likely outcomes for real gross domestic product (GDP) growth, the unemployment rate, and inflation for each year from 2020 through 2023. The median change in real GDP for 2020 was -2.4 percent, an improvement over the September projection of -3.7 percent. The unemployment projection also improved, from 7.6 percent at the September meeting to 6.7 percent at the December meeting. For 2021, the median projection for real GDP at the December meeting was 4.2 percent, compared to the 4.0 percent projected in September; GDP is projected to slow in 2022 and 2023. At its December meeting the FOMC voted 10-0 to maintain the target range for the federal funds rate at 0 to .25 percent.