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Policy Update: Senate Republicans Unveil HEALS Act

Last night, Senate Republicans unveiled the $1 trillion “Health, Economic Assistance, Liability Protection, and Schools” or HEALS Act, their starting proposal for the next Coronavirus relief package. This comes four days before the expiration of most additional unemployment benefits on Friday, July 31. Senate Republicans have spent the last few weeks seeking internal alignment on a proposal, and negotiating directly with the Administration, which now backs the proposal.

The proposal includes:

• A reduction in unemployment benefits from the additional $600 to $200 per week for the next two months, while states transition to a new system that would provide ~70% of an individual’s previous wages
• Liability reform, to shield businesses from being sued over Coronavirus-related damages
• Additional funding to the Paycheck Protection Program, bringing the total of new and not-yet-expended funds to $190 billion, as well as $100 billion for long-term loans to seasonal businesses and businesses in low-income areas
• A second round of $1,200 stimulus checks to individuals who make up to $75,000 annually, plus an additional $500 for each dependent
• $35 billion in health funding, including testing
• $105 billion to schools and colleges, if schools meet “minimum opening requirements”

Regarding agriculture:

• $20 billion to USDA to provide “support for agricultural producers, growers, and processors impacted by coronavirus, including producers, growers, and processors of specialty crops, non-specialty crops, dairy, livestock and poultry, including livestock and poultry depopulated due to insufficient processing access and growers who produce livestock or poultry under a contract for another entity.”
  • The inclusion of “agricultural processors” in the text means that the ethanol industry could receive direct support
• The bill allocates an additional $457 million to USDA to address other issues, including $245 million to make up for lost user fees, $113 million in rural rental assistance, and $76 million to FSA to cover temporary staff and overtime costs
• Includes a provision to provide automatic forgiveness for PPP loans under $150,000 which would benefit smaller producers
• The bill makes no changes to the Commodity Credit Corporation’s spending authority, or to the existing CFAP program

Note that as of July 27, USDA’s Coronavirus Food Assistance Program (CFAP) had expended $6.5 billion, less than half of the $16 billion authorized for the program within the CARES Act passed in March. Additionally, the enrollment period for CFAP is scheduled to end in exactly one month, on August 28.

The Republican proposal does not include some key Democratic priorities such as increased funding for SNAP, additional funding for state and local governments, and hazard pay for frontline workers. It also does not include certain Administration priorities such as a payroll tax cut.

While earlier relief packages, including March’s $2.2 trillion CARES Act, passed Congress with large bipartisan support, the two chambers and parties are now divided. The House has already passed two large relief packages, including the $3 trillion HEROES Act on May 15, and the $1.5 trillion infrastructure package on July 1, neither of which were taken up by the Senate. Democrats have already called HEALS a “non-starter,” with the only point of agreement being the second round of stimulus checks. The Senate is scheduled to go on recess at the end of next week and the House is scheduled to leave on Friday. However, this schedule is subject to change if no deal is reached.