Paycheck Protection Program

• The House in a 417-1 vote approved a bill that would ease restrictions on the Paycheck Protection Program, giving borrowers 24 weeks instead of eight to spend the money and lowering the threshold that must be spent on payroll to 60 percent from 75 percent if the borrower wants full loan forgiveness. Senate Minority Leader Chuck Schumer (D-N.Y.) supports the bill and will move to put it on the floor when the Senate returns this week, according to a spokesman, but Senate Small Business Committee Chairman Marco Rubio (R-Fla.) has raised opposition due to what he said were “inadvertent technical errors” that would create barriers to loan forgiveness.

• The Small Business Administration said it has approved $512.2 billion as of May 21 in Paycheck Protection Program loans, leaving $150 billion in the $660 billion allocated to the program as demand for the loans dries up. Net weekly lending through the program has been negative since mid-May, according to SBA data, as some companies returned loans and fewer companies applied for them

Coronavirus relief 

• A senior Trump administration official said that President Donald Trump likes the idea of a return-to-work bonus for those who lost their jobs and filed for unemployment during the coronavirus pandemic, but discussions haven’t yet solidified around the size of the bonus and how long it should last, according to eight lawmakers and staffers familiar with talks around the issue. White House officials and Rep. Kevin Brady (R-Texas) have floated the idea of giving workers up to $1,200 if they find a job, three people familiar with the White House discussions said, while Sen. Rob Portman (R-Ohio) has proposed that those going back to work receive $450 a week for several weeks.

• Less than 4 percent of the $2.6 trillion available in the Federal Reserve’s emergency lending facilities has been tapped so far, according to the latest data available from the central bank. The Fed has made five of the 11 emergency lending facilities fully or partially available, with usage at $95 billion.

• Senate Majority Leader Mitch McConnell (R-Ky.) said that Congress will “probably” need to pass another coronavirus relief bill, but that he wants it to be narrowly tailored than the $3 trillion bill House Democrats approved earlier in May and that state reopenings will inform how broad of a scope the bill will have. 

Economy

• White House officials have decided they will not release updated economic projections this summer, as part of the “mid-session review” in July or August for the federal budget proposal, according to three people with knowledge of the decision, which budget experts said would be the first time it’s happened since at least the 1970s.

• Weekly initial unemployment benefit applications reached 2.1 million, a decrease of 323,000 from the previous week’s total, although still high by historical standards. Continuing claims totaled 21.05 million. 

• The Fed in its Beige Book said that economic activity dropped “sharply” heading into May in most areas of the country due to the coronavirus pandemic, with the most severe damage occurring in the travel sector. The report noted that the Paycheck Protection Program helped many small businesses keep on workers, but that employment “continued to fall sharply in retail and in leisure and hospitality sectors.”

• New York Fed President John Williams said the country could be “near the bottom in terms of the economic downturn.” 

China

• President Donald Trump said that he will move to revoke Hong Kong’s special trade status under U.S. law and that he will order financial regulators to look at Chinese firms listed on U.S. stock markets.

Insider trading investigation

• The Justice Department is closing investigations into Sens. Kelly Loeffler (R-Ga.), James Inhofe (R-Okla.) and Dianne Feinstein (D-Calif.) over stock trades made shortly before the coronavirus pandemic roiled markets, but it is continuing to investigate Sen. Richard Burr (R-N.C.), people familiar with the matter said. Burr, who temporarily stepped down as chair of the Senate Intelligence Committee earlier in May, was more directly involved in his trades, while the other lawmakers said that their investment advisers made the transactions and that they didn’t know about the trades until afterward.

• The Senate is in session, and the House is operating remotely this week. 

• Jeremy Stein, a former member of the Federal Reserve Board of Governors, will present new research at Brookings on Thursday on the stability of banks during the coronavirus pandemic. 

•  The Senate Banking Committee will host a hearing on U.S. policy tools as they relate to recent events in Hong Kong on Thursday.

1) Lawmakers compromise on PPP loan terms as talks continue
Jim Saksa, Roll Call

2) The unluckiest generation in U.S. history
Andrew Van Dam, The Washington Post

3) This Is How Deeply the Coronavirus Changed Our Behavior
Zoe Schneeweiss et al., Bloomberg

4) The general election scenario that Democrats are dreading
Rya Lizza and Daniel Lippman, Politico

5) The government has spent decades studying what a life is worth. It hasn’t made a difference in the covid-19 crisis.
Todd C. Frankel, The Washington Post

6) House passes bill to ease small business emergency loan rules
Zachary Warmbrodt, Politico

7) Why Our Economy May Be Headed for a Decade of Depression
Eric Levitz, New York Magazine

8) U.S. small firms leave $150 billion in coronavirus stimulus untapped
Ann Saphir and Howard Schneider, Reuters

9) Trump Administration Examining Idea of Back-to-Work Bonuses, Kudlow Says
Andrew Restuccia, The Wall Street Journal

10) Fraction of Fed lending facilities have been tapped so far
Colby Smith and Brooke Fox, Financial Times