Wed, May 25, 2022


Vast coronavirus stimulus bill in limbo as crunch time arrives on Capitol Hill

An enormous stimulus bill aimed at shielding the economy from the battering ram of the coronavirus was in limbo Sunday morning on Capitol Hill ahead of key meetings and votes that will determine its path forward.

Two days of negotiations among Senate Democrats and Republicans and Trump administration officials produced agreements on some key components of the legislation, but negotiators missed a self-imposed 5 p.m. deadline Saturday for a deal. 

Several hours later, Senate Majority Leader Mitch McConnell, R-Ky., announced Republicans would be moving forward to write "final legislative text" of the bill anyway, ahead of a procedural vote at 3 p.m. Sunday afternoon - angering Democrats who said important issues remained unresolved.

McConnell hosted a meeting at 11 a.m. Sunday with Minority Leader Charles Schumer, D-N.Y., House Speaker Nancy Pelosi, D-Calif., House Minority Leader Kevin McCarthy, R-Calif., and Treasury Secretary Steven Mnuchin. The outcome of that meeting is likely to be crucial in whether a deal can be struck. 

"I think we have a fundamental understanding and we look forward to wrapping it up today," Mnuchin said on "Fox News Sunday."

Text of the massive legislation was still being finalized by the Republican side. A senior administration official, speaking on condition of anonymity to describe internal deliberations, said the price tag was around $1.8 trillion - which could effectively grow well beyond $2 trillion because of flexibility given to the Federal Reserve to inject more capital into the economy. It would be by far the largest financial rescue ever attempted by Congress, dwarfing legislation passed during the financial crisis of 2008.

The emerging legislation includes around $250 billion to send out $1,200 checks to many American adults, along with $500 or $600 for kids, the administration official said. In a change from an initial version of the bill, adults who qualify for the benefits would all get the same amount of money. An initial version of the bill would have directed smaller checks to poorer Americans because they have less tax liability. The cash disbursements in the new agreement would begin to phase out for people with incomes of $75,000 and above, the official said.

The legislation also includes about $100 billion for hospitals, and about $250 billion to beef up state unemployment insurance programs - both major priorities for Democrats.

An additional $400 billion would go to distressed industries, including $58 billion for the aviation industry, the official said. Negotiators were looking at language to exclude airline suppliers from being able to tap the fund, which would effectively block Boeing and GE, given their problems prior to the coronavirus outbreak.

The precise design of this funding stream couldn't be learned, but negotiators have looked at allowing the government to make direct loans to impacted industries. It's unclear who would set the terms for these loans or decide which companies qualify and which do not.

The legislation includes an additional $300 billion for small businesses, which was originally put into the bill to encourage companies not to cut workers and so that they could retain the ability to keep sending out payroll checks. Also, around $100 billion in emergency supplemental appropriations is sought for a variety of public health and other needs, and there are also a number of tax and health policy changes.

A senior GOP Senate aide, speaking on condition of anonymity to discuss internal deliberations, said that "everything is still on track" for the afternoon procedural vote to move forward on the bill.

"At the end of the day Democrats have gotten too much to walk away now," the official said.

But a Democratic official, also speaking on condition of anonymity to discuss ongoing talks, said: "We're just seeing text, we're hoping to work in a bipartisan way but we're still not there yet."

Negotiators in both parties said they were at a logjam over federal funding to rescue large businesses. Democratic leadership has demanded that any federal "bailout" money to corporations include protections related to workers, such as ensuring their job security and health care, pensions, and 401(k) contributions, as well as prohibitions on discharging their collective bargaining agreements.

They have also balked at giving Mnuchin wide latitude to decide how the extra money is spent. It was unclear if Senate Democrats would vote against the package unless more robust worker protections are included or Congress had more say over how the money was allocated. The disagreement has created a difficult impasse in deliberations, according to three people aware of the internal talks.

McConnell appears to be gambling that Democrats will feel they have no choice but to vote to keep the legislation moving, given the scale of the unfolding crisis. There are more than 26,000 confirmed covid-19 cases in the U.S., huge numbers of layoffs are happening with more expected, stocks have tumbled, and hospitals are begging for supplies. Much of the nation is at a standstill.

The package, Mnuchin said, includes two weeks of cash flow to help small businesses with their payroll and overhead, cash checks averaging $3,000 for a family of four, enhanced unemployment insurance and new abilities for the Federal Reserve to inject liquidity into the economy.

Mnuchin said he expected the sweeping economic package is designed to last for about 10 to 12 weeks, and the administration would revisit whether it would need to seek additional assistance from Congress. He said he expects a vote on the package Monday morning.

Mnuchin dismissed a question on whether the United States was already in a recession as a "technical" one that was "not terribly relevant," but acknowledged that economic activity will certainly be reduced this quarter and that whether it would in the subsequent three months will depend on the trajectory of the virus.

Democrats have argued that without protections for workers the companies receiving bailout money could fire their employees, which would undermine the purpose of the federal assistance.

"We are the ones who are on the front lines fighting the virus," said Sara Nelson, president of the Association of Flight Attendants, which has pushed for strong labor protections in any federal assistance to the airlines. "Our entire economy depends on relief focused on workers. We must keep everyone in their job and connected to their health care."

The dynamic on Capitol Hill partly results from lingering resentments among Senate Republicans over the last coronavirus relief bill, a $100-billion plus package enacted last week that was negotiated between Pelosi and Mnuchin. Many Senate Republicans were unhappy with paid sick leave provisions in that bill but voted for it anyway, and to a degree they are now turning the tables on Democrats.

The enormous package now being negotiated is Congress' third coronavirus relief bill. The first one, enacted earlier this month, appropriated $8.3 billion for the public health system, vaccine development and other needs.



Published : March 22, 2020

By : The Washington Post · Erica Werner, Seung Min Kim, Rachael Bade, Jeff Stein · NATIONAL, BUSINESS, POLITICS, CONGRESS