Momentum grows on Capitol Hill for economic relief package as bipartisan group releases two bills

The group unveiled one $748 billion package that includes new unemployment benefits, small-business aid and other programs that received broad bipartisan support. The second bill includes the two provisions most divisive among lawmakers - liability protections for businesses, and about $160 billion in aid for state and local governments - with the expectation that both could be excluded from a final deal to secure passage of the most popular provisions. This second bill could end up falling out of the final deal if lawmakers do not rally around it.

Still, the progress in the bipartisan group's work comes as congressional leaders indicate momentum for quickly approving some sort of economic relief package before lawmakers leave for Christmas recess. One senior House Democrat on Sunday appeared open to advancing legislation that lacked state and local funding, a possible concession that could pave the way for an agreement. Senate Majority Leader Mitch McConnell, R-Ky., sounded hopeful and emphasized potential cooperation in a speech on the Senate floor.

The effort to break the months-long legislative logjam over economic aid has been spearheaded by Sens. Joe Manchin, D-W.Va., Susan Collins, R-Maine, Mark Warner, D-Va., Mitt Romney, R-Utah, and Lisa Murkowski, R-Alaska, among other centrist lawmakers who appeared together at a news conference Monday. And it reflects a shift in strategy, as rank-and-file members are trying to spearhead the initiative instead of deferring to congressional leaders.

The first bipartisan bill centers on providing hundreds of billions in aid in unemployment benefits and a second round of small-business relief while devoting tens of billions to other needs such as education, transit agencies, hunger initiatives and vaccine distribution.

"Bipartisanship and compromise is alive and well in Washington," Manchin said. "We've proven that."

"My hope is that our hard work will spur our leadership on both sides of the aisle, in the Senate, in the House and in the [Trump] administration, to take our products and use them as the basis for a covid-relief package that is urgently needed."

She called the group's legislation a "Christmas miracle" after months of partisan gridlock.

The two bills show how far the bipartisan group of negotiators took the process but also the limits of their effort - they were not able to completely solve some of the most complex problems. Sen. Bill Cassidy, R-La., touted the need for state and local aid to make its way into a final package, but it's unclear whether that element will survive the final stages of negotiations.

Negotiators hope that by advancing both of these measures they will draw Democratic and Republican leaders into the negotiations to speed the process along and lead to a final package. Bringing their bills to congressional leaders could kick off a new round of higher-stakes negotiating.

House Speaker Nancy Pelosi, D-Calif., discussed a relief bill with Treasury Secretary Steven Mnuchin on Sunday, and they were expected to talk again Monday. McConnell also sounded upbeat rather than narrowly denouncing his opponents, saying on the Senate floor: "The Republican side wants to make law, to agree where we can and help people who need it. I hope and believe that my Democratic colleagues feel the same way."

Lawmakers also made progress over the weekend on the government funding bills. Senior congressional leadership has aimed to include the stimulus legislation with the legislation to fund the government, but that effort has also not been finalized. Appropriators are now optimistic that a compromise could be hammered out by as early as Monday, according to aides familiar with the deliberations. Congress has until Friday to pass spending legislation to avert a government shutdown that would begin Saturday.

The legislation includes 16 weeks of unemployment benefits at $300 per week for jobless Americans and $300 billion in small-business relief, including a second round of Paycheck Protection Program funding, according to a summary of the document provided by a congressional aide.

It also includes $82 billion for schools; $13 billion in emergency food assistance; $25 billion in rental assistance; $35 billion for health-care providers; and $13 billion for farmers, ranchers, growers, and fisheries; among other measures.

The bill will also have an extension of the eviction moratorium until Jan. 31, at which point lawmakers hope the $25 billion in rental assistance would alleviate pressure on renters. Republicans resisted a longer extension of the moratorium, people familiar with the talks said. A one-month extension of the moratorium would ensure that it covers renters until after President-elect Joe Biden's inauguration, at which point he could do so unilaterally, said Diane Yentel, president and CEO of the National Low Income Housing Coalition, a nonprofit group.

"I really am optimistic this morning - very optimistic," said Bill Hoagland, a senior vice president at the Bipartisan Policy Center and former Republican staff director for the Senate Budget Committee, citing conversations with Hill aides. "Nobody wants to be the Grinch that stole Christmas this year. They'll get it done this week; I feel very confident in that for a change."

The bipartisan effort has left out another potential round of $1,200 stimulus checks, though the White House included a second stimulus check worth $600 in its proposal last week. Sens. Bernie Sanders, I-Vt., and Josh Hawley, R-Mo., have threatened to block a package that left out the stimulus checks.

"It astounds me how just a few months ago [in May] the Democratic House passed the HEROES bill - $3.4 trillion," Sanders said in an interview Monday. "What kind of negotiating is that?"

Conservatives are also mounting some opposition to the deal. Sen. Rick Scott, R-Fla., wrote an opinion article for the National Review this weekend urging Republican lawmakers not to accept funding for state and local governments, which he called rewarding "Democrats' fiscal management with more taxpayer money." Sens. Mike Lee, R-Utah, and Rand Paul, R-Ky., are among those expected among conservative activists to oppose the bill for increasing the amount of federal spending.

Some lawmakers in the bipartisan group have suggested including another round of stimulus checks in the $740 billion proposal that excludes the liability shield and state and local funding, according to two people who spoke on the condition of anonymity to share internal deliberations. Republicans have sought to keep the cost of the bill below $1 trillion, but if state aid is left out, lawmakers may have enough money available to include the checks. The bipartisan group has circulated options for structuring the checks, but it has remained divided on the issue, aides said.

McConnell floated the idea that negotiators leave out both the state and local aid provision and the liability shield, instead only voting on areas where both parties agree. Some Democratic leaders have balked at this pitch, citing potentially large budget shortfalls that could accelerate already stark layoffs among state and local governments.

House Majority Leader Steny Hoyer, D-Md., the second-highest-ranking Democrat in the House, suggested on Sunday that Democrats may be willing to support a deal leaving out the state and local aid component.

"Although I think state and local assistance is critically important, the others are critically important too," Hoyer said on CNN. "We have millions of people who are at high risk, extraordinarily, health exposure, psychological exposure. We need to act . . . If we can get [state and local aid], we want to get it, but we want to get aid out to the people who are really, really struggling and are at great risk."

Hopes of reaching a liability compromise that would be broadly satisfactory to both parties have dimmed despite work by members of the bipartisan group. Several proposals have been floated and discarded, including a Democratic idea to create an indemnity fund to reimburse businesses who are sued over pandemic issues, but major sticking points remain. Among them: settling on a definition of "gross negligence" that would allow lawsuits to move forward, creating standards for moving state tort claims to federal courts and vice versa.

People familiar with the talks said there was broad agreement on how to structure state and local funding, using a complex formula to ensure that jurisdictions use any federal relief to address pandemic-related revenue shortfalls. The formula, which takes into account both a scale of a jurisdiction's revenue loss and its population, would ensure that states and localities would be reimbursed for an equitable share of their 2020 revenue loss even as more populous jurisdictions receive larger sums.

Lawmakers have little time to reach an agreement. About 12 million Americans will lose their unemployment benefits Dec. 26 if there is no extension in aid for the jobless. Somewhere between 2.4 million and 5 million American households are at risk of eviction in January if Congress does not act, Syracuse University professor Gretcher Purser said in new research released Monday. And the U.S. economy shows new signs of deteriorating, with last week's job report the worst in months.

"The plan is alive and well, and there is no way, no way that we're going to leave Washington without taking care of the emergency needs of our people," Manchin said on Fox News on Sunday.