Monday, September 21, 2020

White House, GOP in disarray over spending plan as benefit expiration nears

Jul 22. 2020
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By The Washington Post · Erica Werner, Jeff Stein, Seung Min Kim · NATIONAL, BUSINESS, POLITICS, CONGRESS, WHITEHOUSE 

WASHINGTON - A major intraparty rift widened between the White House and Senate Republicans on Tuesday as they stumbled to formulate a unified coronavirus budget plan, lacking agreement on policy goals, budget parameters, or even deadlines.

The Republican and White House positions changed multiple times as the day went on, with some GOP lawmakers refusing to rally behind the White House's demand for a payroll tax cut while others worked to convince President Donald Trump's emissaries that more money was needed for testing and the Centers for Disease Control and Prevention.

Other Republican lawmakers appeared mortified about the growing size of the spending bill, bickering over which policies to remove and warning that miscalculations could allow Democrats to seize control of the White House and the Senate in November.

"What in the hell are we doing?" Sen. Ted Cruz, R-Texas, asked his colleagues at the lunch with White House officials, according to several participants who spoke on the condition of anonymity to discuss the exchange. Cruz was incensed at the push among his colleagues to boost spending levels even more.

The whole process now appears likely to spill into August, something the White House and congressional Democrats had hoped to avoid, because it would mean more than 20 million Americans would lose emergency unemployment benefits when they expire at the end of this month. They have not mapped out a plan for what would happen to these people as the pandemic's turmoil continues to weigh on the U.S. economy.

White House officials did not go into the talks with a preset strategy or a list of proposals that they knew GOP lawmakers would rally behind. This miscalculation created immediate problems. Numerous demands the White House had tried to formulate over the weekend were erased within hours.

Treasury Secretary Steven Mnuchin said Monday that the goal was to keep the spending bill at about $1 trillion, but by Tuesday he had abandoned that mantra. White House officials also backed away from demands for cuts to testing and health funds, and they retreated after a barrage of criticism of President Donald Trump's tax cut demand.

"I think we're going to spend what we need to spend, and we're going to make sure we don't spend more than that," Mnuchin said.

Democrats pointed fingers at the Republican infighting and said the White House and GOP leaders were unprepared to handle the country's mounting economic and health-care challenges. House Democrats passed a $3 trillion spending bill in May that would send another round of stimulus checks, provide more money to states, and help hospitals, among other things, but the White House has vowed to block it.

"Republicans are in complete disarray," Senate Minority Leader Chuck Schumer, D-N.Y., said. "Totally incompetent. Totally in disarray. Totally at war with one another." 

In an effort to bridge differences, Mnuchin, White House Chief of Staff Mark Meadows and National Economic Council Director Larry Kudlow met with Senate Republicans over lunch. But that led to little progress; Republicans made clear to Mnuchin and Meadows that they were not supportive of Trump's insistence on a payroll tax cut or curbed funding for coronavirus tests and the CDC. Mnuchin on Monday had insisted that the payroll tax idea was in the bill, but he did not bring it up during the lunch as the opposition snowballed, two people briefed on the interaction said.

"We haven't reached a conclusion on anything," Sen. John Neely Kennedy, R-La., said when the lunch ended.

Meadows acknowledged the discontent, telling reporters, "Well as you can imagine, any time you have Senate Republicans there, you have a number of different thoughts on what should or should not happen." 

The White House and Senate Republican leaders had tried over the weekend to put together a joint deal to bring to Democrats, but those efforts did not lead to a unified GOP position. Talks bogged down over Trump's insistence for the tax cut, something he has pushed since last year to force into law without any success. Some also bristled at Trump's insistence for curbing coronavirus testing funds and a new requirement that aid to schools would be contingent on reopening plans.

Underlying the confusion surrounding the GOP stimulus package are tensions among Trump administration officials about their priorities.

Trump is being represented on Capitol Hill by Mnuchin and Meadows, a tandem that has not brokered a deal jointly with Congress. Trump has for months worried privately that Mnuchin, his chief negotiator with Democrats, was giving away too much to House Speaker Nancy Pelosi, D-Calif., leading conservative lawmakers to push for Meadows to have a more active role in this round of talks. Before joining the White House, Meadows was a congressman and leader of the conservative House Freedom Caucus. Mnuchin, meanwhile, has a background as a banker and a Hollywood producer with few ties to the conservative movement.

On Tuesday, Meadows sat toward the back of the room and deferred to Mnuchin as he led the conversation with the GOP senators, according to two people aware of the meeting who spoke on the anonymity to share private conversations. Mnuchin discussed the importance of sending another round of stimulus checks and providing more money for the Paycheck Protection Program.

Mnuchin also told reporters that it was important for lawmakers to reach an agreement before the supplemental increase in unemployment benefits runs out by the end of this month. Republican lawmakers, including Trump, have consistently criticized that benefit increase because they think it makes it more lucrative for workers to stay home than reenter the labor market, but Mnuchin stressed the importance of providing some financial cushion for the jobless.

"Our objective is to try to get something done before the enhanced unemployment insurance expires. There's a lot of people who are still out of work," Mnuchin said. Senate Majority Leader Mitch McConnell, R-Ky., told reporters, though, that it was very unlikely a deal would be reached by the end of next week, laughing and saying no when asked whether that was possible.

Within a few hours Tuesday, it became clear that the White House was already backpedaling on several demands - before negotiations with Democrats had begun. Mnuchin and Meadows met with Senate Republican appropriators in the morning and appeared persuaded to reverse course on the funding curbs; Republicans had sought $25 billion for states for testing and tracing that the administration had initially opposed.

"We're moving in the right direction on all fronts. . . . We are making good progress," said Sen. Roy Blunt, R-Mo., a senior Appropriations Committee member, when asked about the disagreement over money for testing. 

Participants said that talks were ongoing, and that nothing had been finalized.

White House spokeswoman Kayleigh McEnany said Tuesday that the White House is seeking "targeted" money for testing, and that "we're willing to put in money for targeted testing that makes sense, not just dumping money into a pot that contains $10 billion." 

Some experts said lawmakers should approve more money and have the administration send it out quicker.

"States have been using some of this money, but the problem is that it's not enough and easy for the states to draw down," said Sam Hammond, a policy expert at the Niskanen Center, a think tank that has been working with Senate Republicans on bolstering testing. "The scale of the problem will require a lot more money than they have so far." 

These programs are just one part of what the administration and McConnell had envisioned as a $1 trillion package that is likely to be the last major coronavirus relief bill before the election.

After attending the Senate Republican conference lunch, the White House envoys met with Pelosi and Schumer.

"We will begin our conversations today. It is my hope that we can resolve our differences and have a bill by the end of next week," Pelosi told fellow Democrats on a conference call Tuesday morning, according to a person on the call who spoke on the condition of anonymity because the person was not authorized to discuss internal conversations.

There has been little GOP enthusiasm for the payroll tax cut plan, even though Trump has said he might not sign a bill that does not include it. And GOP leaders are expecting a hard sell Tuesday but appear unwavering. A few Senate Republicans - including Lindsey Graham of South Carolina and Steve Daines of Montana - have endorsed the payroll tax cut as a sound policy.

But senators and aides said Mnuchin did not talk about the payroll tax cut during the Senate GOP lunch. Instead he was confronted by complaints about the size of the emerging package, with some lawmakers who had voted for the $2 trillion Cares Act in March saying they could not support the new package if it exceeds $1 trillion.

During the lunch, GOP senators voiced discontent over several components of the emerging aid package, whether it involved provisions pushed by the administration and the apparently ballooning size of the plan, according to officials directly familiar with the private gathering. All of the officials spoke on the condition of anonymity to describe the closed-door discussion.

Senate Finance Committee Chairman Chuck Grassley, R-Iowa, argued against the payroll tax cut, making the case that no voters would notice the tax relief and that he was skeptical that the policy changes could even be implemented before October.

Although the payroll tax cut remains a top priority for Trump, his top lieutenants inside the meeting made little apparent effort to sell the policy to Republican senators, who largely remain opposed to the proposal.

Electoral politics were also in consideration. Sen. Tom Cotton, R-Ark., urged other GOP senators to be attentive to what Republicans in competitive reelection bids are hearing on the ground from voters, and he made the case that if the GOP loses the majority, Democrats in control will implement policies that are much more costly to the national debt. So spending a bit more money now in a rescue bill that would aid Republicans in their races would be cheaper in the long run, he argued. Cotton is also up for reelection in November but is not considered to be in a competitive race.

His viewpoint appeared to clash with that of Cruz, who vigorously warned against spending too much money on the package.

Cruz said the GOP should be focused on a safe restart of the economy and warned that if the economy remains shuttered in November, Democrats will win both the White House and the Senate, and that Republican senators, who usually meet in the ornate Mansfield room in the Capitol, will "be meeting in a much smaller lunch room." 

Mnuchin, who met with Republican senators before he was to huddle with the Democratic leaders, stressed to the GOP lawmakers that he will not launch into negotiations Tuesday afternoon with Democrats and that he would be in more of a listening mode with them.

Earlier Tuesday, McConnell gave some details of the emerging GOP plan in remarks on the Senate floor.

He said it would include $105 billion to help schools reopen, another round of funding for the Paycheck Protection Program for small businesses, more stimulus checks to individual Americans, incentives for hiring and retaining workers, and reimbursement for businesses to establish safety measures.

"The American job market needs another shot of adrenaline," McConnell said. "Senate Republicans are laser-focused on getting American workers their jobs back." 

Trump has enacted four laws that provided close to $3 trillion in new tax cuts and spending to try to help the economy and the health-care industry navigate the coronavirus pandemic. The economy remains weak, however, with an unemployment rate of 11.1% and about 20 million people collecting unemployment benefits. Lawmakers are split over what to do next. When he was heading into a meeting with Senate appropriators, Meadows was asked about the highest price tag they could agree to.

"Obviously everybody looks at a trillion-dollar stimulus plan as the goal, but that's going to be up to the senators and the House," Meadows said. "It's going to be a Senate- and House-led process." 

Mnuchin said he would be there to see the talks through, having been through numerous rounds of frantic negotiations in the past.

"We're shooting to get something done by the end of next week," Mnuchin told reporters as he entered his first meeting. "I'll be here for the next two weeks until we get this done."

 

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