Gov Beat

Senate Hits a Wall on Trillion-Dollar Coronavirus Package

WASHINGTON, March 20, 2020 — Congress failed to reach an agreement on a bipartisan package after nearly 12 hours of talks. Top Senate Republican and Democratic negotiators, along with top Trump administration officials failed to reach a deal on a massive $1 trillion bill to stimulate the American economy which is being beaten and broken by the ongoing coronavirus crisis.

Senate Majority Leader Mitch McConnell led discussions on Friday, calling for both sides to have a deal – in place by the end of the day so the Senate could vote on the package by Monday. Now talks will go into the weekend. Republicans warned that they would begin drafting their own bills Saturday, even without a bipartisan accord.

Senate Democrats including Minority Leader Chuck Schumer says there are a few issues that they don’t agree with, but he was hopeful a deal could be reached. Sen. Chuck Grassley says there are four issues that have to be worked out. Among the issues creating debate are increased unemployment insurance payments, additional financial assistance for hospitals and health-care providers to treat coronavirus victims, and a proposed “State Stabilization Fund,” which is intended to address billions of dollars in looming revenue shortfalls suffered by state governments during the emergency.

Senate debating most expensive economic stimulus package in history

Democrats are unlikely to push back on any possible rescue bill over concern of potential political fallout.  McConnell’s proposed timetable for finishing work on what is likely to turn out to be the most expensive economic rescue package in American history sets an incredibly ambitious pace. Republicans and White House say there is an urgent need to address the growing public-health emergency, and McConnell is already preparing to take the procedural moves needed to make that happen.

The negotiations began Friday morning in the historic Hart 216 room, where Supreme Court nominations and crucial hearings often are held, and then shifted to the Finance Committee’s offices as four “task forces” and sub-groups met. Treasury Secretary Steven Mnuchin spent the day huddled with senators from both parties as they searched for an agreement. Mnuchin also had multiple phone conversations with Schumer and Speaker Nancy Pelosi (D-Calif.) to try to work through problems in the “Phase 3” package.

The four task forces — which covered distressed industries, small business, financial assistance to individual Americans and health care — took a “pause” in the middle of Friday afternoon while Republicans huddled for a policy lunch and Senate aides rushed to put the proposals into writing.

Economic stimulus package aimed to help American small business and industries

Yet it was clear by early evening that McConnell’s midnight deadline was going to be missed. Both sides said they would begin again early Saturday morning. The high-level talks come a day after Senate Republicans introduced their $1 trillion stimulus package to save the U.S. economy by assisting individuals, small businesses and industries that have been hit hard by the pandemic.

But Senate Democrats argue the GOP proposal overall benefits businesses and industries while not doing enough for average Americans.Schumer, who also spoke to President Donald Trump Friday morning, asked the president to use the Defense Production Act for more medical equipment, including ventilators, according to Schumer’s spokesperson.During a sometimes angry 90-minute press conference at the White House, Trump said he had an “extremely good” conversation with the minority leader and expressed optimism about the “Phase 3” stimulus deal.

Americans would receive $1,200 direct cash payments

“We were working on various elements of the deal, and the Democrats are very much wanting something to happen, and the Republicans likewise are very much wanting something to happen. And I think it will,” Trump said at a daily press briefing of the White House coronavirus task force. He didn’t address the Defense Production Act. Trump added that he also spoke at length with McConnell as well.

Among the key provisions of the Senate GOP plan is direct cash payments to individuals of up to $1,200 and families of up to $2,400, based on income. In addition to direct cash payments, the GOP stimulus plan gives small businesses $300 billion in federally guaranteed loans and $200 billion for loans for industries, including airlines.

The structure of the direct payments has emerged as a concern for some Republican members, in addition to Democrats. Sen. Lindsey Graham (R-S.C.) has panned the idea of direct cash payments broadly, while Sens. Josh Hawley (R-Mo.) and Mitt Romney (R-Utah) are calling for the package to be fixed, after expressing concern that its structure doesn’t sufficiently benefit lower-income Americans. Hawley introduced an amendment Friday to help resolve the issue.

“Our goal is to create an income stream not just a one-time payment,” Graham said Friday. “The problem with direct cash is you’re giving it to the people who have got their salary, they don’t need extra money. There are people without money that need money.”

Senate Republican aides and White House officials are signaling they’re open to making changes during negotiations.

Debate focused on direct cash payments

But Republican leaders also brought in Labor Secretary Eugene Scalia to counter the Democratic call for using the existing state-based unemployment insurance system to dole out money to those in need. Scalia argued in the closed-door sessions that some states’ unemployment systems aren’t capable of handling both an expected tidal wave of new unemployment filings by Americans who just lost their jobs while at the same time gearing up to send out millions of checks.

“The administration has expressed, based on some feedback they’re getting from states, that that would take a very long time,” said Senate Majority Whip John Thune (R-S.C.). “Again, we’re trying to do something that’s quick and gets an infusion of cash out there in a hurry, and the direct payments do that.”

There are also objections being raised to some of the industry specific bailout, as well as numerous business-related tax cuts offered by Senate Republicans. Democrats claim that the GOP bill is not “worker friendly,” and note that one of the provisions floated by Republicans would give a tax break to foreign subsidiaries of U.S. companies. “That is a complete non-starter on our side,” said Sen. Ron Wyden (Ore.), top Democrat on the Finance Committee.

Trump keeping corporations from using fed funds for stock buybacks

And Trump himself said he wanted to make sure there was language in the Senate package preventing corporations from using federal aid for stock buybacks.

“We have some fundamental disagreements on some of the liquidity provisions,” said a Republican senator who spoke on the condition of anonymity. We’re trying to help not because we’re interested in helping business … as much as we’re just trying to help keep the economy moving and keep people employed.”

In addition to Mnuchin, Scalia, and Ueland, administration officials participating Friday include Council of Economic Advisers Chairman Kevin Hassett and National Economic Council Director Larry Kudlow.

“Very good attitude, the children are playing well,” Kudlow said when asked about the tenor of the discussions.

The Republican senators attending the talks are McConnell, Banking Committee Chair Mike Crapo (Idaho), Sen. Pat Toomey (Pa.), Finance Committee Chairman Chuck Grassley (Iowa), Sen. Rob Portman (Ohio), HELP Committee Chairman Lamar Alexander (Tenn.), Aging Committee Chairwoman Susan Collins (Maine), Small Business Committee Chairman Marco Rubio (R-Fla.), Senate Commerce Committee Chairman Roger Wicker (Miss.) and Thune.

Among the Senate Democrats participating are Schumer, Wyden, Commerce Committee Ranking Member Maria Cantwell (Wash.), Minority Whip Dick Durbin (Ill.), Small Business Committee Ranking Member Ben Cardin (Md.), Foreign Relations Committee Ranking Member Bob Menendez (N.J.), Sen. Jeanne Shaheen (N.H.) , Sen. Debbie Stabenow (Mich.) and Sen. Jack Reed (R.I.). HELP Committee Ranking Member Patty Murray participated by phone.

Congress will not leave until they finalize a deal

Lawmakers are trying to move as quickly as they can and are expected to work through the weekend. McConnell has vowed the Senate will not leave Washington until a deal is reached.

“There’s been some good constructive discussions about the issues,” Thune said. “We’re trying to narrow the list of the Democrat asks and the things Republicans want. We want feedback from the bill that we put out there … We have about 12 hours to do it.”

Durbin, for his part, said Democrats “proposed a number of new issues that have not been raised by the Republican plan.” Democrats want hundreds of billions of dollars for hospital and health-care providers that the GOP proposal doesn’t presently include.

Schumer is closely consulting with Pelosi throughout the Senate negotiations. While Schumer is unlikely to agree to any major provision that Pelosi opposes, that doesn’t mean House Democrats can’t include additional initiatives when that chamber takes up the bill.

“At the speaker’s direction, House Majority committee staffs are working through Pelosi’s policy operation to weigh in through Schumer staff on key provisions House Democrats want added to the McConnell proposal,” said a senior Democratic aide.

McConnell, however, has refused to include Pelosi in the negotiations so far, despite pleas from both top Democrats to do so.


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