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Coronavirus stimulus talks ramp up as White House mulls options

Talks moving rapidly as WHO officially declares COVID-19 a pandemic

Senate Minority Leader Charles E. Schumer speaks at Senate Democrats’ news conference on the coronavirus response Wednesday as, from left, Sens. Ben Cardin, D-Md., Ron Wyden, D-Ore., Patrick Leahy, D-Vt., and Patty Murray, D-Wash., listen.
Senate Minority Leader Charles E. Schumer speaks at Senate Democrats’ news conference on the coronavirus response Wednesday as, from left, Sens. Ben Cardin, D-Md., Ron Wyden, D-Ore., Patrick Leahy, D-Vt., and Patty Murray, D-Wash., listen. (Bill Clark/CQ Roll Call)

The Trump administration is acting independently to ease the economic pain wrought by the coronavirus pandemic, as House Democrats prepare their own bill with initial steps like providing paid sick leave and free medical testing while bipartisan talks take place behind the scenes on a broader package.

“I think it’s important we address the suffering that’s out there,” House Appropriations Chairwoman Nita M. Lowey, D-N.Y., said Wednesday of the not-yet-introduced measure Democrats plan to bring to the floor Thursday. “People who can’t get food, people who are out of work, people whose jobs [are affected] just because no one is going to the restaurants, you don’t even need dish washers and waitresses and waiters.”

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Talks on Capitol Hill were moving rapidly as the World Health Organization officially declared COVID-19 a pandemic, citing its spread across 114 countries, with over 118,000 confirmed cases. Major stock market indexes were having another rough day, with the Dow Jones Industrial Average down over 1,000 points in the early afternoon.

Treasury Secretary Steven Mnuchin said the IRS would likely extend the April 15 tax filing deadline for individuals and small and mid-size businesses, which he told House appropriators at a hearing “will have the impact of putting over $200 billion back into the economy and that will create a very big stimulus.” Added Mnuchin: “We’re not looking to do that for rich people and big corporations.” 

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Mnuchin also said the administration supports measures to provide paid leave and also to “dramatically” increase Small Business Administration lending. The coronavirus supplemental signed into law last week contained funding to support up to $7 billion in SBA loans, but Mnuchin said, “we need more authorization for that program.” House Democrats are likely to include expanded small business lending in their package set to be unveiled as early as Wednesday.

It wasn’t clear how much could get done before next week’s recess, aside from actions the White House can take without congressional approval. Mnuchin met with Speaker Nancy Pelosi, D-Calif., on Tuesday and spoke to her again Wednesday morning to try to plot a bipartisan path forward. But given divisions over tax cuts and other measures, it seems likely that talks on further steps would drag into next week.

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“I just want to be clear: There are certain things that are going to happen, we believe in the next 24 hours, there are certain things that are going to take a week or two,” Mnuchin said Wednesday. 

Payroll tax cut still alive?

President Donald Trump’s push for a massive payroll tax cut remains “on the table” as lawmakers consider an economic stimulus plan in response to the COVID-19 virus, Senate Finance Chairman Charles E. Grassley said Wednesday, although talks with House Democrats were unlikely to produce a deal before next week’s recess.

The White House has been talking about aid to certain industry sectors, such as airlines and cruise lines, but top Democrats indicated those measures may need to wait as well. Pelosi said some elements of the package “may be for the future, but for right now, families first.”

Mnuchin said he planned to meet with cruise line executives Wednesday, and also stressed that aid to airlines would be in the form of loans, not “bailouts.”

Speaking at a separate news conference, Senate Minority Leader Charles E. Schumer of New York said Democrats in that chamber were putting together a package that focused on grants for community economic development and small businesses, public transit agencies and rental assistance for low-income households.

“There are other kind of longer term economic development relief that is far better than a payroll tax cut or relief to two big industries,” Schumer. 

Grassley, R-Iowa, like other top Republicans declined to endorse the White House payroll tax proposal, which calls for possibly eliminating the 6.2 percent Social Security tax on employers and employees or at least scaling it back substantially through the end of the year. Republicans and Democrats alike have said such a step may not be warranted given the potential cost, questions about its effectiveness and the fact that it’s not yet clear a recession is even likely.

“One thing about the payroll tax cut, it does have bipartisan support,” Grassley said, pointing to a 2 percent Social Security payroll tax reduction on workers that was enacted under the Obama administration and covered 2011 and 2012. “It could be triggered in very quickly, but I’m not going to say I favor it because I’m going to make that decision based upon the needs of the economy at that time.  . . .  But it’s on the table.”

One other thing’s certain: Cutting the payroll tax is a “nonstarter” with House Democrats set to roll out their own stimulus proposal later in the day, House Majority Leader Steny H. Hoyer said. “The Republicans have expressed not much enthusiasm for that proposal either.”

Senate Finance ranking member Ron Wyden, D-Ore., went even further, telling reporters the White House tax cut plan would “hit Social Security like a wrecking ball with a massive tax cut for the country’s biggest corporations. We are going to oppose this with everything we have.” 

Democrats’ wish list

House Democrats’ bill is likely to include items Pelosi and Schumer outlined in a list of demands released over the weekend. That list included, among other items, paid leave for sick workers or those forced to stay home by their employers, unemployment benefits, nutrition assistance for the poor, small business loans and free coronavirus-related testing and treatment for those lacking adequate insurance.

Hoyer said some of the benefits may be means-tested so that wealthier earners can’t take advantage of them. He also suggested Democrats may include language intended to prevent the administration from using information obtained through COVID-19 testing for immigration enforcement purposes.

The cost of the measure “will be in the billions, but I don’t want to go beyond that,” Hoyer told reporters, adding that a Congressional Budget Office estimate likely wouldn’t be ready in time for the vote expected Thursday before lawmakers leave Washington for a one-week recess. Added Hoyer: “It will be much more costly if we don’t provide this relief.”

A number of those provisions, including paid leave and nutrition assistance, have bipartisan support, and it was possible the Senate could take up a version after House passage of their not-yet-introduced bill Thursday. Hoyer said the Senate might amend their bill and send it back.

Senate Majority Whip John Thune, R-S.D., said the timing and content of a stimulus package would be largely up to House Democrats and the Trump administration.

“It’s going to have to be negotiated between the White House and House leadership, so it depends a little bit on that. I think at this point those discussions have started, but it’s not going to come together overnight,” Thune said Wednesday. “But, I think there’s an interest on both sides in trying to do whatever is possible to try to limit, mitigate the economic impact and hardships of the virus.” 

Jennifer Shutt, Lindsey McPherson, Katherine Tully-McManus and Jessica Wehrman contributed to this report.

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