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White House, Democrats hung up on coronavirus stimulus

Pelosi says House Democrats ready to bring own bill to the floor Friday even if no deal materializes

Negotiations over a first round of assistance for coronavirus-caused economic pain hit snags Friday as Republicans and Democrats traded offers and tried to bring President Donald Trump on board.

At an afternoon news conference, Trump said the talks with Democratic leaders hadn’t advanced to that point yet. “We just don’t think they’re giving enough,” he said. “They’re not doing what’s right for the country.” 

Speaker Nancy Pelosi, D-Calif., delivered a statement around 2 p.m. suggesting Democrats were ready to bring their own bill to the floor later Friday even if no deal materializes.

She said that “today, we are passing a bill” that’s in line with priorities she expressed last weekend in a joint statement with Senate Minority Leader Charles E. Schumer, D-N.Y., including free testing for COVID-19 and two weeks of paid leave for workers who get sick or need to stay home to care for family members.

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A notice to lawmakers from Majority Leader Steny H. Hoyer, D-Md., preceded Pelosi’s comments, telling colleagues to be ready to vote Friday no matter the outcome.

“If we reach agreement, we’ll vote on it. If not, we will vote today on our bill, which incorporates nearly all of what the Administration and Republicans have requested,” Hoyer wrote.

The president tweeted Friday morning to make another push for his favored payroll tax cut that Democrats have rejected. 

That’s after his own Treasury secretary earlier in the day indicated the administration was ready to back off that proposal, at least for now. Treasury Secretary Steven Mnuchin told CNBC early Friday that “we’re very close to getting this done,” and by late afternoon he’d spoken with Pelosi more than 10 times by phone, according to Pelosi aide Drew Hammill.

Mnuchin added he’d also spoken to the two top GOP leaders Friday morning. He said he spoke to Trump and Vice President Mike Pence, who is leading a coronavirus response task force, “over 10 times yesterday to go through the issues and get direction.”

McCarthy visited Trump at the White House earlier Friday, but wouldn’t comment upon his return to the Capitol.

A senior Democratic aide said the bill the House eventually takes up would include at least some of the changes sought by the Trump administration and congressional Republicans.

Meanwhile, Trump announced he would declare a national emergency under federal disaster aid law in order to tap up to $42.6 billion sitting in Federal Emergency Management Agency coffers. Under the existing Stafford Act, the law has rarely been used by presidents for public health emergencies, according to the Congressional Research Service, most recently in 2016 to help mitigate the water contamination incident in Flint, Michigan.

Trump also said he would waive interest payments on federal student loans until further notice, while buying more oil to restock the Strategic Petroleum Reserve, citing today’s low prices. “This is a good time to fill it up,” Trump said.

Compromise, maybe?
In one version of compromise legislation circulating Friday morning, which aides said wasn’t final, negotiators had removed provisions that would have required the Occupational Safety and Health Administration to develop regulations to protect health care and “frontline” workers from coronavirus exposure. The earlier Democratic bill (HR 6201) would have subjected hospitals and skilled nursing facilities to civil penalties for violations.

The new package also would remove a Social Security Administration emergency leave program that would be permanent and apply to future public health emergencies. The measure also would have mandated employers allow workers to accrue seven days of paid sick leave on top of 14 days of paid sick time off.

The new language circulating would provide for 14 days of paid sick leave as well as additional time if workers are required to stay home on orders of a public health official or a doctor, with the program sunsetting after one year. Employers would also be given substantial tax credits to offset wages paid under the new leave policies.

A $1 billion reimbursement program for diagnostic laboratory test services would also be removed in the draft; Republicans had earlier complained the funding wouldn’t be subject to so-called Hyde amendment protections against federal financing of abortions.

An 8 percentage-point boost in Medicaid matching funds for states, which the left-leaning Center on Budget and Policy Priorities said would inject $45 billion into state coffers, would be whittled down to 6.2 percent. Increased appropriations for COVID-19 testing and services for the military, veterans and Native Americans were also added.

In a letter to Democrats on Thursday night, Pelosi said they had “defeated” an administration effort to limit access to free COVID-19 tests based on income. Mnuchin didn’t address the means-testing issue but said on CNBC that “people who are not insured will be able to get tests” under the emerging legislation.

Payroll tax, paid leave politics
But it wasn’t clear how the payroll tax issue, among others, might stall a bipartisan deal.

Trump as of Thursday afternoon had seemingly agreed to hold off on pushing for it in this round of aid. “That won’t come immediately because that’s a stronger measure, but we are looking to do that and I think at the right time Congress will probably go along with it,” Trump said in remarks to reporters at the top of a meeting with Irish Prime Minister Leo Varadkar.

Mnuchin on Friday for the first time said the administration might be open to an alternative tax measure, given the payroll tax plan has run into static with Democrats. They say it will help higher-income earners and won’t help tipped workers and others who don’t pay significant payroll taxes.

“I think you know the president is working on a major stimulus package, whether it’s through the payroll tax cut or whether it’s through another means of delivering liquidity to hard-working Americans,” Mnuchin said.

Still, Trump made an eleventh-hour pitch for a payroll tax cut Friday morning in a tweet: “If you want to get money into the hands of people quickly & efficiently, let them have the full money that they earned, APPROVE A PAYROLL TAX CUT until the end of the year, December 31. Then you are doing something that is really meaningful. Only that will make a big difference!”

House Republicans held a conference call Friday afternoon to discuss the evolving legislation, during which some members expressed concern that Trump’s payroll tax cut wasn’t included.

But a person familiar with the call, who spoke on condition of anonymity to discuss a private conversation, said the biggest issue continues to be the paid sick time provisions, which are still written as an employer mandate in newer iterations. While tax credits to defray the cost are helpful, many businesses would still suffer because they’d get reimbursed only quarterly for wages paid on their normal schedule.

Mnuchin and Pelosi have both said they are ready to start work on a third legislative package, after the current bill and the earlier $8.3 billion supplemental appropriations law (PL 116-123) to respond to immediate public health needs. Pelosi didn’t specify what would be in it, but she’s said it will include items she and Mnuchin couldn’t agree on this time.

The next package “will take further effective action that protects the health, economic security and well-being of the American people,” Pelosi wrote to lawmakers Thursday night.

Mnuchin stressed that he was committed to helping the airline industry, which is getting hit hard by canceled bookings on a scale that could be akin to the post-9/11 airline crisis.

“I think we view this is as … the second inning of a baseball game,” Mnuchin said. “The speaker’s already come out and said she’s prepared to work with us and the Senate on other issues. We’ll be coming very quickly back on issues dealing with the airline industry.” He said aid for hotels and cruise lines was also under consideration but that airlines “are the next priority on my list.”

Mnuchin also said U.S. Trade Representative Robert Lighthizer was considering limited tariff exemptions for companies that are particularly affected by the virus, but he said there’s no broader reconsideration of Trump’s tariffs on the table “at the moment.”

Niels Lesniewski, Paul M. Krawzak, Lindsey McPherson, Griffin Connolly and Katherine Tully-McManus contributed to this report.                                                                                            

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