White House officials and the top Senate Republican said late Monday economic aid to households affected by the COVID-19 pandemic is on track despite concerns among the GOP rank-and-file in that chamber about the impact of paid leave requirements on small businesses.
Treasury Secretary Steven Mnuchin said after huddling with senators late Monday that hangups in the House over a package of “technical” fixes to the bill passed by the House early Saturday morning were on the verge of being resolved. Minutes later, Rep. Louie Gohmert, R-Texas — one of 40 Republicans to vote “no” on the bill initially — dropped his objection and the corrections were adopted by unanimous consent.
Gohmert had held out for much of the day’s pro forma House session, arguing he hadn’t seen what the actual fixes were. Finally the changes were revealed, with a 7:38 p.m. time stamp, and by 8:10 p.m. Gohmert was on the floor giving the resolution his blessing, telling the nearly empty chamber “what are being called technical corrections make the bill better than it was when it got passed in the wee hours Saturday morning.”
Now the ball is in Senate Majority Leader McConnell’s court, and the Kentucky Republican said his plan for the House bill is simply to “pass it.” The chamber will also need to adopt the changes to the bill added by the House late Monday.
On that front, there’s some good news for small businesses in the 90-page packet of revisions.
Tax credits intended to defray the costs of the new paid leave requirements would be expanded and apply to health insurance contributions to workers taking time off for illness or to care for children home from school. In addition, the tax credits would offset not just the 6.2 percent Social Security portion of payroll taxes on affected wages, but also the separate 1.45 percent Medicare tax.
And some of the qualifying circumstances are tightened as well, such as limiting guaranteed pay for up to 12 weeks of family leave to those caring for small children.
But it wasn’t clear the changes would be enough to get small businesses and their Senate champions on board without more substantial revisions.
Small businesses began sounding the alarm over the weekend about the paid leave mandate, which exempts firms with more than 500 workers. On Monday a coalition of over 80 business groups, representing hoteliers, retailers and machine tool manufacturers and many more, wrote to Senate leaders asking them to restructure the paid leave provisions.
The requirements “presume liquidity and a tolerance for debt that simply does not exist at this time,” the letter states. The groups added that the cost could force small firms to cut back on health benefits for workers in order to meet the increased payroll.
‘Will not pass the Senate’
The bill as initially drafted by Mnuchin and Speaker Nancy Pelosi, D-Calif., “will not pass the Senate as it is written,” Sen. Tom Cotton, R-Ark., said on “Fox and Friends” Monday.
Despite a commitment by Mnuchin to give firms their tax credits upfront, rather than having to wait to file quarterly estimated taxes, the small business lobby has come out in opposition.
In addition, there’s a concern that the measure’s exemption for larger companies with more than 500 employees — intended to keep tax credits from flowing to big firms already providing paid leave — would still leave millions of workers without pay.
Other GOP senators arguing similar points in recent days include Rick Scott of Florida and Ron Johnson of Wisconsin.
“We’re looking at that in the Senate,” President Donald Trump said Monday of the 500-worker threshold, suggesting the measure would be amended and sent back to the House. “I think they may make it even better.”
One approach on paid leave backed by the business groups is to simply set up a new government program to finance the benefits rather than shelling out upfront and waiting for tax credits to reimburse them. But that would likely entail huge costs, as the letter acknowledges.
It’s not just Republicans criticizing the paid leave provisions. Senate Appropriations ranking Democrat Patrick J. Leahy of Vermont blasted the exemption for larger companies, arguing it would give major retail and restaurant chains a pass.
But he said he’d stand down and support the underlying bill in the interest of time. “This bill was a product of compromise, and any change risks a threat of delay at a time when delay is our greatest enemy,” Leahy said.
Though the paid leave mandate would apply to businesses with 500 or fewer workers, those with less than 50 employees could get hardship waivers through Labor Department regulations. But small businesses argue the process would be too bureaucratic and cumbersome to quickly obtain relief.
The underlying bill, in addition to paid leave would provide free COVID-19 testing for the uninsured, access to school meals for children forced to stay home, extended unemployment insurance, liability protections for manufacturers of face masks and other protective gear and more.
‘It’s a big number’
Mnuchin said he planned to join Senate Republicans for the weekly policy lunch Tuesday to discuss the concerns further. The White House and lawmakers have been discussing a separate, much larger batch of economic assistance to specific industries as well as “general stimulus” for households, which could take the form of tax cuts or direct cash aid.
White House legislative affairs director Eric Ueland said it was possible a bigger package could emerge in the Senate as early as this week. “We’ve got to act fast and the president is very interested in quick action,” he said after meeting with senators.
U.S. airlines asked Congress on Monday for a package worth potentially more than $60 billion in grants, loans and tax relief, which would dwarf the $15 billion package enacted after the 9/11 terrorist attacks. Cruise ships, hotels, movie theaters and others were mentioned as possibly in line for assistance.
“I’m not going to comment on the specific numbers right now,” Mnuchin said late Monday. “But it’s a big number.”
Trump’s $800 billion-plus payroll tax cut is still in the mix, though Mnuchin has said the administration would be open to additional forms of direct tax aid. Sen. Mitt Romney, R-Utah, on Monday embraced a proposal floated by former Obama administration economic adviser Jason Furman earlier this month to send $1,000 checks out to all U.S. adults.
Senate Minority Leader Charles E. Schumer, D-N.Y., said he’d introduce a $750 billion package as early as Tuesday to address hospital capacity issues, expand unemployment insurance and Medicaid funding, fund emergency child care, aid small businesses and more.
Senate Finance Chairman Charles E. Grassley, R-Iowa, the point man for a big chunk of the next aid package, had this to say: “I’m currently looking at what we can do to relieve the strain on workers, the burdens on businesses small and large and the capacity deficits at rural hospitals.”
Not just ‘technical’
Under the original House-passed bill, workers would receive up to 10 days of paid sick leave, though in the case of employees forced out of work to care for sick family members or children in schools that have closed, they’d receive two-thirds the regular rate of pay.
They’d also receive up to 12 weeks of job-protected paid leave, though after the second week pay could drop by one-third at employers’ discretion.
An earlier 87-page “technical” amendment was circulating among lobbyists. Ultimately the tweaks added late Monday largely track the earlier version that hadn’t been able to overcome Gohmert’s objections, other than the newly expanded tax credits to help employers afford the paid leave requirements.
The new language would limit paid family leave to occasions when an employee is unable to work — either onsite or remotely, a change from the earlier bill — due to the need to care for a son or daughter under age 18 if their school or place of care has closed. It also clarifies that paid leave cannot exceed $200 per day or $10,000 total.
In the earlier House bill, the circumstances allowed for paid family leave were broader, including complying with an order or recommendation from a public official, or to care for another family member who has been exposed to the virus or is showing symptoms.
The new paid sick leave language also lays out a narrower list of qualifying circumstances, though it continues to allow sick leave for employees who experience symptoms and are seeking a diagnosis, or are caring for children if their school or place of care is closed.
David Lerman, Katherine Tully-McManus, Graham MacGillivray, Mary Ellen McIntire and Niels Lesniewski contributed to this report.