Top Senate and White House negotiators broke up marathon talks on a mega-economic stimulus package late Friday night with a mandate to take some proposals back to their colleagues for further discussion, and will meet again at 10:30 a.m. Saturday.
“I think we made good progress. But both sides now have issues that they have to go back and check,” Senate Finance ranking member Ron Wyden, D-Ore., said late Friday. “We’ve got member calls, we’ve got scoring calls, we got all kinds of calls.”
President Donald Trump’s chief legislative aide, Eric Ueland, told reporters that legislative drafting would “accelerate” on Saturday and the target is to complete the text of the COVID-19 economic response package — which another top White House official said could hit $1.4 trillion — by late afternoon. That would allow senators to review the measure before the first procedural vote on Sunday.
“We’re going to be partnering with Republicans and Democrats as they draft the legislation tomorrow, while we continue to work on finishing and closing the deal because the American people expect a resolution here, as do the markets,” Ueland said. “And we get that.”
Senate Finance Chairman Charles E. Grassley, R-Iowa, said there were “three or four” outstanding hangups, but didn’t want to get into specifics. Issues senators cited throughout the day as nettlesome included unemployment insurance benefits, aid to states, tax rebate checks and other tax issues like breaks for multinational corporations.
“There are still some issues outstanding on the tax and relief to the American people piece” of the package, Ueland said. “There’s been a lot of near-consensus throughout all the working groups on questions of how to address challenges for distressed industries. There are a lot of details that can be addressed potentially tomorrow when it comes to the details of how we deliver aid to the American people.”
National Economic Council Director Larry Kudlow told Fox News’ Sean Hannity earlier Friday evening that he’d spoken with Wyden and that he thinks a bipartisan deal is in the offing.
He said combined with additional credit extended to distressed industry sectors, the measure would “leverage up” to $2 trillion in economic assistance, or roughly 10 percent of gross domestic product. “That is big stuff, and it looks to me like we may be able to get it,” Kudlow said.
Senate Majority Leader Mitch McConnell, R-Ky., earlier had set a midnight target to reach agreement in principle so the legislative drafting could begin. But it became clear as the night wore on that deadline wouldn’t be hit.
The Senate’s top Democrat earlier had said the bipartisan “task forces” were unlikely to meet the midnight deadline. “There’s so much to do. I think tonight is hard,” said Minority Leader Charles E. Schumer, D-N.Y. “There’s still some significant outstanding issues, very significant to our side, that they haven’t agreed to.”
McConnell filed cloture Friday on the underlying legislation, an unrelated tax bill the House passed last year that already became law as part of the fiscal 2020 spending deal. That measure was to become the vehicle for an amended version of the comprehensive stimulus plan Senate Republicans introduced Thursday night. The motion would allow for final votes as early as Monday, as long as objections didn’t drag out debate.
Unemployment insurance, state aid
The earlier bill McConnell unveiled did not have an unemployment insurance component. Senate Democrats have been pushing to increase the typical weekly benefit, extend the 26-week duration by another 13 weeks, eliminate the current waiting period before claimants can get their checks and more. Senators said Trump administration officials told them Friday that there were states that couldn’t handle the changes right now, with jobless claims skyrocketing.
“My concern about the unemployment part of it is really related to whether the state systems can handle the inflow that’s coming,” according to Marco Rubio, R-Fla. “From what I’ve heard multiple states have had systemic crashes because they’re just not built for half the country to be unemployed that quickly or potentially unemployed.”
Ueland said the administration was exploring workarounds on unemployment benefits to try to move in the Democrats’ direction.
“I think we made tremendous progress today on unemployment insurance,” he said late Friday. “We’re not here claiming that there’s an agreement tonight. But we are busy deeply exploring the concept of some unemployment insurance ideas that are on the table.”
Some Republicans say they agree unemployment benefits ought to be beefed up. Lindsey Graham of South Carolina said he thinks jobless individuals who made up to $80,000 should be able to get at least three-fourths of their salaries back while unemployed. But Schumer suggested negotiators need to go even bigger.
“There’s no better way to help those who have lost their jobs through no fault of their own than saying they will get their full salaries while they’re unemployed. And when they’re furloughed their employers will hire them again,” he said.
Any agreement reached in the Senate would have to also get through the Democratic-controlled House. Speaker Nancy Pelosi, D-Calif., has been in regular contact with Schumer and Mnuchin, according to aides. But she sent a “Dear Colleague” letter to House Democrats on Friday evening, calling McConnell’s bill “a nonstarter” as written and listing things that must be in the bill to gain Democratic support.
“Any response package must greatly increase Unemployment Insurance and Medicaid, help small businesses survive, expand paid sick and family leave and put money directly into the hands of those who need it most,” Pelosi said.
Democrats are also pushing for a large supplemental spending package to help federal agencies, health care providers and states cope with the coronavirus. A Senate GOP aide said that side of the aisle was also coming around to that idea, which the White House had earlier wanted kept separate from the stimulus.
Including a supplemental spending component was “essential,” according to the aide, who wasn’t authorized to speak for the record, particularly to help the Veterans Health Administration and Federal Emergency Management Agency.
Democrats are also pushing for a “stabilization fund” to help states and localities meet budget shortfalls due to steep declines in tax receipts stemming from COVID-19’s impact. Ueland and other Republicans Friday pointed out that states have “rainy day funds” totaling some $50 billion overall, but nonetheless Ueland said it was on the table for discussion.
“We have heard that from Democrats. We have certainly heard that from the nation’s governors. But we’re not in a position to make any announcements on that tonight,” he said. “But we are definitely talking about that.”
Rebates for the poor
Kudlow said the emerging bill would likely retain the centerpiece of the earlier Republican stimulus plan, with $3,400 tax rebates for a family of four. But still in play was the structure of the rebate, with Democrats and some Republicans arguing the original version would shortchange low-income workers because they’d receive checks only half the size of households earning more.
Ueland hinted that the final package would address some of the concerns about unequal rebates in the bill. “We are headed in a very good direction to make sure aid flows directly to lower-income Americans,” he said late Friday.
Wyden added that he’d like to see certain corporate tax breaks stripped from the GOP bill, including one provision that would fix a 2017 tax law mistake and help U.S. firms with foreign subsidiaries.
According to records filed with the Senate, companies like Atlanta-based Coca-Cola Co. and the trade association representing hedge funds have been lobbying for standalone legislation, introduced last year by Georgia Rep. John Lewis, a Democrat, and former Sen. Johnny Isakson, R-Ga., to correct the drafting error.
“That is a complete nonstarter for us on our side. Senate Democrats are going to oppose it very strongly and I think the administration will have a very tough time trying to defend that,” said Wyden. He added the provision has “nothing to do with COVID-19” and is “fundamentally unfair.”
David Lerman and Paul M. Krawzak contributed to this report.