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White House, GOP seek stimulus deal by Friday night

McConnell said staff would draft legislative text over the weekend in the hope of holding floor votes Monday

Key senators and White House officials scrambled Friday to produce by nightfall a quick bipartisan agreement on a massive financial rescue package to contain the economic fallout of the COVID-19 pandemic.

Senate Majority Leader Mitch McConnell, R-Ky., said he instructed four task forces to reach a bipartisan deal on various pieces of the stimulus package, expected to total more than $1 trillion, by the end of the day. He said staff would draft legislative text over the weekend with the goal of holding floor votes Monday.

“The need for urgency has been pressed repeatedly by the president and [Treasury Secretary Steven Mnuchin] and we are going to work very hard to be incredibly nimble, quite quick,” said White House Legislative Affairs Director Eric Ueland, who attended the morning negotiating session. Ueland said negotiators’ goal was to produce an agreement in principle by midnight.

To keep momentum rolling, McConnell filed a motion to proceed Friday afternoon on an expected legislative vehicle for the stimulus bill and subsequently filed cloture on the motion to proceed. The procedural maneuver is aimed at ensuring the Senate can be ready to vote on a bipartisan deal as early as Monday.

However, any procedural objections could keep the Senate in session voting on debate-limiting motions through much of next week.

But reaching a deal so quickly on sweeping legislation that could cost $1 trillion or more was shaping up to be a tall order. There were big questions about key provisions like the structure of tax rebate checks, and whether to add a massive supplemental appropriations package for hospitals, education state and local governments, homeless assistance, veterans health care and more.

Just hours after Senate Republicans unveiled their own stimulus plan Thursday, Democratic leaders denounced the measure.

“We are beginning to review Senator McConnell’s proposal and on first reading, it is not at all pro-worker and instead puts corporations way ahead of workers,” Senate Minority Leader Charles E. Schumer, D-N.Y., and Speaker Nancy Pelosi, D-Calif., said in a joint statement Thursday night.

Schumer on Friday morning said the package needs to add more money for hospitals and medical professionals, and drop tax breaks for multinational corporations and new restrictions on paid leave for workers forced to stay home.

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‘Can’t just be thrown together’

Sen. Debbie Stabenow, D-Mich., on Friday cast doubt on Republicans’ timeline for producing a bipartisan package.

“This can’t just be thrown together. This has got to be done in a thoughtful way,” she said. “I think it’s extremely difficult when most of us just received the Republican plan and have not had time to respond or put forth proposals. Moving quickly is not good enough unless it’s the right thing for people.”

It wasn’t even clear how strongly the Trump administration supported the Senate GOP bill, which offers cash payments to families, loans to struggling industries and help for small businesses and hospitals, among other things. 

While the White House supports the “overall scope” of the package, Ueland said, “There are certain details we would like [to] add clarification on and the need for refinement, again, in order to make sure aid gets out to the American people as quickly as possible. And we’ll be working through that over the next several hours.”

Senate and House Democrats say they wanted to see a major supplemental spending package, including what they’re calling a “Marshall Plan” to rebuild hospitals’ capacity to deal with a pandemic, tacked on to the stimulus plan.

The White House earlier this week asked for $46 billion, but early indications point to that number going substantially higher. Senate Appropriations ranking Democrat Patrick J. Leahy of Vermont on Thursday night outlined a number of items his caucus is seeking as part of the stimulus plan; the White House position has been to keep the stimulus and appropriations packages separate, but momentum seems to be moving in the direction of combining the two.

“There’s a serious conversation underway” about a combo package, Ueland said. A GOP senator who declined to be identified to discuss private talks was more blunt, saying the supplemental was likely to be rolled into the stimulus.

Rebate checks in play

One big sticking point that has divided lawmakers across party lines was the size and shape of cash payments that would be sent to families in hopes of stimulating the economy as jobs disappear and businesses shutter.

The centerpiece of the Senate GOP bill would provide direct payments to individuals of about $1,200 per person or $2,400 for married couples filing jointly, with $500 extra per child.

The benefit would begin to phase down above $75,000 in adjusted gross income — or income before standard or itemized deductions and tax credits — for individuals and $150,000 for couples. The income thresholds are based on 2018 tax returns and would phase out at a rate of $5 for each $100 above the line. 

That means a single filer with AGI above $99,000 wouldn’t get a check, while that cutoff is $198,000 for married couples, according to a Senate Finance summary. Lower-income households with little or no tax liability would get $600 to $1,200 if they have at least $2,500 in AGI.

Stabenow said she “couldn’t believe” they’d write a bill that gives less money to the lowest-income Americans. “Those numbers don’t make any sense,” she said.

The 2008 economic stimulus had similar features, intended to ensure the most well-off don’t get a payment. But it’s also intended to ensure households truly get a “rebate” for taxes paid, instead of a check from the government substantially over and above income tax liability, though there is the minimum “refundable” amount for lower-income households.

According to calculations by the American Enterprise Institute’s Kyle Pomerleau, the structure of the rebates means that an individual would have to earn at least $23,000 to get the full $1,200 amount, while joint filers would need to make $47,000 to get the full $2,400. Overall, Pomerleau found, 64 million tax filers earning under $50,000 won’t get the full credit.

Democrats, and even some Republicans, have criticized the payment plan for not sufficiently targeting those who need financial assistance the most. 

“The current bill has promise but it shouldn’t give lower earners smaller checks —that’s directly contrary to my proposal,” Sen. Mitt Romney, R-Utah, tweeted Friday. “We need to fix this to ensure lower earners get equal payments.”

Sen. Josh Hawley, R-Mo., echoed that view, tweeting: “Relief to families in this emergency shouldn’t be regressive. Lower-income families shouldn’t be penalized.”

Ueland wouldn’t comment on specifics, but hinted at changes to come. “We are looking for the swiftest, largest impact to the American economy for the American people,” he said.

While the Trump administration had proposed issuing two checks over a period of weeks, the Senate GOP bill commits to issuing just one, holding the second check as an option if conditions merit. 

Sen. Lindsey Graham, R-S.C., said he’d support a one-time direct payment as a “bridge” to some kind of more regular income stream, particularly for those without jobs. He favors expanding unemployment benefits, which many Democrats have also proposed.

“There’s really no place to spend it. It’s not going to stimulate the economy,” Graham said. Still, he said it was important to get a stimulus plan, which Graham characterized as likely to cost “a hell of a lot more than $1 trillion,” to the president’s desk quickly.

Unemployment insurance

Senators on Friday discussed the possibility of expanding the unemployment insurance system as part of the package, which some lawmakers argue would mitigate the need for future direct payments. But lawmakers on both sides of the aisle said issues were raised about how feasible it would be to ramp up such a program fast enough.

Senate Majority Whip John Thune, R-S.D., said, “there’s real concerns about whether or not that can be done … 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.”

Senate Minority Whip Richard J. Durbin, D-Ill., said the Labor Department told lawmakers several states don’t have the capacity to run an expanded unemployment program that’s already putting a strain on the system. Graham said the South Carolina unemployment office has been “overrun” with applications.

He acknowledged that Mnuchin and other administration officials expressed some concern about the feasibility of expanding unemployment insurance, but that in order to get Democratic buy-in there’d need to be a compromise.

“We as Republicans got to understand there’s going to be an unemployment compensation benefit part of the package,” he said.

But Graham made clear he’d sacrifice a perfect bill for the time being: “The sooner you get the cash, the income flowing, the better it will be because the people a week from now see no hope — you’re gonna have a lot of social unrest.”

Paul M. Krawzak, Katharine Lackey, Katherine Tully-McManus and Niels Lesniewski contributed to this report.

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