Senate and White House negotiators reported bipartisan progress on a massive economic aid package to respond to the COVID-19 pandemic, including on one of the chief remaining sticking points: Democrats’ insistence on expanded unemployment insurance.
On the Senate floor Saturday morning, Minority Leader Charles E. Schumer, D-N.Y., said he’d spoken with President Donald Trump, Speaker Nancy Pelosi, D-Calif., and Treasury Secretary Steven Mnuchin “several times” about the evolving package.
“I just had a very good, very detailed phone call” with Mnuchin, Schumer said. “We are making very good progress. I have every expectation this progress will continue throughout the day.”
Rob Portman, R-Ohio, said members of the Finance Committee working on tax and unemployment provisions have been given a 5 p.m. deadline to get a bipartisan package ready. “Try to get all decisions made and write it out by 5,” he said.
Schumer said Democrats were seeking “unemployment insurance on steroids,” or roughly equal pay to what workers were receiving before they were let go, as well as expanded paid sick leave and family leave.
It wasn’t clear if the GOP was willing to go that far. But Eric Ueland, Trump’s top legislative liaison to Capitol Hill, said Republicans pitched what he deemed a compromise unemployment benefits plan to Finance Committee Democrats.
“We think it’s a very positive development in terms of the conversation we’re having on a bipartisan basis,” Ueland said. “It’s something that can make a lot of sense as part of an integrated package of aid to the American people and for the American economy.”
Ueland wouldn’t comment on specifics of the GOP proposal. Nor would National Economic Council Director Larry Kudlow put a dollar figure on how much it would cost. “A significant amount, I’m not at liberty to put it out there yet, it’s actually under discussion right now,” Kudlow said.
Democrats have been seeking a substantial increase in unemployment benefit amounts, which currently vary by state. Claimants can typically receive 26 weeks of benefits, though some states have cut allotments; Democrats want to add an additional 13 weeks on top.
They also want to eliminate the weeklong waiting period between applying for and receiving benefits, and fund state “work sharing” programs that allow employers to reduce hours and have lost wages supplemented by unemployment compensation.
Coming out of an afternoon meeting, Senate Majority Whip John Thune, R-S.D., said he thought major sticking points were getting resolved and negotiators were down to “loose ends.” On unemployment insurance and other issues, Thune said, “the Democrats are getting some of the things they asked for.”
‘Good faith offer’
Bob Menendez, D-N.J., a Finance panel member, didn’t address specifics but said the GOP proposal was moving in the right direction.
“It’s pretty close to what we asked for. But some of the numbers have to be worked out,” Menendez said. “I would say that it’s a pretty good faith offer, but it’s not one we can finally accept. We need to move it a little bit more, but I think we’re very close.”
Added Finance ranking member Ron Wyden, D-Ore.: “I think we made progress yesterday. I think we made more progress today.”
Senate Majority Leader Mitch McConnell, R-Ky., wants text written by late afternoon in order to give senators something to review in advance of Sunday’s vote on cloture on the motion to proceed to the underlying bill. The White House and congressional leaders want the package in good shape in time for Monday’s stock market open.
On the floor Saturday, McConnell said the Senate “will” vote on final passage Monday. The House’s timetable wasn’t yet clear though Pelosi has said she’ll call lawmakers back to Washington when a package is ready to be voted on.
“We absolutely cannot let up now. We need to finish these discussions and move forward,” McConnell said.
Ueland said he considered the unemployment insurance talks to be the key to a bipartisan deal. “Hopefully it is a breakthrough that can provide further accelerant to finishing action here as quickly as possible in order to draft legislation and have that out and available in the Senate by early next week,” he said.
Kudlow said the combined impact of the stimulus package, supplemental appropriations and other actions undertaken by the Treasury and Federal Reserve could inject up to $2 trillion into the U.S. economy, or roughly 10 percent of gross domestic product.
That includes $1.3 trillion to $1.4 trillion in direct aid and loans, Kudlow said, as well as additional emergency Fed lending powers and actions by the Treasury’s Exchange Stabilization Fund, which typically buys and sells foreign currency to maintain stable exchange rates.
Job retention measures
Kudlow added he expects an employer payroll tax holiday to remain in the stimulus bill, which would act as an incentive to avoid near-term job cuts. The initial version Senate Republicans introduced Thursday would waive the 6.2 percent tax on wages up to $137,700 in 2020 through the end of the year, though employers would have to make up half the deferred taxes in 2021 and the rest the following year.
Wyden wouldn’t comment on the payroll tax deferral, but said he’s pushing legislation he introduced with Benjamin L. Cardin, D-Md., to create a job retention tax credit. “It’s one of the things that’s under consideration,” Wyden said between meetings.
The credit would be worth 50 percent of wages up to $7,500 for four months, for businesses with 500 or fewer workers forced to close due to the pandemic or suffering a 25 percent revenue drop over the same period the previous year. In addition, businesses with 50 or fewer employees and up to $1 million in revenue would get a credit worth 30 percent of the previous year’s receipts, up to $75,000.
Meanwhile, Senate Small Business Chairman Marco Rubio, R-Fla., said the size of the small business lending program he’s working on has grown from $300 billion to a “range” around $350 billion, though they were still waiting for cost estimates. “It’s gonna be big,” he said.
“It needs to be big. We’re talking about half the workers in the country” working for firms with fewer than 500 employees, Rubio said.
Ueland said discussions were still ongoing on issues like a “state stabilization fund” sought by governors to patch leaky budgets, as well as a broad supplemental spending piece to bolster federal agencies’ ability to contain and treat the disease.
The health care system, particularly hospitals, has been under extreme strain, lawmakers and industry groups say. Schumer said public health infrastructure needs “a massive infusion of resources” as part of the package.
The American Hospital Association is requesting $100 billion from Congress to sustain operations, including to set up childcare for workers as schools continue to shutter. AHA President Rick Pollack stressed that speed is of the essence.
“The reality is that we are in a war,” he told reporters Saturday.
Meanwhile, the package’s assistance for airlines, totaling $58 billion in collateralized loans and loan guarantees, was running into some turbulence Saturday. The CEOs of 10 major U.S. passenger and cargo carriers as well as the industry trade group sent a letter to negotiators stipulating that unless half of the package was in the form of direct cash grants, layoffs and furloughs would begin.
“The breadth and immediacy of the need to act cannot be overstated. It is urgent and unprecedented,” the airlines’ letter states.
But Thune, one of the lead senators on the airline stabilization package, said he didn’t think direct grants were in the cards.
“The question on grant dollars is something the airlines have raised, but at this point I don’t sense support for it here or with the administration,” he said. “But nothing is done. These issues are still being negotiated.”
David Lerman, Paul M. Krawzak, Lauren Clason, Kate Ackley and Niels Lesniewski contributed to this report.