The top four congressional leaders plan to huddle with Treasury Secretary Steven Mnuchin Sunday morning to try to wrap up a massive economic relief package that could approach $2 trillion in new fiscal stimulus to help cope with the COVID-19 pandemic.
Senate Majority Leader Mitch McConnell, R-Ky., said in a statement late Saturday that the handful of committee chairmen involved in the talks had been instructed to finish up their pieces of the package and send him legislative text “this evening.”
He said he wanted to compile the measure for distribution to senators so they’d have a chance to review it before Sunday’s 3 p.m. procedural vote related to whether to take up the underlying legislative vehicle. But Democrats made clear there were still areas of dispute between the parties.
“There is not yet an agreement, and we still have not seen large parts of the Republican draft,” said a spokesman for Senate Minority Leader Charles E. Schumer, D-N.Y. “We look forward to reviewing their first draft and negotiating a bipartisan compromise.”
Senate Finance Chairman Charles E. Grassley earlier said negotiators had resolved one of the biggest sticking points of the talks: a push by Democrats for more generous unemployment insurance benefits.
“We have a good bipartisan agreement on enhanced unemployment compensation,” the Iowa Republican told reporters after a 5 p.m. meeting with McConnell and other GOP senators. “Negotiation isn’t over, but we’re going to have a massive bill that has both Republican and Democrat ideas in it.”
Schumer said he met with Treasury Secretary Steven Mnuchin twice for a total of one and a half hours Saturday. Mnuchin also spoke with Speaker Nancy Pelosi, D-Calif., to discuss the emerging stimulus plan, according to Drew Hammill, Pelosi’s deputy chief of staff.
White House National Economic Council Director Larry Kudlow earlier said the package could contain up to $1.4 trillion in direct cash assistance and loans, but ultimately the Treasury Department and Federal Reserve would be able to pump some $600 billion more worth of credit into the economy through special lending facilities.
But a senior administration official said late Saturday the price tag just of the measures lawmakers were considering was getting close to $2 trillion. Speaking on CNN, Schumer said the figure “may not get that high, but it’s going to be certainly amply more than $1 trillion, $1.4 trillion.”
A $2 trillion package would be equal to more than 9 percent of gross domestic product. By comparison, the 2009 economic stimulus enacted in the throes of the Great Recession was estimated to cost just shy of $800 billion, or around 5 percent of GDP at the time.
The package will include supplemental appropriations needed to help federal agencies respond to the COVID-19 pandemic, according to Senate Appropriations Chairman Richard C. Shelby, R-Ala.
The Trump administration has requested nearly $46 billion in additional funding, but Democrats have described that sum as inadequate as they advocated a World War II-style “Marshall Plan” for the health care industry. The ultimate price tag on supplemental appropriations was expected to be several multiples of that initial White House proposal, according to sources who spoke on condition of anonymity to discuss private talks.
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.
Senate Majority Whip John Thune, R-S.D., said negotiators had mostly wrapped up talks on the structure of tax rebate checks and a $350 billion small business assistance program. But he said the parties still needed to resolve differences on appropriations, particularly on funding for health care facilities.
“There are still final negotiations that are going on, but generally speaking the building blocks of this thing are pretty much in place,” Thune said after the GOP meeting.
While many details appeared unresolved, leaders of both parties and the White House appeared confident late Saturday that a deal was close at hand.
Mnuchin, who has served as the top White House negotiator, declined to discuss details. But he said, “Everybody is working very hard to get this done.”
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. Speaking at a White House briefing Saturday, Vice President Mike Pence said he expected the House would also vote Monday.
‘Unemployment insurance on steroids’
Senate Small Business Chairman Marco Rubio, R-Fla., said the agreement on a $350 billion small business loan program — up from an initial $300 billion — is something “that every member of the Senate should be able to support in terms of its impact.” He said it should sustain small businesses for “six, seven weeks potentially.”
The specifics of the unemployment insurance compromise were not yet clear. Schumer has been pushing for “unemployment insurance on steroids,” which would provide workers the equivalent of their full salary if they lose their jobs during the pandemic and provide an extra 13 weeks of unemployment beyond what states currently offer.
Kudlow said 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.
Sen. Ron Wyden of Oregon, the ranking Democrat on the Finance Committee, 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.
State aid, airlines
White House legislative director Eric Ueland said discussions were still ongoing on issues like a “state stabilization fund” sought by governors to patch leaky budgets, as well as the broader supplemental spending piece to bolster federal agencies’ ability to contain and treat the disease.
Sen. Christopher S. Murphy, D-Conn., tweeted Saturday that Senate Republicans have acceded to Democrats’ demand to include funds to help states and localities meet budget shortfalls due to steep declines in tax receipts. Senate Republicans are “now bending on funds to states. Negotiating on terms, size of funding,” Murphy wrote.
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.”
Paul M. Krawzak, Griffin Connolly, Lauren Clason, Kate Ackley and Niels Lesniewski contributed to this report.