Negotiations on a massive financial relief package appeared to hit more roadblocks Sunday, potentially derailing hopes of a speedy resolution to contain the economic fallout from the COVID-19 pandemic.
“We’re so far apart,” Speaker Nancy Pelosi, D-Calif., said after leaving an hourlong meeting at the Capitol with other top congressional leaders and Treasury Secretary Steven Mnuchin. In another potential setback, Pelosi said the House would offer its own legislative package even as the Senate works to complete its bill.
“We’ll be introducing our own bill and hopefully it will be compatible with what they discussed on the Senate side,” she said. When asked if her comments meant there was not yet any bipartisan or bicameral deal, Pelosi said, “yes.”
Senate Minority Leader Charles E. Schumer, D-N.Y., was somewhat more circumspect as he left the meeting but confirmed a deal would take more time. “We’re continuing to talk,” he said. “We want to get to an agreement.”
Mnuchin, the Trump administration’s point man for the talks, offered an optimistic assessment in an earlier television interview.
“I think we have a fundamental understanding and we look forward to wrapping it up today,” Mnuchin told “Fox News Sunday” after several days of intensive negotiations at the Capitol.
The package is designed to prop up the economy for the next 10 to 12 weeks as businesses shutter and workers lose jobs in an effort to contain the spread of the coronavirus, Mnuchin said. But if the stimulus measure, which officials said could cost as much as $2 trillion, proves insufficient and the virus hasn’t abated, Mnuchin left open the possibility of another round of relief.
“If this lasts longer, we’ll come back again,” he said.
Senate Majority Leader Mitch McConnell, R-Ky., said the Senate will proceed with its own bill, which he characterized as “a pretty solidly bipartisan proposal.” He also confirmed the 3 p.m. procedural vote on the underlying legislative vehicle will proceed as planned Sunday, even without an agreement.
“Make no mistake, we’ll be voting tomorrow,” McConnell said, referring to a potential final vote, if 60 senators agree to invoke cloture. “The wheel has to stop at some point.”
McConnell acknowledged there is not yet a deal and said there remains room for “elbowing and maneuvering,” between Republicans and Democrats.
“It would be best for the country for the House to take it up and pass it,” McConnell said of the Senate bill, pointing out that the Senate overwhelmingly passed the previous bill the House sent them.
As outlined by Mnuchin, the package includes these key elements:
- Small business retention loans that would give employers two weeks of cash flow coverage to keep workers on the payroll. Sen. Marco Rubio, R-Fla., said Saturday the aid would sustain businesses for six or seven weeks.
- A one-time cash payment to families, with an average check of about $3,000 for a family of four.
- Enhanced unemployment insurance benefits for those who lose jobs as a result of the coronavirus.
- A “broad-based lending program” through the Federal Reserve that would leverage up to $4 trillion in liquidity to help businesses big and small “get through the next 90 to 120 days as we win this war.” New money for hospitals and other medical facilities that could amount to about $110 billion.
But there were still several areas of disagreement as of Sunday morning.
GOP negotiators included language in the bill that said companies needed to retain employees “to the extent possible” — a move Democrats believe will allow corporations to lay off workers and still keep economic assistance funding from the government, according to a person familiar with the bill text.
The legislation includes a two-year limit on executive raises at companies that accept federal money and provides loans instead of grants to airlines — both of which were concerns Sunday morning.
The current draft doesn’t have as much funding for hospitals as Democrats feel is needed, according to a person familiar with the bill.
Democrats are also pushing for the final bill to strengthen restrictions on when and how companies can buy back stock. As of now, the Treasury secretary can waive buyback restrictions, according to a person familiar with the bill.
While some lawmakers have questioned the effectiveness of a one-time cash payment, Mnuchin said it would provide a needed “bridge” for struggling families that would come on top of expanded unemployment insurance and business loans. “I think we’re injecting a lot of liquidity into the system,” he said.
He declined to say whether the country is now in a recession. “I think that’s a technical question that in this situation is not terribly relevant. This is a very unique situation that we’ve never had before,” he said, since the government virtually ordered businesses to shut down to contain a health threat.
Student loan sticking point
Sen. Lindsey Graham, R-S.C., said on Fox News Channel that one of the sticking points is that “Democrats are trying to reduce student loans by $10,000.”
The initial GOP package called for some financial relief to college students hit by the coronavirus by allowing the Education secretary to defer student loan payments for three months without any penalty to the student, and for an additional three months if the secretary deems it necessary.
Democrats put forward a counter-proposal that would direct the Department of Education to make monthly federal student loan payments for borrowers until the national emergency ends. Their plan called for canceling at least $10,000 of debt for federal student borrowers.
“What the hell has that got to do with a virus? I’m sure everybody could use more money, but I don’t want to give money to people that have a paycheck. I want to give money to people who have lost their job,” Graham said Sunday.
Negotiators on Saturday had resolved in principle 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,” Senate Finance Chairman Charles E. Grassley, R-Iowa, told reporters late Saturday. “Negotiation isn’t over, but we’re going to have a massive bill that has both Republican and Democrat ideas in it.”
During his Sunday interview, Graham said the unemployment insurance expansion would allow more substantial payments to those laid off.
“The most you can get in South Carolina is $326 a week. We’re going to dramatically increase that because that’s not enough to live on,” Graham said.
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 (PL 111-5) 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.
Paul M. Krawzak contributed to this report.