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White House, GOP plot next moves on coronavirus relief

More direct payments to households on table; some want to extend unemployment benefits, targeted tax breaks for industry

Senate Republicans began to turn their attention back to COVID-19 relief Tuesday, huddling with Treasury Secretary Steven Mnuchin to discuss when they might begin negotiations with Democrats on another aid package.

Republicans didn’t appear ready to coalesce around any specific set of policies at this point, however, opting to continue to wait for more data.

“We’re talking about a bunch of different ideas that we may need to do in another bill, and we want to take our time and make sure we’re thoughtful,” Mnuchin told reporters after the closed-door lunch meeting. “So whatever we do, it will be much more targeted, much more focused on jobs, bringing back jobs and making sure we take care of our kids.”

Senate Majority Leader Mitch McConnell has said Republicans will assess economic conditions next month and draft legislation then if necessary. The chamber is currently scheduled to be in recess for two weeks starting after the July Fourth holiday.

White House National Economic Council Director Larry Kudlow said earlier Tuesday on Fox Business that the Trump administration would likely want to target another round of direct payments in an upcoming package to “folks who lost their jobs and are most in need.”

The $2 trillion March aid package had by early June distributed tax refunds of up to $1,200 per person to about 159 million individuals, according to the IRS, at a cost of $267 billion.

Kudlow said talks are expected to continue for at least a couple more weeks.

“There will be a healthy discussion after the July Fourth recess about the next move regarding economic policy,” he said. “My hope is we move from rescue to economic growth incentives.”

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The mix of incentives in an eventual aid package remains up in the air.

The White House as well as some Republicans, like Arizona Sen. Martha McSally, are proposing targeted aid for hard-hit industries. McSally, considered one of the most vulnerable Senate Republicans in November, is pitching a $4,000 tax credit for those who take vacations within the United States, which would help the depressed travel and leisure sector.

GOP senators have differing ideas on the issue of direct payments. Some say additional payments should only go to those struggling due to the pandemic; others say the relief should be universal.

Still others say once was enough. Utah Sen. Mitt Romney said after the lunch he isn’t inclined to support another round of direct payments at all.

“No, my preference would be to extend unemployment insurance, but to do that in a more limited way, and a more targeted way,” he said.

If Congress doesn’t take action before the end of July, the $600 increase in unemployment insurance benefits approved in March will expire.

With the ongoing spike in COVID-19 cases throughout the country and calls for some governors to scale back reopening, there’s fresh concern that the economy won’t experience a “V-shaped recovery” as many had hoped.

Instead, unemployment could linger in the double digits through the summer and into the fall, as experts brace for a possible second wave during the next cold and flu season.

That could put pressure on lawmakers from both political parties to reach a compromise on unemployment insurance during the coming month.

House Democrats laid out their legislative goals for the next aid package more than a month ago when they released a $3.5 trillion economic relief and health care package. That bill included nearly $1 trillion to help state and local governments address steep budget shortfalls.

That package, which passed on a 208-199 vote on May 15, had about $435 billion for another round of direct payments to individuals. Democrats proposed that anyone with a taxpayer identification number would be eligible for payments. That move led to criticism from Republicans, who said that would allow undocumented immigrants to receive the payments.

House Democrats’ bill would also provide:

  • $100 billion for a public health fund for hospitals and other health care facilities.
  • $100 billion to help states address long-term school closures.
  • $100 billion in rental assistance for low-income households.
  • $75 billion to help homeowners pay their mortgages, property taxes or utilities.
  • $25 billion to help the Postal Service survive a steep decline in revenue.
  • $10 billion for the Supplemental Nutrition Assistance Program, often known as food stamps.

David Lerman contributed to this report.

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