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Virus aid negotiations at a standstill as time dwindles

Republicans still discussing plan they aim to release this week; payroll tax break fate unclear

Senate Majority Leader Mitch McConnell leaves the Senate Republican Policy luncheon in the Hart Building on July 21, 2020.
Senate Majority Leader Mitch McConnell leaves the Senate Republican Policy luncheon in the Hart Building on July 21, 2020. (Tom Williams/CQ Roll Call)

Top negotiators from the White House and Capitol Hill worked through differences on a new round of coronavirus relief legislation Tuesday, although it was clear by day’s end that there wasn’t yet agreement even among Republicans on what their opening offer should be.

With less than three weeks before both chambers are scheduled to leave for the August recess, Senate Republicans sought to generate momentum by unveiling some details of their emerging plan Tuesday, including $105 billion to help schools reopen.

In floor remarks outlining the major elements of a GOP proposal that could be unveiled in coming days, Senate Majority Leader Mitch McConnell made no mention of an extension of expanded unemployment benefits or aid to state and local governments — two top Democratic priorities.

An added $600 weekly unemployment benefit is set to expire July 31. Critics say that amount is too high and creates a barrier to hiring. “You’re not likely to see anything like that in the starting place that I’ll lay out in the next couple of days,” McConnell later told reporters.

McConnell also hedged on whether a top priority for President Donald Trump would be included: a deferral of payroll taxes borne by workers to finance Social Security.

“There are some differences of opinion on the question of the payroll tax cut and whether that’s the best way to go. And so we’re still in discussion with the administration on that,” he told reporters.

[Payroll tax cut on menu in coronavirus aid talks, McCarthy says]

At Tuesday’s Senate Republican policy lunch, three senators spoke out against the idea, according to a participant who asked not to be identified in order to speak more candidly about a private meeting.

“I’m not a fan of that,” Senate Majority Whip John Thune, R-S.D., told reporters later, saying he would prefer focusing on tax rebate checks. “If it’s a choice between doing checks and the payroll tax cut, I think it’s pretty clear the checks actually have a more direct benefit to the economy.”

In his earlier floor remarks, McConnell said the package would center on “kids, jobs and health care” in an attempt to find a “middle ground” between another massive rescue effort and a simple economic stimulus measure.

Helping kids, McConnell said, will require spending $105 billion “so that educators have the resources they need to safely reopen.”

That amount would exceed the $70 billion floated by White House Chief of Staff Mark Meadows over the weekend, and it would be more than the $100 billion that House Democrats included in legislation their chamber passed in May.

Sen. Roy Blunt of Missouri, a senior GOP appropriator, said McConnell’s school funding proposal calls for $70 billion for grades K-12, $30 billion for colleges and universities, and $5 billion that governors could use at their discretion for any school.

But Speaker Nancy Pelosi said her party’s own $100 billion school plan is no longer sufficient. “That was two months ago,” the California Democrat said of the House legislation. “We need more.”

She dismissed the GOP’s overall $1 trillion target as “enough for about a third of our bill.” The House passed a nearly $3.5 trillion package in May.

‘Shot of adrenaline’

Calling for a “shot of adrenaline” to the job market, McConnell said the Republican aid package would reimburse businesses for the costs of coronavirus testing, personal protective equipment, cleaning and any remodeling needed to make their workplaces safe amid the COVID-19 pandemic. The reimbursement would likely come in the form of refundable payroll tax credits.

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He also called for another round of direct payments “to help American families keep driving our national comeback.” But he did not specify how broadly such payments would be distributed.

[Fed, Treasury using virus aid funds sparingly: oversight panel]

The $2 trillion March aid package paid out tax rebates of up to $1,200 per adult, with the payment beginning to phase out for annual incomes exceeding about $75,000. McConnell has previously suggested he would like a new round of payments to be targeted toward lower-income people, with a potential income threshold of about $40,000.

Republican leaders face blowback from at least a few conservatives in their caucus who are likely to object to another round of massive spending. “We sent out $1,200 checks to people who didn’t lose their job,” said Sen. Rand Paul, R-Ky. “This is insane. It’s got to stop. We’re ruining the country.”

McConnell also called for renewing the Paycheck Protection Program, which offers forgivable loans to small businesses that keep most of their workers on the payroll during the pandemic. The program’s application deadline was recently extended to Aug. 8, just as the Senate is set to go on recess.

McConnell said the bill would provide for a “targeted second round” of the program, “with a special eye toward hard-hit businesses.”

Much of the fine print has yet to be sorted out, including how to structure a new round of the Paycheck Protection Program, said Sen. Marco Rubio, R-Fla., one of the program’s key architects. With about $100 billion in loan money left unspent, the bill is likely to tap that funding “and probably have to add on top of that,” Rubio said.

The second round of loans would provide “targeted relief to businesses under a certain size,” which could be about 300 employees, and they would have to fall under a certain revenue threshold, Rubio said. The revised program is likely to let businesses use their loans for at least six months, he said.

On health care, the bill will offer “even more resources to the fastest race for a new vaccine in human history, along with diagnostics and testing,” McConnell said. He promised to “protect seniors from a potential spike in premiums” and give more money to hospitals and other health care providers, including for testing.

And in what has been a top priority for the Republican leader for weeks, McConnell again stressed the need for liability protections for health care workers and businesses that want to reopen during the pandemic. “The American people will not see their historic recovery gobbled up by trial lawyers who are itching to follow the pandemic with a second epidemic of frivolous lawsuits,” he said.

Democrats have opposed that push, saying the rights of workers must be protected as they return to their jobs. McConnell said suits could still be filed for “gross negligence” but that a “safe harbor” would be provided for businesses that follow federal health guidelines.

Flurry of meetings

Bipartisan talks began Tuesday, as Meadows and Treasury Secretary Steven Mnuchin spent the day crisscrossing Capitol hallways to consult with both Republicans and Democrats. But they appeared far from any path toward a deal.

“They are not close to getting ready to negotiate,” Senate Minority Leader Charles E. Schumer told reporters after meeting with the White House team. “They weren’t that specific,” he said, adding, “We can’t vote on a vague concept.”

And Pelosi, who attended the same meeting, said Republicans were moving too slowly and could not agree on a proposal. “I think their delay is their disarray,” she said.

Leaving the Capitol late Tuesday, Meadows said he expected legislative text of the Republican proposal to be ready this week. Mnuchin said he planned to brief Trump later Tuesday night on the state of play.

Whenever McConnell introduces his bill, it will likely need some tweaking to win broad support from the Republican conference, Sen. John Cornyn, R-Texas, told reporters. “He’s sort of laying this down as an initial proposal, and I think people are trying to understand it and express their interest,” Cornyn said.

Mary Ellen McIntire contributed to this report.

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