Senate GOP unveils coronavirus relief package; formal negotiations begin

Sticking points include how to address unemployment benefits as $600 added weekly benefit lapses this week

Sen. Tim Scott, R-S.C., was the driving force behind inclusion of an expanded business meals deduction in GOP proposal. (Bill Clark/CQ Roll Call)
Sen. Tim Scott, R-S.C., was the driving force behind inclusion of an expanded business meals deduction in GOP proposal. (Bill Clark/CQ Roll Call)
Posted July 27, 2020 at 7:15pm

Senate Republicans unveiled their plan Monday for a roughly $1 trillion coronavirus aid package that would provide a less generous extension of unemployment benefits than current law but offer another round of tax rebate checks and expanded employment tax credits.

After days of intensive talks with the Trump administration that delayed a planned release last week, Senate Majority Leader Mitch McConnell outlined legislation that will serve as the GOP’s opening bid in negotiations with Democrats. Leaders are hoping to get a final deal passed by the end of next week, before the scheduled August recess.

“The American people need more help,” McConnell said on the Senate floor in introducing the plan. “They need it to be comprehensive. And they need it to be carefully tailored to this crossroads.”

Major elements of the package include:

Tax rebates. Most Americans would get a second direct cash payment of up to $1,200 per adult, with the amount beginning to phase out when annual incomes exceed about $75,000 for single filers and $150,000 for married couples. It would also provide $500 per dependent of any age.

Unemployment benefits. The current $600 weekly federal benefit is scheduled to expire at the end of this week. Republicans would extend benefits of $200 a week through September. Beginning in October, benefits would be calculated for each jobless worker so that his or her combined state and federal benefits would amount to 70 percent of lost wages. The federal benefit would be capped at $500 a week.

Enhanced hiring and retention payroll tax credits. A refundable tax credit to encourage employers to hire and retain workers during the pandemic would be increased from 50 percent of eligible wages to 65 percent.

Workplace tax credit. Employers would get a payroll tax credit to cover 50 percent of the cost of a worker’s virus protection expenses, such as testing, personal protective equipment and workplace remodeling.

Restaurant deduction. The measure would remove the existing 50 percent limit on tax write-offs for business meals through Dec. 31, something backers like Sen. Tim Scott, R-S.C., say will help save restaurant industry jobs. But notably Senate Finance Chairman Charles E. Grassley, R-Iowa, didn't include it with the main tax title of the package and has said he opposes an expanded meals break.

Appropriations. Federal agencies would get $306 billion in emergency funding, with the biggest single bulk of money — $118.4 billion — going to the Department of Health and Human Services for vaccine research, testing and other medical needs. Schools would get $105 billion to help them safely reopen. The military would get $29.4 billion to meet the pandemic needs of troops — including nearly $8.1 billion to support the "defense industrial base." Farmers and ranchers would get $20 billion in direct payments, and low-income families and housing agencies would get $3.2 billion in rental assistance.

Paycheck Protection Program. Small businesses could apply for a second round of forgivable loans aimed at keeping their workers on the job during the pandemic. About $190 billion would be available for loans, including previously appropriated funds that have yet to be spent. Companies seeking a second loan would be required to have fewer than 300 workers and show a drop in revenue of at least 50 percent.

Liability protection. Employers who open their businesses during the pandemic would be shielded from coronavirus-related medical claims through Oct. 1, 2024, if they make “reasonable efforts” to comply with public health guidelines and don’t engage in “willful misconduct or grossly negligent behavior,” Sen. John Cornyn, R-Texas, said in a statement.

Trust fund "rescues." Congressional “rescue committees” would be appointed to recommend bipartisan plans for shoring up Social Security, Medicare and highway trust funds. Recommendations from the committees would get expedited consideration in the House and Senate.

But even before the package was unveiled, Democrats had denounced it as falling far short of what will be required to cope with a recession triggered by the COVID-19 pandemic. And the criticism grew louder within minutes of the legislation going public.

“Senate Republicans have presented us with a half-hearted, half-baked legislative proposal,” Senate Minority Leader Charles E. Schumer said on the floor. “The Republican plan is weak tea when our problems need a much stronger brew.”

House Democrats in May passed an aid package that would more than triple the size of the GOP’s plan — a chasm that is sure to be difficult to bridge as lawmakers try to reach a deal in coming days. McConnell dubbed the Democratic plan Monday a “multi-trillion-dollar Socialist manifesto.”

Speaker Nancy Pelosi called for Republican leaders and White House officials to meet with Democrats in her office “within a half hour” of the plan’s release to begin working on a bipartisan deal. Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows did just that, heading to Capitol Hill to meet with Pelosi and Schumer Monday evening.

Unemployment divide

But there is every reason to think negotiations will take longer than negotiators want. The two parties appear miles apart on funding needs and several policy matters.

The biggest partisan showdown may come over unemployment benefits. Republicans had wrestled for days over how to extend expanded unemployment benefits that are set to expire at the end of this month. They oppose the current law, which adds a flat $600 per week to state benefits, saying it provides more money than many workers would earn on the job.

The new proposal would offer jobless workers by October a benefit equivalent to 70 percent of their wages. But Democrats said the plan amounts to a 30 percent pay cut and is likely impractical because of the complexity involved in calculating individualized benefits. “The implementation will be a nightmare,” Schumer said.

Democrats also oppose the GOP plan to provide liability protection to employers who could face coronavirus-related medical claims as they operate their businesses during the pandemic. Republicans said they want to avoid “frivolous lawsuits” that could harm the economy, while Democrats said workers must have legal protections if they risk their health to get to their jobs.

And Democrats have sought about $915 billion in aid to state and local governments, saying the money is needed to avoid thousands of furloughs. The GOP plan provides no new money.

Instead, it gives state and local governments more time to use the $150 billion appropriated in March, extending the expiration from this December until 90 days after the end of a state’s fiscal year, or roughly sometime in the fall of next year. And it would let states use the money to cover revenue shortfalls.

FBI headquarters

Some provisions had even Senate Republicans who drafted the package scratching their heads. The appropriations measure includes $1.75 billion for the “design and construction of a Washington, DC headquarters facility for the Federal Bureau of Investigation.” The administration has pushed for a reconstruction of the bureau's Pennsylvania Avenue headquarters, rather than a move to the Maryland or Virginia suburbs as originally proposed.

Democrats have suggested that the president's interest in the Trump Hotel, also on Pennsylvania Avenue, may have influenced the decision to not redevelop the FBI site, potentially as a competing hotel.

Top Senate Republicans were at pains to defend the provision in the coronavirus relief package, which the White House pushed for. "You’ll have to ask them why they insisted that be included," McConnell told reporters.

And as hard as it will be to reach a bipartisan deal, Republicans remain divided over their own proposal. Some of the GOP’s fiscal conservatives oppose additional aid on the scale that Congress is likely to provide. “As it stands now I think it's likely that you'll see a number of Republicans in opposition to this bill and expressing serious concerns,” said Sen. Ted Cruz, R-Texas.

With so many complex issues to sort out, White House officials over the weekend floated the idea of passing the GOP package in piecemeal fashion instead of in one giant bill. Pelosi dismissed that idea, but Meadows, the White House chief of staff, continued to press it.

"There's no reason for her to object to holding up unemployment insurance just because of a personal negotiating preference,” Meadows told reporters Sunday. “And ultimately there's a few things that are extremely critical to address right away, with others having a little bit more runway to address in the coming weeks.”

Doug Sword, Niels Lesniewski, Jennifer Shutt, Lindsey McPherson and Jessica Wehrman contributed to this report.