COVID-19 aid talks got a jolt of momentum Wednesday when the top Democratic leaders on Capitol Hill all but endorsed a $908 billion interim package a bipartisan group of lawmakers unveiled the previous day.
In a joint statement, Speaker Nancy Pelosi and Senate Minority Leader Charles E. Schumer said that “in the spirit of compromise we believe the bipartisan framework introduced yesterday … should be used as the basis for immediate bipartisan, bicameral negotiations.”
Pelosi and Schumer, who have been pushing for a $2 trillion-plus measure, were quick to note that “we and others will offer improvements, but the need to act is immediate and we believe that with good faith negotiations we could come to an agreement.” Specifically, such improvements should include more funding for vaccine distribution and cash-strapped state and local governments, the top Democrats said.
Senate Majority Leader Mitch McConnell wasn’t enthusiastic about the plan released Tuesday by Sens. Joe Manchin III, D-W.Va., Susan Collins, R-Maine and others in both chambers. He unveiled his own $500 billion-plus proposal he said the White House backs, but Democrats quickly panned it as insufficient.
“The president will sign the McConnell proposal that he put forward yesterday. We look forward to making progress on that,” Treasury Secretary Steven Mnuchin told reporters Wednesday.
Still, the developments mark the first real indication of bipartisan movement in months, offering hope that lawmakers can pass some measure of relief for Americans to bridge the gap until coronavirus vaccines are widely available.
“In the last several days, the Democrats’ leaders have signaled a new willingness to engage in good faith,” McConnell said on the Senate floor.
Omnibus talks sputtering?
At the same time, negotiations on a broader package of year-end legislation appeared to be sputtering a bit.
Senate Appropriations Chairman Richard C. Shelby thinks another short-term stopgap funding bill is likely given lingering disagreements on an omnibus package wrapping together $1.4 trillion in unfinished agency budgets for the fiscal year that began Oct. 1.
Negotiators haven’t resolved issues pertaining to border wall funding, immigrant detention beds, policing restrictions and veterans health care, among others. There’s been some discussion of breaking out remaining sticking points and extending those bills in a continuing resolution, and just passing the bills that lawmakers can agree on. But that didn’t seem to be the preferred alternative, at least at this point.
“If we don’t finish it by the ninth and that’s next week, we’ll have to have a short CR,” Shelby said. “I think it’s where we’re headed at the moment.” He added that the length of that stopgap measure was undetermined, but said if history was any guide “we’ll be here several more weeks.”
The current stopgap funding law expires Dec. 11.
Shelby’s comments were substantially more downbeat than those of House Majority Leader Steny H. Hoyer, who told reporters earlier he was “optimistic” negotiators could reach a deal on omnibus appropriations as well as short-term COVID-19 aid as early as this weekend.
Hoyer said he spoke with McConnell on Monday and the Kentucky Republican agrees that timeline would be “optimal” so text can be drafted and the package advanced next week. The two had plans to speak again Wednesday.
“I think we can get this done, agree on the omnibus, agree on the outlines of a COVID-19 bill before the end of this weekend and pass that through the House of Representatives on Thursday,” the Maryland Democrat said. “I think we can do that. I know it’s optimistic. I know it’s fast track, but understand we have been working on this for months and months and months.”
Hoyer said he would like to send House members home no later than Dec. 11 in case they need to quarantine before reintegrating with their families per stricter coronavirus travel guidelines in many states. “If need be they’ll get the time to quarantine before Christmas,” he said.
Appropriators were aiming to reach agreement on the omnibus in time to have bill text ready on Monday, according to a Democratic aide. But leaders are expecting any deal reached on coronavirus relief to hitch a ride on that.
“It’ll all likely come in one package,” McConnell told reporters Tuesday.
Shelby’s Democratic counterpart, Appropriations ranking member Patrick J. Leahy, disagreed on the need for another stopgap. The Vermont Democrat said top appropriators have “worked out almost everything” in the package.
“We’re going to look like foolish, spoiled, children to the rest of the country if we keep punting this thing out,” Leahy said. “Let’s vote it up or vote it down.”
Sen. Shelley Moore Capito, R-W.Va., said the detention beds issue was still in play. The White House says more money is needed to house those crossing the border illegally, even though numbers are down of late; House Democrats want to cut Immigration and Customs Enforcement detention beds by half from current levels.
Capito said that although she agrees with the White House that “you have to plan for surges,” status quo detention capacity was “probably the best path at this point.”
Regarding the Commerce-Justice-Science portion of the package, Sen. Jeanne Shaheen, D-N.H., said Democrats’ push to overhaul police departments and restrict grant funding in some cases was also still unresolved. That was one of the issues over the summer that convinced Shelby to scrap his panel’s markups completely.
Tax extenders, trade ‘corrections’
On Tuesday it had appeared that a push to include a package of tax-break extensions was losing steam due to opposition from House Republicans and some Democrats. But Senate Finance ranking member Ron Wyden, D-Ore., said Wednesday that tax “extenders” may be back on track.
“I thought we made some progress last night, we’ll have to see,” he said.
Wyden also cited expiring health care provisions and a United States-Mexico-Canada trade pact technical corrections package as items that could hitch a ride. But critics say a USMCA fix sought by the U.S. Trade Representative’s office could amount to a $2 billion tariff increase on manufacturers operating in “foreign-trade zones,” which are generally not subject to import duties.
Foreign-trade zones are areas located close to ports of entry where importers can unload, store or sort goods. The fix USTR is seeking would reinstate a provision, repealed in the USMCA implementation law, that required firms operating in foreign-trade zones to pay tariffs on components sourced from countries other than Canada or Mexico.
That vestige of the old North American Free Trade Agreement meant that foreign-trade zone manufacturers couldn’t benefit from the pact’s “rules of origin” making importers eligible for preferential duty treatment if a certain amount of a product’s inputs originated in one of the three North American countries. Reinstating it would put U.S. manufacturers at a disadvantage relative to competitors in Mexico and Canada that don’t face the same restrictions, critics say.
“Supporting such a tax increase during a global pandemic and economic recession would harm American manufacturers across a wide range of industries, including the energy, electronics, automobile, and pharmaceutical sectors, among others,” a bipartisan Senate group wrote in a Dec. 1 letter to U.S. Trade Representative Robert Lighthizer. Signatories include John Cornyn, R-Texas, Ben Sasse, R-Neb., Cindy Hyde-Smith, R-Miss., Jerry Moran, R-Kan., and Delaware Democrats Chris Coons and Thomas R. Carper.
Ellyn Ferguson, Paul Krawzak and David Lerman contributed to this report.