House and Senate lawmakers are close to agreement on a $1.4 trillion omnibus spending package for the fiscal year that began Oct. 1 and are planning to file the legislative text on Tuesday, according to sources familiar with the discussions.
If that schedule holds, the House could be ready to vote on the bill as early as Wednesday, though the path of a snowstorm that weather forecasters are anticipating may affect that timing.
Negotiators have reached compromises on some of the thorniest issues including border wall spending, Immigration and Customs Enforcement detention capacity and funding for veterans health care programs. A handful of smaller items sent to congressional leaders remain to be worked out, but a full agreement is close, according to these sources, who spoke on condition of anonymity.
While appropriations subcommittees were going over their sections of the massive package, leadership, White House officials and other congressional committees were still ironing out how to handle coronavirus relief, surprise billing legislation and extensions of expiring tax breaks and health care programs. If agreements are reached in time on those items, they're likely to be rolled into the massive year-end omnibus legislation.
Speaker Nancy Pelosi, D-Calif., spoke with Treasury Secretary Mnuchin on Monday night about the remaining open items on the omnibus, according to Pelosi spokesman Drew Hammill. She urged Mnuchin to push for stronger worker wage protections as part of a bipartisan energy package negotiators are seeking to add, Hammill tweeted, as well as help getting the surprise billing deal done.
Veterans health care
On Friday night, President Donald Trump signed a one-week stopgap measure to buy extra time to wrap up unfinished business. This week's package will likely be the last spending bill Trump signs before leaving office, making it his final chance to secure additional funding for the border wall and other legislative priorities.
One of the final outstanding issues was how to classify funding for “community care programs” that allow veterans to seek health care outside a VA facility in certain circumstances.
House Minority Leader Kevin McCarthy for months has objected to plans to exempt $12.5 billion from the spending caps for this fiscal year. That stance placed him opposite Senate Majority Leader Mitch McConnell, Senate Appropriations Chairman Richard C. Shelby, R-Ala., and Democrats in both chambers. The White House's position has been unclear but in the end appeared to side with McCarthy.
The final bargain, according to people familiar with the discussion, is set to drop the emergency designation for the $12.5 billion. Instead, appropriators are using a mix of budgetary offsets targeting mandatory programs with unused funds — known as "changes in mandatory programs" or CHIMPs — as well as cuts from unspent appropriations to finance the $12.5 billion for veterans health care.
The offsets — which a Democratic source said won't actually result in meaningful spending cuts — will be used to lower the standard subcommittee allocations in several instances while raising the Military Construction-VA panel's allocation to accommodate the higher VA health care budget.
The final disposition of immigrant detention bed capacity and border wall funding wasn't immediately clear. But there was an expectation that the average daily population at ICE facilities would be cut under the tentative agreement in exchange for some wall construction funding. Senate Republicans proposed $2 billion for the wall in line with the Trump request; House Democrats proposed zero, and would go further by rescinding previously appropriated funds.
In addition, negotiators have spent weeks wading through hundreds of differences between the House and Senate spending bills including disputes about when and how federal grants should go to police departments. Protections for the greater sage grouse and language addressing the carbon neutrality of forest biomass were among the other disputes negotiators had to iron out during the final round of talks.
Progress on the omnibus bill was a welcome development for agencies that were starting to wonder whether they'd be operating under a stopgap funding bill though the early part of next year.
The Office of Management and Budget recently delivered a list of "anomalies" agencies would need in a continuing resolution running through March absent a full-year funding agreement.
Needed fixes include extra money to fill a gap in the federal court system's defender services account beginning Jan. 10, 2021, that could result in a hiring freeze, suspension of payment to attorneys or both. Other funding needs shortchanged under a typical stopgap range from money to intercept animal and plant pests carrying diseases before they can enter the U.S. to debt relief for Sudan, OMB said.
Liability language unresolved
A bipartisan group negotiating a $908 billion package of virus aid provisions rolled out two separate proposals at a press conference Monday, after deciding to break out the more contentious $160 billion state and local aid piece along with business liability protections.
Sen. John Cornyn, R-Texas, separately told reporters that congressional leaders are seriously weighing parts of the bipartisan group's proposals for inclusion in the omnibus. "I would think everything except the truly controversial pieces which are state and federal aid and liability reforms" ends up in the package, Cornyn said.
Even within the bipartisan group, Democrats other than Sen. Joe Manchin III of West Virginia were lukewarm about the liability provisions. Rep. Josh Gottheimer, D-N.J., said the group needed "some tweaks on liability and worker protection to get there."
Sen. Angus King, one of the lead negotiators on the liability provisions, didn't seem optimistic that a deal could be reached in time for the year-end bill. "We’re gonna keep working on it but it may be that it has to hold over into January," said King, a Maine independent who caucuses with Democrats.
The proposal would create a steeper legal standard for customers and vendors seeking to sue businesses over COVID-19 exposure, requiring plaintiffs to show “gross negligence,” or reckless disregard for the safety of others.
It would require plaintiffs to plead in their initial filings that they got sick specifically from contact with the defendant’s business rather than being able to rely on evidence revealed at discovery to prove causality. Defendants could get courts to quickly dismiss lawsuits that failed to meet this higher pleading standard.
For nonemployees, the changes make what would have been a difficult lawsuit to win harder. For employees, the proposal makes normally easy-to-win workplace injury claims into long shots. Workers normally only need to prove that they were hurt at the office to win lost wages and medical expenses from the injury; under this proposal, businesses would only be liable if they did not make reasonable efforts to follow applicable public health guidelines.
Republican negotiators touted concessions they made in the talks. Among the changes from an earlier GOP proposal, the new offer would give businesses an affirmative defense if they complied “substantially” with federal statutes, which is stricter than the original’s “generally” standard.
The state and local aid piece would set aside $8 billion for tribal governments. Of the $152 billion for states, 40 percent would be distributed to localities based on population, revenue loss or both, at the discretion of governors. One-third of the state funds would be distributed based on population, and two-thirds based on each states' revenue losses as a share of total state revenue losses.
Despite their stance that state and local aid needs to be part of any coronavirus aid deal, Pelosi and Senate Minority Leader Charles E. Schumer weren't drawing lines in the sand on Monday. "We are in negotiations," Pelosi told reporters. "We think state and local is the right thing to do," Schumer said.
Even if Hill leaders can agree on the bipartisan group's plans, Sen. Bernie Sanders, I-Vt., may still hold up the process. He wants another round of rebate checks similar to those distributed in March added to any coronavirus aid package. Last week Sanders briefly threatened to hold up the one-week stopgap over the matter; he's repeatedly said he won't be as accommodating this week.
"Congress cannot go home for the Christmas holidays until we pass legislation which provides a $1,200 direct payment to working class adults, $2,400 for couples, and a $500 payment to their children," Sanders said in a statement Monday.
Health care, tax extenders, pensions
On the health care front, negotiators worked through the weekend on a bipartisan deal to clamp down on surprise out-of-network medical bills, estimated to generate $16 billion in savings to pay for extensions of funding for community health centers, teaching health centers and other programs expiring Dec. 18.
The tax-writing committees were making progress on an extender package, according to sources familiar with the discussions.
There was discussion among lobbyists who spoke on condition of anonymity that some provisions could receive multiyear extensions, such as excise tax cuts for craft brewers, vintners and distillers and a break preventing U.S. multinationals from being taxed on certain income shifted among offshore subsidiaries. Extensions of credits for wind power production and solar energy property installation were also in the mix, according to these sources.
Meanwhile Senate and House committee leaders formally admitted that discussions on how to shore up failing union pension plans ran out of time. "I am extremely disappointed that the urgency of the moment was not met," House Ways and Means Chairman Richard E. Neal, D-Mass., said in a statement.
Bridget Bowman, Lindsey McPherson, Niels Lesniewski, Jim Saksa and Doug Sword contributed to this report.