$908 Bn. COVID Talks Stuck

Update 494 — $908 Bn. COVID Talks Stuck:
McConnell Eyes State/Local Aid, Sees Blue

The promising progress in negotiations on a compromise COVID relief bill has hit a predictable but ironic snag. In a reversal of GOP Federalism 101, Senate Majority Leader Mitch McConnell supports federal COVID assistance but not state and local aid for the same end. The inaction on the Hill since March is beyond insupportable today. But the Senate GOP remains lashed to McConnell’s mast for the sake of corporate liability immunity, of all things — a fight symbolic at best and dangerous at worst. 

State and local funding is necessary for protecting the jobs of firefighters, ambulance workers, teachers, and countless other essential workers, police officers — the blue are collateral damage in the war on “blue state management.” The party of law and order doesn’t seem so interested anymore.  

Below we look at the contents of the bipartisan relief package as well as the current state of play, and as usual, a way around the logjam.

Best,

Dana

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A Bipartisan Bill in the Works? 

Last week, a group of bipartisan members of the House and Senate proposed a $908 billion relief package. This proposal would repurpose $560 billion in unused funding from the CARES Act, so “new” appropriations will be closer to $350 billion. Speaker Pelosi and Minority Leader Schumer endorsed the package and have taken up negotiations of their own. President Trump and President-elect Biden also endorsed the proposal, which lacks legislative language. 

The Trump Administration released its own $916 billion package last night. This proposal includes another round of direct payments but eliminates the federal unemployment relief provisions. In a joint statement, Pelosi and Senate Minority Leader Schumer claimed the bill’s goal was to “obstruct the bipartisan Congressional talks that are underway.” 

Meanwhile, Majority Leader McConnell is still pushing for a “skinny” $500 billion bill but has said he is now open to negotiations. With other GOP Senators supporting the bipartisan bill and President Trump indicating his preference for greater relief, McConnell may yet allow Senate consideration of the bipartisan bill. Once Biden takes office in late January, Democrats will be in a better negotiating position, prompting Republicans to act fast to get a package out now, while the signatory is Trump, not Biden.

With COVID cases surging throughout the nation, pressure is building for Congress to pass additional aid. Vaccine trials are promising, but doses will likely not be available to the public until the spring. With unemployment benefits set to lapse the day after Christmas and only a little over a week left until Congress leaves for the winter, negotiators hope to use the omnibus spending deal as a vehicle for the near $1 trillion relief measure

Contents of the Package

As legislators converge around the $908 billion relief package, the final contours of the measure remain under debate. The least disputed contents of the next relief package are: 

  • Unemployment Benefits: The bipartisan package allocates $180 billion for federal unemployment aid. The money would restore expanded unemployment insurance, providing a $300 weekly benefit in additional jobless aid over the next four months. According to the framework released today, the payments will not be backdated. The $180 billion will also provide around 13 weeks of additional benefits to more than 13 million Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation recipients.
  • PPP: The current proposal includes $300 billion for additional PPP loans, tapping the $138 billion leftover after the program ended in July. While the first round of PPP overwhelmingly prioritized larger businesses with strong banking relationships, the next round will limit eligibility to small businesses with fewer than 300 employees that have sustained at least 30 percent revenue loss during any quarter of 2020. This new round allows qualifying businesses to receive a second PPP loan and includes set-asides for smaller community lenders such as Minority Depository Institutions to ensure that women- and minority-owned businesses are not left out of the program.
  • Relief for Renters: The package includes $25 billion in rental assistance to states and local governments with 90 percent of the funds slated to help cover rental and utility payments. It also extends an eviction moratorium through January. Roughly nine million households were in arrears on rent payments as of November 9, per the US Census Bureau’s Household Pulse Survey (about 18 percent of all renter-occupied units in the country). Without the extension, the government would oversee skyrocketing homelessness, compounding the raging pandemic and economic recession with a housing crisis
  • Odds and Ends: The relief bill contains several other noncontroversial measures including $10 billion in funding for the USPS, $10 billion for broadband, $10 billion for childcare providers, $82 billion in education funding, $13 billion in agricultural assistance, and $15 billion in public health spending (testing, tracing, and vaccine distribution). The bill extends student loan forbearance through April 2021, increases SNAP benefits by 15 percent for four months and contains funds to support transportation infrastructure and workers. 

Sticking Points

Despite the emerging consensus on the four corners of the legislation, Democrats and Republicans remain divided on two of the bill’s provisions: 

  • State and Local Aid: The relief package includes $160 billion in aid for states and localities. Relief will be distributed based on population size, revenue loss, and expenditures, but negotiators have not yet settled on the exact formula. Republicans opposed inclusion of state and local aid during negotiations.
  • Liability Shield: For months, Senate Republicans have insisted on a liability shield for businesses, schools, and hospitals compliant with basic federal health safety guidelines. The bipartisan $908 billion relief proposal included a six-month liability shield that would give states time to develop their own response, but the shield itself amounts to a moratorium on COVID-related lawsuits. While House Majority Leader Steny Hoyer has suggested that the moratorium is palatable, progressive Democrats remain opposed to any liability shield. 

McConnell suggested yesterday that both the liability shield and state/local aid should be cut if a final deal isn’t struck soon. The solution is probably in the opposite course, passing what can be agreed and the agreeable parts of each party’s sine qua nons. 

Outlook & Missing Provisions

Republicans are holding state and local aid hostage to shield companies from endangering their workers and consumers. Many Republicans want to go further than the currently-outlined 6-month moratorium, proposing permanent, federal tort law changes to protect big businesses. If such a proposal is on the table, Democrats may be able to get more than just state and local aid in exchange for liability shields; hazard pay for essential workers, and beefed-up OSHA funding and authority (both of which are currently not in the package) could sweeten the deal for nay-saying progressives. 

But even beyond liability protections, the $908 billion relief bill is far from perfect. There is one particular glaring absence that may deter progressives from voting for the bipartisan bill: cash payments. While the package does provide an extra $300 in extra federal weekly unemployment benefits, it does not include another round of $1,200 in direct payments to Americans like the CARES Act, which costs $300 billion, and Republicans adjusting (in private) to an upcoming Democratic White House are standing in the way. Sen. Sanders and Rep. Ocasio-Cortez said that they would not support the proposal without checks for families. Republican Sen. Hawley has said the same.

Next Year, the Next Round

Whatever the end result for this package, Democrats must keep in mind that this is only a beginning, not an end, for the second major relief effort. Negotiators can and must come back to the table to pass additional aid after the December recess. Millions are struggling, and relief is desperately needed. Democrats should do what they can now while remaining committed to doing what’s needed to fully support workers, families, and businesses through the recovery. 

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