Complicating matters, other Republican lawmakers appeared mortified about the growing size of the spending bill, leading to bickering over which policies to remove and warning that miscalculations could allow Democrats to seize control of the White House and the Senate in November.
“What in the hell are we doing?” Sen. Ted Cruz (R-Tex.), who according to multiple officials was incensed at the push to boost spending levels, asked his colleagues at the lunch with the administration negotiators, according to several people who spoke on the condition of anonymity to discuss the exchange.
The whole process now appears likely to spill into August, something the White House and congressional Democrats had hoped to avoid, because it would mean more than 20 million Americans would lose emergency unemployment benefits when they expire at the end of this month. They have not mapped out a plan for what would happen to these people as the pandemic’s turmoil continues to weigh on the U.S. economy.
Part of the problem stemmed from the White House’s failure to go into the talks with a preset strategy or a list of proposals that they knew GOP lawmakers would rally behind. This miscalculation created immediate problems. Numerous demands the White House had tried to formulate over the weekend were erased within hours.
Treasury Secretary Steven Mnuchin said Monday that the goal was to keep the spending bill around $1 trillion, but by Tuesday he had abandoned that. White House officials also indicated they would no longer push for cuts to testing and the CDC. And after a barrage of criticism of Trump’s tax cut demand, White House officials stopped trying to press the matter.
“I think we’re going to spend what we need to spend, and we’re going to make sure we don’t spend more than that,” Mnuchin said.
Democrats pointed fingers at the Republican infighting and said the White House and GOP leaders were unprepared to handle the country’s mounting economic and health care challenges. House Democrats passed a $3 trillion spending bill in May that would send another round of stimulus checks, provide more money to states and help hospitals, among other things, but the White House has vowed to block it.
“Republicans are in complete disarray,” Senate Minority Leader Charles E. Schumer (D-N.Y.) said. “Totally incompetent. Totally in disarray. Totally at war with one another.”
In an effort to bridge differences, Mnuchin, White House Chief of Staff Mark Meadows and White House National Economic Council Director Larry Kudlow met with Senate Republicans over lunch. But that led to little progress, as Republicans made clear to Mnuchin and Meadows that they were not supportive of Trump’s insistence on a payroll tax cut or curbed funding for coronavirus tests and the CDC.
Republicans do appear to be gravitating toward a proposal on what to do about the expiring unemployment benefits, however. In March, Congress approved an additional $600 weekly benefit through the end of July for unemployed Americans.
Democrats have proposed extending those benefits through January, but the White House and some Republicans now want to cut the extra benefits to about $200 per week. Democrats haven’t agreed to this, however.
Republicans were finding a harder time coming to a consensus on many other issues. Mnuchin on Monday had insisted the payroll tax idea was in the bill, but he didn’t even bring it up during the lunch as the opposition snowballed, two people briefed on the interaction said.
“We haven’t reached a conclusion on anything,” Sen. John Neely Kennedy (R-La.) said when the lunch ended.
Meadows acknowledged the discontent, telling reporters, “Well as you can imagine, any time you have Senate Republicans there, you have a number of different thoughts on what should or should not happen.”
Underlying the confusion surrounding the GOP stimulus package are tensions among Trump administration officials about their priorities.
Trump is being represented on Capitol Hill by Mnuchin and Meadows, a tandem that hasn’t brokered a deal jointly with Congress before. Trump has for months privately worried that Mnuchin, his chief negotiator with Democrats, was giving away too much to House Speaker Nancy Pelosi (D-Calif.), leading conservative lawmakers to push for Meadows to have a more active role in this round of talks. Before joining the White House, Meadows was a congressman and leader of the conservative House Freedom Caucus. Mnuchin, meanwhile, has a background as a banker and a Hollywood producer with few ties to the conservative movement.
On Tuesday, Meadows sat toward the back of the room and deferred to Mnuchin as he led the conversation with the GOP senators, according to two people aware of the meeting who spoke on the condition of anonymity to describe private discussions. Mnuchin discussed the importance of sending another round of stimulus checks and providing more money for the Paycheck Protection Program.
Mnuchin also told reporters it was important for lawmakers to reach an agreement before the supplemental increase in unemployment benefits runs out by the end of this month. Republican lawmakers, including Trump, have consistently bashed that benefit increase because they think it makes it more lucrative for workers to stay home than reenter the labor market, but Mnuchin stressed the importance of providing some financial cushion for the jobless.
“Our objective is to try to get something done before the enhanced unemployment insurance expires. There’s a lot of people who are still out of work,” Mnuchin said. Senate Majority Leader Mitch McConnell (R-Ky.) told reporters, though, that it was very unlikely a deal would be reached by the end of next week, laughing and saying no when asked whether that was possible.
One area the White House appeared to be shifting its position on was whether to include more money for coronavirus testing. Over the weekend, the White House had opposed new money for testing, but Senate Republicans pushed back. On Tuesday, White House spokeswoman Kayleigh McEnany said the administration would seek “targeted” money for testing, saying that “we’re willing to put in money for targeted testing that makes sense, not just dumping money into a pot that contains $10 billion.”
These programs are just one part of what the administration and McConnell had envisioned as a $1 trillion package that is likely to be the last major coronavirus relief bill before the election. But the price tag appeared to be growing.
Republicans have spent much of the past several days clashing over how to handle Trump’s demand for a payroll tax cut plan. Mnuchin and Meadows were met with so much blowback to the idea at the Senate GOP lunch Tuesday that Mnuchin didn’t try to persuade anyone to reconsider, several attendees said.
He was also confronted by multiple complaints about the size of the emerging package, with some lawmakers who had voted for the $2 trillion Cares Act in March saying they couldn’t support the new package if it were to exceed $1 trillion.
Senate Finance Committee Chairman Charles E. Grassley (R-Iowa) argued against the payroll tax cut, making the case that no voters would notice the tax relief and that he was skeptical that the policy changes could even be implemented before October.
Electoral politics were also in consideration at the lunch. Sen. Tom Cotton (R-Ark.) urged other GOP senators to be attentive to what Republicans in competitive reelection bids are hearing on the ground from voters, and he made the case that if the GOP loses the majority, Democrats in control will implement policies that are much more costly to the national debt. So spending a bit more money now in a rescue bill that would aid Republicans in their races would be cheaper in the long run, he argued. Cotton is also up for reelection in November but is not considered to be in a competitive race.
Cotton’s viewpoint appeared to clash with that of Cruz, who vigorously warned against spending too much money in the package and said it could lead to a revolt among conservative voters in November.
Cruz said the GOP should be focused on a safe restart of the economy. He said if the economy remains shuttered in November, Democrats will win both the White House and the Senate and that Republican senators, who usually meet in the ornate Mansfield Room in the Capitol, will “be meeting in a much smaller lunchroom” next year.
McConnell did provide some details of what he hoped would be an eventual GOP package. He said it would include $105 billion to help schools reopen, another round of funding for the Paycheck Protection Program for small businesses, more stimulus checks to individual Americans, incentives for hiring and retaining workers, and reimbursement for businesses to establish safety measures.
“The American job market needs another shot of adrenaline,” McConnell said. “Senate Republicans are laser-focused on getting American workers their jobs back.”
Trump has already enacted four laws that provided close to $3 trillion in new tax cuts and spending to try to help the economy and health-care system navigate the coronavirus pandemic. The economy remains weak, however, with an unemployment rate of 11.1 percent and millions of people collecting unemployment benefits. Lawmakers are split over what to do next. When he was heading into a meeting with Senate appropriators, Meadows was asked about the highest price tag they could agree to.
“Obviously everybody looks at a trillion-dollar stimulus plan as the goal, but that’s going to be up to the senators and the House,” Meadows said. “It’s going to be a Senate- and House-led process.”