Senators worked late into the night Friday in search of a deal on a trillion-dollar stimulus bill to save the economy from collapsing under the ravages of the coronavirus. They finally left the Capitol around 10:30 p.m. reporting progress but with a number of issues still unresolved. They planned to resume talks Saturday morning.
Senate Majority Leader Mitch McConnell (R-Ky.) had hoped to clinch an agreement Friday night in order to ensure a vote Monday on the massive legislation that will allocate enormous sums of money to help individual Americans and businesses large and small that are getting clobbered by the coronavirus crisis. Negotiators now hope they are close enough to finalize an agreement on Saturday.
Agreement appeared near on one major issue -- how to structure direct payments to individuals in a way that would effectively flood the economy with hundreds of billions of dollars in cash. The bill McConnell originally released Thursday drew bipartisan criticism because many people would have gotten one-time payments of $1,200 but the poorest Americans -- those without federal tax liability -- would have gotten as little as $600.
Throughout the day Friday lawmakers of both parties and administration officials voiced objections to that structure, and as the talks broke up late Friday, White House legislative affairs director Eric Ueland told reporters they were near agreement on ensuring that the poorest Americans didn’t get less money.
“I think we are headed in a very good direction to make sure that aid flows directly to lower income Americans as well,” Ueland said.
Overall, Ueland said, “Differences have been narrowed. Ideas and alternatives have been put on the table. Members are directly engaged with each other. And as a result, policy proposals that might ultimately find bipartisan endorsement here in the Senate are clearer tonight than they were this morning.” The legislation’s final price appeared sure to far eclipse $1 trillion.
Remaining unresolved issues included a push by Democrats to add many tens of billions of dollars to unemployment insurance programs, something they have argued is necessary to catch the tidal wave of people bracing for layoffs.
“That is our bottom line. It is our single most important issue,” Sen. Ron Wyden (D-Ore.) told reporters about expanding unemployment. “The administration has raised questions, as you know, about how it would be administered. We have said, well, we think in most states it can be handled.”
Nonetheless, participants sounded hopeful about the progress made on the legislation, which was introduced only Thursday. The process, McConnell has remarked, amounts to “warp speed” for the Senate.
“I’m not optimistic, but I’m not pessimistic at this point. Conversation is positive on a lot of good fronts,” said Sen. Richard J. Durbin (Ill.), the No. 2 Senate Democrat. “There’s still some things that need to be worked out that could be dealbreakers, so it isn’t over.”
As talks intensified, lawmakers and President Trump’s team kept pushing to make the package bigger and more substantial. And even as they worked to scrap limits in the initial GOP bill that would have directed smaller cash payments to lower-income Americans than to others, Trump said the initial disbursement amount was likely to be substantially higher than $1,000.
“We’re not talking about a thousand-dollar check. We’re talking about much more than that,” Trump said Friday. “We’re also talking about doing phases. If this doesn’t work, we’re going to keep doing until we get it going.”
Trump also voiced support for barring any corporations that receive aid from being able to do stock buybacks, or use money to repurchase their stock to drive their equity prices higher, thus enriching shareholders. That issue is not addressed in the bill as initially written, but Trump said he discussed it with Senate Minority Leader Charles E. Schumer (D-N.Y.).
“We talked about, as an example, buybacks, stock buybacks. I don’t want to have stock buybacks,” Trump said. “I want that money to be used for the workers and also for the company to keep the company going, but not for buybacks.”
McConnell and Treasury Secretary Steven Mnuchin hope to see the legislation pass the Senate on Monday, but it remained unclear whether the negotiators could meet the deadline for such a massive bill, which could be the largest economic rescue in history.
The frantic negotiations are taking place as the economic problems in the United States are multiplying. JPMorgan Chase has estimated that the U.S. economy could shrink by 14 percent between April and June, the biggest contraction in the post-World War II era. Goldman Sachs has estimated that 2.25 million people filed for unemployment this week, a nearly tenfold increase from one week ago and the largest number ever recorded.
Underscoring the urgency of the situation as the administration searches for every possible tool to respond, Mnuchin announced Friday that the nation’s tax filing deadline would be pushed back from April 15 to July 15.
Democrats, whose votes will be needed to pass the stimulus legislation in the House and Senate, panned the bill as unveiled by McConnell on Thursday as overly weighted toward industry. But Schumer and House Speaker Nancy Pelosi (D-Calif.) were engaged in talks throughout the day Friday, although Pelosi is at home in California with the House out of session. House members would have to be called back to vote on the bill, a complication unto itself, given the spread of the virus and with two House members already announcing they’ve tested positive for it.
Schumer and Democrats were pushing for expanding unemployment benefits to provide six weeks of pay with 100 percent wage substitution and waive existing delays in securing payments, among changes proposed to make the program more generous. A different coronavirus relief bill signed into law this week already boosted unemployment insurance programs, but Democrats insist they must be further expanded as layoffs cascade throughout the economy, rather than just provide individuals with a one-off check as envisioned in the original Senate GOP bill.
Some Republicans were voicing concerns about the ability of states to administer large-scale increases in the unemployment program, and Labor Secretary Eugene Scalia joined the negotiations Friday to issue a warning on that front. Economists expect a staggering increase in unemployment claims in coming weeks that could potentially shatter records.
Democrats were also pushing for a large state stabilization fund to answer the pleas of governors. Schumer said that that issue, too, remained a sticking point.
“That’s another big issue. That’s a big issue that hasn’t been resolved,” Schumer told reporters late Friday.
Despite their disagreements on policy details, lawmakers in both parties agreed that time was of the essence in the face of the unprecedented economic threat posed by the coronavirus, which has now put much of the nation in lockdown.
“We need to deliver relief now,” McConnell said on the Senate floor. “We need to go big. We need to minimize new complexity. And we need to move swiftly."
As originally proposed, the bill contains an extensive list of proposals aimed at alleviating the economic shock facing small and large businesses, including: delaying corporate taxes; providing zero-interest loans; and paring back the paid family leave plan recently approved by Congress.
The plan includes numerous delays on corporate and business taxes, and would allow the hospitality industry immediately to write off the costs of building improvements, changing a provision in the 2017 tax law. These changes are opposed by many Democrats.
Beyond the general corporate tax changes, the Senate GOP bill also proposes relief for bigger firms and corporations, a move that some critics have alleged could amount to taxpayer-funded bailouts. The bill would not provide direct cash subsidies to these large firms. But it does call for other forms of emergency federal help, such as low-interest loans. The airlines would receive $50 billion of “loans and loan guarantees,” while cargo air carriers would receive $8 billion.
The legislation also calls for creating an additional fund, of $150 billion, to help rescue other industries hurt by the coronavirus downturn. It gives the Treasury Department wide authority in determining which businesses qualify for the fund, which would give the Trump administration significant discretion over a large pool of money — and Senate Republicans are expected to increase the amount beyond $150 billion before the final text is introduced, according to three congressional aides and lobbyists aware of the internal discussions.
The bill’s enormous interventions for small firms appeared to be the portion of the legislation with the most bipartisan agreement. Spearheaded by Sen. Marco Rubio (R-Fla.), the proposal calls for $300 billion of loans to be made available through lenders certified by the Small Business Administration, with the maximum loan capped at $10 million. Unlike the part of the bill for large companies, small businesses could be eligible to have their loans forgiven at a future date if they retain their employees during this period at the same level as before the coronavirus hit.
Rubio told reporters that lawmakers are also looking at loosening the SBA definition of small business — currently an enterprise with a maximum of 500 employees — to ensure that somewhat larger businesses do not miss out on relief.
“Just making sure that we’re not cutting businesses off,” Rubio said, citing the example of a hotel that might have more than 500 employees but predominantly low-wage workers.
The legislation, as originally written by the Senate GOP, would have rolled back parts of the paid sick leave plan recently enacted by Congress and signed into law by Trump. Numerous Republican senators and business groups have complained that the package requires firms to pay an expensive new benefit but does not compensate them with a federal tax cut until they would already be driven out of business. It’s unclear whether Democrats would push back on changes to this area.
Democrats were, however, pushing for a variety of additional restrictions to ensure any corporate aid doesn’t amount to bailouts that help corporate executives at the expense of workers and taxpayers. Some in organized labor were irate over the bill as introduced and demanding changes.
Democrats and Republicans attacked the initial GOP bill design that aimed to limit the direct payments to lower-income households. The legislation would have provided $1,200 per adult and $500 for child, with checks beginning to phase out for those earning more than $75,000. But the poorest families, because they had no federal income tax liability, would have seen smaller benefits, with the minimum set at $600.
“There’s a lot of us who would like to see that changed,” said Sen. Mike Rounds (R-S.D). “They have the same expenses everybody else does. Just because they’re on the lower end of the income scale doesn’t mean they don’t have some basic expenses.”
— Seung Min Kim contributed to this report