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Senate falls far short of votes needed to advance coronavirus bill, as clash between Republicans and Democrats intensifies

With Democrats opposed, procedural vote fails on $1.8 trillion package in Senate; talks continue, but Pelosi indicates she will move forward on her own

Congress failed on March 22 to pass a procedural vote on a coronavirus stimulus bill that aims to inject close to $1.8 trillion into the economy. (Video: The Washington Post)

Senate Democrats blocked a massive coronavirus stimulus bill from moving forward Sunday as partisan disputes raged over the legislation aimed at arresting the economy’s precipitous decline.

Lawmakers had hoped to pass the enormous $1.8 trillion bill by Monday, but Sunday night they were scrambling to revive talks, with the stock market poised for another sharp drop and households and businesses fretting about an uncertain future.

Negotiations continued even as the initial procedural vote fell short; 47 senators voted in favor and 47 were opposed. The tally was well short of the 60 votes needed to move forward. The number of “aye” votes was especially low because five Republicans are quarantined over coronavirus fears.

Although senators of both parties and Trump administration officials vowed to continue negotiating — around the clock if necessary — the failed vote was the latest negative signal about Congress’s ability to come together around the legislation, which aims to inject close to $1.8 trillion into businesses and households. Policymakers are scrambling to address a spike in layoffs and businesses gasping for assistance as millions of Americans stay home to avoid contagion.

Ever since Majority Leader Mitch McConnell (R-Ky.) introduced the legislation Thursday night, senators have missed one self-imposed deadline after another to reach a deal. The vote Sunday evening was delayed three hours so talks could continue after it became clear it would fail, but no resolution was reached, and it failed anyway. McConnell set another procedural vote for around 12:30 p.m. Monday and dared Democrats to block it.

“Right now, they’re not there,” President Trump said earlier in the day from the White House with the vote underway. “But I think that the Democrats want to get there. And I can tell you for a fact, the Republicans want to get there. And I don’t think anybody actually has a choice.”

Treasury Secretary Steven Mnuchin played shuttle diplomacy all afternoon and night, exiting the Capitol just before midnight after his sixth face-to-face meeting with Senate Minority Leader Charles E. Schumer (D-N.Y.) while expressing optimism. “I think we’re very close. The teams are going to work through the night. We’re going to regroup the principals in the morning,” Mnuchin told reporters.

While Schumer also struck an upbeat tone — saying he was “very hopeful” of a deal Monday morning — McConnell left the Capitol visibly angry and accusing Schumer of blowing up an emerging deal early Sunday.

If the sides do not reach a pact by the early afternoon, votes will unfold that are likely to be a replay of Sunday’s blocked path, except this time the U.S. financial markets will be open and trading.

The bill would seek to flood the economy with money in an effort to protect millions of jobs and businesses that appear to be on the brink. It would direct payments of $1,200 to most American adults and $500 to children. It would steer $350 billion toward small businesses to stem the tide of layoffs and push billions more toward hospitals and the unemployment insurance system. And it would create a massive $500 billion program for businesses, states and localities, with the direction and velocity of this loan program left mostly to the Treasury Department’s discretion. Few aspects of the legislation had any precedent to draw from in terms of their scale and speed.

Indeed, the sheer magnitude of the potential calamity kept lawmakers at the bargaining table as negotiators on both sides said they must deliver to slow the financial landslide that is disrupting millions of businesses and households by the day.

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At the same time, McConnell said it was time for Democrats to “take ‘yes’ for an answer” and accept a bill that he said incorporated many of their ideas. Democrats, though, said McConnell’s bill is tilted too far in favor of corporations and doesn’t include much oversight for $500 billion in loans and guarantees that could go to firms selected by the Treasury Department.

Senate Democrats and Republicans spent Friday and Saturday negotiating over the legislation, with both sides saying they had made progress, until McConnell announced late Saturday he was moving forward on drafting a bill even though there was not yet a final deal. Each side quickly blamed the other for the breakdown.

After the vote failed, McConnell angrily lectured Democrats about the outcome. Republicans had hoped to move forward to final passage of the legislation on Monday, a goal that now looks improbable.

“The notion that we have time to play games here with the American economy and the American people is utterly absurd,” McConnell said. “The American people expect us to act tomorrow, and I want everybody to fully understand if we aren’t able to act tomorrow, it will be because of our colleagues on the other side continuing to dicker when the country expects us to come together.”

Schumer came to the floor a short time later to declare Republicans were the ones behaving unreasonably by trying to advance what he called a partisan bill. Democrats said despite some concessions on the part of Republicans, the GOP bill still had too many flaws and did not do enough to shore up the health-care system and help average Americans.

“Now, let me be clear: The majority leader was well aware of how this vote would go before it happened, but he chose to move forward with it anyway — even though negotiations are continuing, so who’s playing games?” Schumer asked. He then added a hopeful note: “Can we overcome the remaining disagreements in the next 24 hours? Yes. We can, and we should. The nation demands it.”

President Trump said on March 22 that he would be in favor of senators voting remotely after some lawmakers self-quarantined amid coronavirus concerns. (Video: The Washington Post)

A major sticking point is a $500 billion pool of money for loans and loan guarantees that Republicans want to create, which some Democrats are labeling a “slush fund” because the Treasury Department would have broad discretion over who receives the money. There is little precedent for a program with a similar size and scope.

“They’re throwing caution to the wind for average workers and people on Main Street and going balls to the wall for people on Wall Street,” Sen. Joe Manchin III (D-W.Va.) said of Republicans.

Trump himself seemed to acknowledge such concerns on the part of Democrats while insisting he did not want to offer bailouts.

“I don’t want to give a bailout to a company and then have somebody go out and use that money to buy back stock in the company and raise the price and then get a bonus,” Trump said. “So I may be Republican, but I don’t like that. I want them to use the money for the workers.”

The implications for the standoff became more dire as concerns about the economy intensify. Several senators spoke fearfully of the impact on the markets if they fail to reach agreement by Monday morning. Underscoring the spreading dangers, Sen. Rand Paul (R-Ky.) on Sunday became the first senator to announce he had tested positive for covid-19, after working out with fellow lawmakers in the Senate gym only that morning. Not long after, Utah GOP Sens. Mike Lee and Mitt Romney announced they would be going into self-quarantine because of being in contact with Paul; Sens. Cory Gardner (R-Colo.) and Rick Scott (R-Fla.) had self-quarantined earlier after possible brushes with infected individuals.

House Speaker Nancy Pelosi (D-Calif.), meanwhile, suggested House Democrats might chart their own course and release their own bill, which could put the Democratic-led House and the Republican-led Senate on different tracks and delay final agreement on any deal.

“We will be introducing our own bill, and hopefully it will be compatible” with what’s happening on the Senate side, Pelosi said after a late-morning meeting with McConnell, Schumer, House Minority Leader Kevin McCarthy (R-Calif.) and Mnuchin.

The stock market has lost 10,000 points in six weeks, and some analysts believe that more than 3 million people filed for unemployment benefits last week alone. Much of the U.S. economy is frozen as Americans stay home and cut back on spending, fearful about the coronavirus outbreak. The number of confirmed cases in the United States has grown sharply in the past few days and it does not appear to be slowing.

The economic conditions appear to be dramatically worse than first predicted. Federal Reserve Bank of St. Louis President James Bullard told Bloomberg News in an interview Sunday that the unemployment rate could hit 30 percent between April and June because of mass layoffs, which would be worse than what occurred during the Great Depression.

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Senators are racing to thrash out a massive coronavirus spending bill before Congress is forced to shut down. (Video: The Washington Post)

In addition to $500 billion in loans and loan guarantees to businesses, states and cities, the Senate GOP legislation would appropriate $350 billion for small businesses that is meant to help prevent more layoffs. It would also send $1,200 checks to many Americans, bolster the unemployment insurance system and disburse a broad range of emergency funds to help reinforce hospitals and other areas.

The Senate bill would be by far the largest financial rescue ever attempted by Congress, dwarfing legislation passed during the financial crisis of 2008.

Typically, when large pieces of legislation become too contentious, lawmakers will try to scale it back to focus on areas of agreement. That could prove complicated this time because of dire warnings about the size of the economy’s dramatic contraction. The bill includes massive funding streams for both households and businesses, and prioritizing one over the other could cause significant issues in the economy.

For example, the direct payments to households would appropriate $1,200 per qualifying adult and $500 per child at a cost of around $250 billion. The cash disbursements in the new agreement would phase out for people with incomes of $75,000 and above. The legislation also includes about $100 billion for hospitals and about $250 billion to beef up state unemployment insurance programs — both major priorities for Democrats.

But many other parts of the bill are meant to address problems flagged by companies, many of whom have said they will be forced to scale back much of their operations if they don’t receive aid soon.

The biggest subset of this $500 billion fund would be $425 billion in loans and loan guarantees meant to rescue “eligible businesses, states or municipalities.” This part of the bill has attracted particular attention from Democrats, some of whom have alleged it would give the Treasury Department broad sway to direct funds to specific companies that have appealed to the White House. Trump has already talked about how he wants to help the cruise industry and the hotel industry, but dozens of other industries have pleaded for assistance as well. Sen. Elizabeth Warren (D-Mass.) called the bucket of money a “slush fund to boost favored companies and corporate executives — while they continue to pull down huge paychecks and fire their workers."

This section also includes $50 billion for passenger airline companies, $8 billion for cargo air firms and $17 billion for companies deemed critical to U.S. national security. The legislation does not include many restrictions on companies that receive these funds. For example, companies are required to maintain the same employment levels that they had as of March 13 “to the extent practicable,” but it does not define what practicable means.

The bill does appear to prohibit stock buybacks at firms that receive the emergency loans and gives the Treasury Department the opportunity to take equity stakes in the firms so that taxpayers could benefit if a firm regains its financial footing.

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The $350 billion small business program appeared to have broad bipartisan support, but processing this program could be a major logistical challenge because of the potential number of firms that could seek to have government support.

Sen. Marco Rubio (R-Fla.), who chairs the Senate Small Business Committee, said there is a “very strong general agreement” that small businesses will be able to obtain loans up to 250 percent of their one-month payroll. That money, as long as it is used for businesses expenses such as paying workers or providing their benefits, or to cover rent, will be entirely forgiven, Rubio said.

Also sought in the bill is around $100 billion in emergency supplemental appropriations for a variety of public health and other needs, and there also are several tax and health policy changes.

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Mnuchin said the sweeping economic package is designed to last for 10 to 12 weeks, and the administration would revisit whether it would seek additional assistance from Congress.

Democrats have argued that without protections for workers, companies receiving bailout money could fire their employees and pocket the taxpayer assistance, which would undermine the purpose of the federal aid. Republicans have said, though, that the program needs to be up and running immediately to help the economy before it is too late.

The dynamic on Capitol Hill partly results from lingering resentments among Senate Republicans over the last coronavirus relief bill, a $100 billion-plus package enacted last week negotiated between Pelosi and Mnuchin. Many Senate Republicans were unhappy with paid sick leave provisions in that bill but voted for it anyway.

The enormous package being negotiated is Congress’s third coronavirus relief bill. The first one, enacted earlier this month, appropriated $8.3 billion for the public health system, vaccine development and other needs.

Paul Kane contributed to this report

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