Senate GOP starts to unveil coronavirus proposal amid deep discord

Senate GOP starts to unveil coronavirus proposal amid deep discordJuly 23, 2020

Senate Republicans started unveiling pieces of their new coronavirus relief bill on Wednesday, but negotiators remain undecided on several key issues.

Republican leadership briefed Senate GOP aides on the proposed legislation Wednesday afternoon. The Republican initiative is expected to include a temporary flat payment for unemployment insurance for two months, although the exact amount of the federal contribution wasn’t finalized, according to sources on the call. Beefed-up $600 federal unemployment payments begin expiring at the end of this week, a deadline that has spurred GOP leaders into action.

But GOP leaders also didn’t reveal whether their proposal will include a payroll tax cut, a top priority for President Donald Trump. Several GOP sources said the payroll tax cut “was out,” but Majority Leader Mitch McConnell (R-Ky.) declined to confirm that as he walked out the Capitol on Wednesday night.

Another option the Senate Finance Committee is weighing includes the employee retention tax credit from the March CARES Act to incentivize businesses to keep workers, said the sources.

Treasury Secretary Steven Mnuchin, White House chief of staff Mark Meadows and Senate Appropriations Committee Chairman Richard Shelby (R-Ala.) announced a deal Wednesday night on the spending portion of the new package. It will include up to $25 billion to upgrade state-level coronavirus testing capacity, funds that GOP senators have been insisting for days.

“We’ve had three days of meetings, and we’re completely on the same page,” Mnuchin told reporters gathered outside the Appropriations Committee offices in the Capitol. Shelby said the new spending provisions will be unveiled Thursday.

The proposed legislation is expected to call for a new round of direct payments to Americans but with more stringent income restrictions; liability protection for schools and businesses as they begin to reopen; additional Paycheck Protection Program funding for small businesses; $105 billion for schools as they seek to restart operations; and a provision to provide flexibility for the use of state aid.

The cost of the GOP package will likely top $1 trillion in total, which is far short of the $3 trillion measure passed by House Democrats two months ago.

On the payroll tax cut, Senate Republicans had been studying options to limit who could qualify for the reduction or phasing it in, but Trump is pushing for the full cut, said GOP lawmakers involved in the talks.

Senate Republicans were also weighing how to reduce the cost of the federal payment to unemployed workers. One proposal under consideration would tailor unemployment payments to the state the recipient lives in. This is to address complaints that some unemployed workers are getting more than they earned at their previous jobs.

White House officials floated the idea of a temporary extension of the current unemployment benefits, but Senate GOP leaders flatly rejected the idea.

Millions of newly unemployed Americans have been receiving the additional $600 unemployment payment from the federal government, but that boost starts running out at the end of the week. With a federal eviction moratorium also ending, many Americans could be even more severely affected by the economic slowdown.

Democrats have seized on the GOP divisions to blast Trump and the Republicans while pushing the House-passed $3 trillion Heroes Act.

“It’s in the middle of the week, and the Republican Party is so disorganized, chaotic and unprepared that they can barely cobble together a partisan bill in their own conference,” said Senate Minority Leader Chuck Schumer (D-N.Y.). “When Leader McConnell at this crucial moment can’t even mention Covid, it shows what a knot Republicans are tied in.”

Mnuchin and Meadows — along with economic adviser Larry Kudlow — met with the full Senate GOP Conference on Tuesday, and Mnuchin and Meadows also spoke briefly with Schumer and Speaker Nancy Pelosi, though they didn’t begin negotiations.

Coming out of that closed-door session, some Senate Republicans expressed strong opposition to the soon-to-be-released package, including Sens. Rand Paul of Kentucky and Ted Cruz of Texas, among others.

Yet with Trump’s presidency and the Republican majority on the line, McConnell and other Senate leaders are under enormous pressure to offer a proposal. McConnell has termed the GOP effort “a starting line,” knowing he will face challenges from the left and right on the legislation.

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