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Congressional leaders hardened their battle lines on additional fiscal stimulus on Sept. 8, with House Speaker Nancy Pelosi labeling Republican Senate Majority Leader Mitch McConnell’s proposal for a slimmed-down package “fraudulent.”
The Republican bill, expected to feature some of the aspects of a $1 trillion proposal they put forth a month ago, is expected to cost $500 billion to $700 billion. That’s a far cry from the $2.2 trillion relief that Democrats want.
“The Senate Republican majority is introducing a new targeted proposal, focused on some of the very most urgent health-care, education and economic issues,” McConnell said in a statement. “I will be moving immediately today to set up a floor vote as soon as this week.”
Pelosi said in an interview with Bloomberg Television that McConnell’s proposal “isn’t even an attempt to do the right thing.” She said “we have tens of millions of people who are unemployed in this country,” and that requires sufficient stimulus.
Pelosi and Senate Democratic leader Chuck Schumer said in a joint statement earlier Sept. 8 that the Republican bill is a “check-the-box” effort to give endangered incumbents cover in the November election. Democrats can block the bill from debate on the Senate floor because it needs the support of 60 members to advance under filibuster rules.
Even so, White House Chief of Staff Mark Meadows, who has talked with moderate Democrats in recent weeks, said Sept. 8 he is optimistic that public pressure would push lawmakers into a compromise in the coming two weeks. He said the smaller package could serve as a “foundation” for further COVID-19 relief.
“There is a groundswell of support among rank-and-file Democrats and Republicans to suggest that there is some kind of compromise,” Meadows said in an interview with Fox Business.
A senior Republican aide said last week the pared-back bill will likely provide a $300-per-week unemployment benefit enhancement, $105 billion for schools, a $10 billion grant to the U.S. Postal Service, funding for the Paycheck Protection Program for small businesses, $45 billion to the Department of Health and Human Services for vaccines and testing needs, and liability protections for employers.
It won’t include another round of $1,200 checks to individuals — something that President Donald Trump wants — or any aid to state and local governments, a key demand of Democrats.
“The stumbling block is aid to state and local governments,” Meadows said Sept. 8, reiterating his opposition to the Democrats’ proposal for almost $1 trillion in aid for regional authorities that have seen their revenue devastated by the COVID-19 crisis.
McConnell tried and failed for weeks to get most of the Senate’s 53 Republicans on board with the broader $1 trillion plan in the face of opposition from deficit hawks concerned about adding to this year’s $3.3 trillion budget deficit. He’s previously said that as many 20 Senate Republicans were against any additional spending.
Sen. Deb Fischer of Nebraska told reporters Sept. 4 that Republicans have had daily conference calls with Meadows and Treasury Secretary Steven Mnuchin.
“We’ll see if we’re able to get something put together,” she said of a new stimulus proposal. Asked whether Republicans will all agree, she said, “I don’t speak for my colleagues.”
The White House and congressional Democrats have been more than $1 trillion apart on the stimulus since negotiations broke off Aug. 7. Democrats lowered their demand from $3.4 trillion to $2.2 trillion but haven’t budged beyond that.
The looming election will create pressure points for Trump as well as for incumbents in the House and Senate. The White House is pushing for stimulus payments for individuals to go out before the Nov. 3 election.
“Nobody wants to give direct payments to American families more than President Donald Trump,” Vice President Mike Pence said on CNBC Sept. 4.
Immediately before their August break, two Senate Republicans trailing their Democratic challengers in polls — Susan Collins of Maine and Martha McSally of Arizona — helped introduce a bill that has a higher unemployment benefit enhancement than the one in the scaled-down proposal.
In the House, Democrats from swing districts are poised to increase pressure on Pelosi to get a deal. The moderate Blue Dog Coalition sent Pelosi a letter on Aug. 21 urging compromise, and vulnerable first-term Iowa Democrat Cindy Axne followed up last week with a letter demanding action on a smaller package.
The monthly jobs report released Sept. 4 by the Labor Department, which showed the nation’s unemployment rate fell by almost 2 percentage points in August to 8.4%, also eased some pressure on Republicans to move closer to the Democrats’ plan.
Still, it didn’t fully erase concerns about the economy. Payrolls remain about 11.5 million below the prepandemic level, and the number of permanent job losers rose from last month by more than half a million to 3.41 million. A host of companies, from airlines to casinos to the beverage sector, have announced plans to cut workers that were initially furloughed.
Meantime, the two parties will this month have to negotiate a stopgap spending measure to prevent a government shutdown when the fiscal year ends on Sept. 30. Pelosi and Mnuchin have agreed they don’t want the stimulus impasse to hinder work on the stopgap.
A key decision is the timetable for a temporary government spending resolution.
Mnuchin said Sept. 6 his expectation is that a stopgap deal would run through the beginning of December, although specifics have not been ironed out.
“The most important thing is to make sure at the end of the month, we don’t shut down the government and we get something past the election.”
But some Democrats are pushing for a stopgap into early 2021, to avoid the possibility of having to negotiate with a lame-duck president if Trump loses.
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“Frankly, shutting down the government in November and December is a far more acceptable risk for them — if the scenario is they lose the White House and Senate majority in January,” Democratic Rep. Gerry Connolly of Virginia said of Republicans.
Connolly said Democrats lost leverage by agreeing to keep the stopgap bill and stimulus talks separate.
Connecticut Democratic Rep. Jim Himes said he thinks Trump ultimately will push to get a deal done later in the month if he’s still trailing Democratic presidential nominee Joe Biden in polls.
“The president of the United States understands one thing and perhaps one thing only, and that is what is good for him personally,” he said. “And it is good for him personally to get some kind of a deal done.”
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