Final stretch on COVID-19 economic relief, but no deal yet

Andrew Taylor
Associated Press

Washington – It’s a hurry up and wait moment on Capitol Hill as congressional negotiators on a must-pass, almost $1 trillion COVID-19 economic relief package struggled through a handful of remaining snags on Thursday. The holdups mean a weekend session now appears virtually certain, along with a stopgap spending bill to avert a partial government shutdown at midnight Friday.

All sides appeared hopeful that the wrangling wouldn’t derail the legislation from becoming law. The central elements of a hard-fought compromise appeared in place: more than $300 billion in aid to businesses; a $300-per-week bonus federal jobless benefit and renewal of soon-to-expire state benefits; $600 direct payments to individuals; vaccine distribution funds and money for renters, schools, the Postal Service and people needing food aid.

Senate Majority Leader Mitch McConnell of Ky., speaks during a news conference with other Senate Republicans on Capitol Hill in Washington, Tuesday, Dec. 15, 2020.

The hangups involve an effort by GOP conservatives to curb emergency lending programs by the Treasury Department and Federal Reserve, a Democratic demand to eliminate local government matching requirements for COVID-related disaster grants, and myriad smaller disagreements over non-pandemic add-ons, lawmakers and aides said.

The delays aren’t unusual for legislation of this size and importance, but lawmakers are eager to leave Washington for the holidays and are getting antsy.

“Do we want to lapse into politics as usual and let negotiations lose steam? Do we want to haggle and spar like this was an ordinary political exercise?” asked Senate Majority Leader Mitch McConnell, R-Ky.

The pending bill is the first significant legislative response to the pandemic since the landmark CARES Act passed virtually unanimously in March, delivering $1.8 trillion in aid and more generous $600 per week bonus jobless benefits and $1,200 direct payments to individuals.

The CARES legislation passed at a moment of great uncertainty and unprecedented shutdowns in a failed attempt to stymie the coronavirus, but after that many Republicans focused more on loosening social and economic restrictions as the key to recovery instead of more taxpayer-funded aid.

Now, Republicans are motivated chiefly to extend business subsidies and some jobless benefits, and provide money for schools and vaccines. Democrats have focused on bigger economic stimulus measures and more help for those struggling economically during the pandemic. The urgency was underscored Thursday by the weekly unemployment numbers, which revealed that 885,000 people applied for jobless benefits last week, the highest weekly total since September.

The emerging package falls well short of the $2 trillion-plus Democrats were demanding this fall before the election, but President-elect Joe Biden is eager for an aid package to prop up the economy and help the jobless and hungry. While Biden says more economic stimulus will be needed early next year, some Republicans say the current package may be the last.

“If we address the critical needs right now, and things improve next year as the vaccine gets out there and the economy starts to pick up again, you know, there may be less of a need,” said No. 2 Senate Republican John Thune of South Dakota.

The details were still being worked out, but the measure includes a second round of “paycheck protection” payments to especially hard-hit businesses, $25 billion to help struggling renters with their payments, $45 billion for airlines and transit systems, a temporary 15% or so increase in food stamp benefits, additional farm subsidies, and a $10 billion bailout for the Postal Service.

Some Democrats also mourned the exclusion of a $500 million aid package to help states run their elections. The money was seen as urgent this summer to help states more safely administer their elections in the middle of the pandemic. But with the election over, momentum for the money has gone away.

The emerging package was serving as a magnet for adding on other items, and the two sides continued to swap offers. It was apparent that another temporary spending bill would be needed to prevent a government shutdown. That was likely to pass easily, though possibly not until the last minute.

The emerging package would combine the $900 billion in COVID-19 relief with a $1.4 trillion government-wide funding bill. Then there are numerous unrelated add-ons that are catching a ride, known as “ash and trash” in appropriations panel shorthand.

One leading candidate is an almost 400-page water resources bill that targets $10 billion for 46 Army Corps of Engineers flood control, environmental and coastal protection projects. Another potential addition would extend a batch of soon-to-expire tax breaks, including one for craft brewers, wineries and distillers.

The end-of-session rush also promises relief for victims of shockingly steep surprise medical bills, a phenomenon that often occurs when providers drop out of insurance company networks.

“It’s been very thoroughly vetted,” said retiring Sen. Lamar Alexander, R-Tenn., of the surprise medical billing measure. That measure, combined with an assortment of other health policy provisions, generates savings for federal funding for community health centers.

A key breakthrough occurred earlier this week when Democrats agreed to drop their much-sought $160 billion state and local government aid package in exchange for McConnell abandoning a key priority of his own – a liability shield for businesses and other institutions like universities fearing COVID-19 lawsuits.

The addition of the $600 direct payments came after recent endorsements from both President Donald Trump and progressives like Sen. Bernie Sanders, I-Vt., and Rep. Alexandra Ocasio-Cortez, D-N.Y., along with ambitious GOP Sen. Josh Hawley of Missouri. The idea isn’t very popular in other corners since it’s extremely costly and would give money to millions of people who may not need it, but it has enormous political appeal and proved difficult to stop.