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Democrats and White House Race to Strike Deal for Coronavirus Relief Package Democrats and White House Race to Strike Deal for Coronavirus Relief Package
(about 3 hours later)
WASHINGTON — The White House and Democrats rushed on Wednesday to reach agreement on emergency legislation to provide a first tranche of economic assistance to help Americans cope with the fast-moving coronavirus pandemic, with the hope of sending it to President Trump for his signature by the end of the week.WASHINGTON — The White House and Democrats rushed on Wednesday to reach agreement on emergency legislation to provide a first tranche of economic assistance to help Americans cope with the fast-moving coronavirus pandemic, with the hope of sending it to President Trump for his signature by the end of the week.
With the White House and Democrats divided over what a broader economic stimulus package should look like, the two parties were trying to coalesce around the idea of a narrower short-term bill focusing on paid leave, enhanced unemployment insurance, food assistance and help for small businesses. That would defer what is likely to be a much more contentious discussion over other economic measures, such as tax cuts and rescue plans for affected industries, until after Congress returns from a weeklong recess. As the White House and Democrats were divided over what a broader economic stimulus package should look like, the two parties were trying to coalesce around the idea of a narrower short-term bill, while deferring discussion over other economic measures until after Congress returns from a weeklong recess. The bill would focus on paid leave, enhanced unemployment insurance, food assistance and help for small businesses.
Treasury Secretary Steven Mnuchin, testifying on Capitol Hill, said he had been in “round the clock” discussions with Speaker Nancy Pelosi, Democrat of California, and Senator Mitch McConnell, Republican of Kentucky and the majority leader, and hoped to reach agreement within 48 hours on a relief package. By nighttime, though, there was still no deal, and House Democrats were pushing ahead with their own emergency relief package they were calling the “Families First Coronavirus Response Act.” They expect to bring it to the floor for a vote on Thursday before they leave Washington for a scheduled break.
“This is a little bit like a hurricane, and we need to cover these outside of normal expenses,” Mr. Mnuchin said. The bill will include free coronavirus testing, paid emergency leave for workers, food security assistance, help to states overburdened by Medicaid costs and strengthened unemployment insurance, according to a joint statement issued Wednesday night by Speaker Nancy Pelosi and Senator Chuck Schumer, the minority leader.
In the Capitol, both Democrats and Republicans clearly felt a sense of urgency as lawmakers plan to leave Washington on Thursday. Representative Steny H. Hoyer of Maryland, the No. 2 Democrat, said the House would vote Thursday on its plan, which includes enhanced unemployment insurance, a sweeping national paid sick leave program and food assistance, according to a summary circulated by leaders on Wednesday. In a prime-time address to the nation Wednesday night, Mr. Trump embraced some of the ideas Democrats have proposed. He called on Congress to provide emergency help for those who must stay home because they are ill, quarantined or caring for others, and asked for $50 billion for low-interest loans to help small businesses overcome the economic disruption wrought by the virus.
Should the White House agree to the package, Mr. McConnell would most likely bring it up for an immediate vote on the Senate floor, according to people familiar with his thinking who were not authorized to comment, clearing a path for Mr. Trump to quickly sign the legislation into law. “This is not a financial crisis. This is just a temporary moment of time that we will overcome together as a nation and as a world,” the president said, though he added that his administration would “provide extra support for American workers, families and businesses.”
But it was not at all clear that the White House would agree to the measure, whose details — including the question of how much it would cost — remained up in the air. Ms. Pelosi and Mr. Mnuchin spoke twice by phone on Wednesday but had not reached a deal by the evening, as House leaders planned to work through the night to complete their legislation. But Mr. Trump also called on Congress to “provide Americans with immediate payroll tax relief” — an idea that has fallen flat on Capitol Hill, where members of both parties have expressed opposition to the president’s proposal to suspend the tax entirely through the end of the year, a measure whose cost is estimated at $800 billion or more.
As the bipartisan talks unfolded behind the scenes, Capitol Hill officials were grappling with how to contain the spread of the virus, informing congressional leaders on Wednesday that they would suspend public tours of the Capitol starting Friday until at least the end of the month. Democrats reacted coolly.
Earlier in the day, Senate Democrats released their own plan for an economic rescue package. Senator Chuck Schumer of New York, the Democratic leader, told reporters that Congress must focus first on the needs of those most affected by the virus, and think about an economic stimulus package later. “We have a public health crisis in this country and the best way to help keep the American people safe and ensure their economic security is for the president to focus on fighting the spread of the coronavirus itself,” Ms. Pelosi and Mr. Schumer said in their statement. “Alarmingly, the president did not say how the administration will address the lack of coronavirus testing kits throughout the United States.”
Likewise, Mr. Mnuchin said he expected to return to Congress later to ask for a larger economic stimulus package made up of items that will take longer to draw the necessary support — including Mr. Trump’s proposal to temporarily suspend payroll taxes, which has drawn bipartisan opposition. Earlier in the day, Steven Mnuchin, the Treasury secretary, told lawmakers that proposal and other broad measures to stimulate the economy that might take longer to agree upon could be part of a second request the administration sends Congress later.
Testifying on Capitol Hill, Mr. Mnuchin said he was focused for now on reaching agreement within 48 hours on an emergency bipartisan relief package.
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“The payroll tax would be great,” the president told reporters on Wednesday at the White House. “Dems are not in favor of it. I’m trying to figure out why.” “This is a little bit like a hurricane, and we need to cover these outside of normal expenses,” Mr. Mnuchin said, adding that he had been in “round the clock” discussions with Ms. Pelosi, Democrat of California, and Senator Mitch McConnell, Republican of Kentucky and the majority leader.
The Trump administration is also considering providing loan guarantees for the cruise, airline and hotel industries affected by the virus, similar to those that were offered after the terrorist attacks of Sept. 11, 2001. The talks unfolded as anxiety mounted on Capitol Hill, where officials were grappling with how to contain the spread of the virus. Lawmakers urged reporters, who typically gather in scrums, to keep their distance. Officials declared that as of Friday, Capitol tours would be suspended for the rest of the month. Senator Maria Cantwell, Democrat of Washington, closed her office after an aide tested positive for the coronavirus — the first known exposure on Capitol Hill.
Should the White House agree to the House Democrats’ package, Mr. McConnell would most likely bring it up for an immediate vote on the Senate floor, according to people with knowledge of his thinking who spoke on the condition of anonymity, clearing a path for Mr. Trump to quickly sign the legislation into law.
But it was not at all clear that the White House would embrace the plan, whose details — including the question of how much it would cost — remained up in the air. Ms. Pelosi and Mr. Mnuchin spoke twice by phone on Wednesday but had not reached a deal by the evening, as House leaders worked through the night to complete their legislation.
Mr. Mnuchin said the Trump administration was considering providing loan guarantees for the cruise, airline and hotel industries affected by the virus, similar to those that were offered after the attacks of Sept. 11, 2001.
“We are not looking for bailouts,” Mr. Mnuchin said. “Loan guarantees are a very effective way of making sure the government gets paid back without putting the government at risk.”“We are not looking for bailouts,” Mr. Mnuchin said. “Loan guarantees are a very effective way of making sure the government gets paid back without putting the government at risk.”
The Trump administration is also weighing its options for unilateral action. Mr. Mnuchin said on Wednesday that he would recommend to the president that the Internal Revenue Service allow a delay of tax payments beyond the April 15 deadline, without penalty or interest, that would apply to “virtually all Americans other than the superrich.” Mr. Trump announced in his address that he would use emergency authority to instruct the Internal Revenue Service to allow a delay of tax payments beyond the April 15 deadline, without penalty or interest, that would apply to “certain individuals and businesses negatively impacted.”
All individuals are allowed to request tax filing extensions online, but the Treasury secretary said his proposal was for a special provision to help small and medium-size businesses and “hardworking individuals.” It would not apply to large corporations or the wealthiest Americans, Mr. Mnuchin said, but he did not elaborate on what the threshold would be. All individuals are allowed to request tax filing extensions online, but Mr. Mnuchin said the proposal was for a special provision to help small and medium-size businesses and “hardworking individuals.” It would not apply to large corporations or the wealthiest Americans, Mr. Mnuchin said, but he did not elaborate on what the threshold would be.
“That will have the impact of putting over $200 billion back into the economy, and that will create a very big stimulus,” Mr. Mnuchin said, adding that the Treasury Department was already working on funding the initiative. “This action will provide more than $200 billion of additional liquidity to the economy,” the president said.
In moving hastily to unveil their own plans, Democrats hoped to set the terms of the debate and get ahead of the Trump administration, which is divided internally over what to do. Ms. Pelosi held a meeting with her caucus on Wednesday to discuss her proposal. Earlier in the day, top House Democrats were briefed by Jason Furman, an economist who advised President Barack Obama, on how to proceed. In moving hastily to unveil their own plans, Democrats hoped to set the terms of the debate and get ahead of the Trump administration, which has been divided internally over what to do. Ms. Pelosi held a meeting with her caucus on Wednesday to discuss her proposal. Earlier in the day, top House Democrats were briefed by Jason Furman, an economist who advised President Barack Obama, on how to proceed.
Congress already approved an $8.3 billion emergency aid package — more than three times what Mr. Trump requested — to send additional funding to the federal health agencies responding to the novel coronavirus. The president signed that measure last week. Congress already approved an $8.3 billion emergency aid package — more than three times what Mr. Trump requested — to send additional funding to the federal health agencies responding to the coronavirus. The president signed that measure last week.
After weeks of playing down potential effects of the virus, Mr. Trump is now calling for drastic economic measures, including the temporary elimination of payroll taxes, a proposal whose cost would rival both the Wall Street bailout of 2008 and the economic stimulus measure that followed. After weeks of playing down the potential effects of the virus, Mr. Trump is now calling for drastic economic measures, including the payroll tax suspension, whose cost would rival the Wall Street bailout of 2008 and the economic stimulus measure that followed.
Mr. Mnuchin has been privately skeptical about calling for a payroll tax cut or holiday, but he told lawmakers on Wednesday that such a move would provide broader stimulus for the economy, which is likely to face a slowdown from all the disruption.Mr. Mnuchin has been privately skeptical about calling for a payroll tax cut or holiday, but he told lawmakers on Wednesday that such a move would provide broader stimulus for the economy, which is likely to face a slowdown from all the disruption.
Peter Navarro, a top White House economic adviser, said that temporarily scrapping the payroll tax for workers and employers “offers one of the clearest paths to a highly effective fiscal stimulus as we head toward that inevitable light at the end of the coronavirus tunnel.”Peter Navarro, a top White House economic adviser, said that temporarily scrapping the payroll tax for workers and employers “offers one of the clearest paths to a highly effective fiscal stimulus as we head toward that inevitable light at the end of the coronavirus tunnel.”
In an email on Wednesday, Mr. Navarro wrote that the proposal had the potential to “completely offset any of the negative growth effects” of the virus, providing the equivalent of a 7.65 percent raise for lower- and middle-income workers and helping smaller businesses manage cash-flow problems.In an email on Wednesday, Mr. Navarro wrote that the proposal had the potential to “completely offset any of the negative growth effects” of the virus, providing the equivalent of a 7.65 percent raise for lower- and middle-income workers and helping smaller businesses manage cash-flow problems.
“Hourly workers shouldn’t be faced with the decision of whether to go to work sick or stay home and go broke,” Mr. Navarro wrote. “The president will have the backs of American workers and small businesses with his paid sick leave and small-business loan initiatives.”“Hourly workers shouldn’t be faced with the decision of whether to go to work sick or stay home and go broke,” Mr. Navarro wrote. “The president will have the backs of American workers and small businesses with his paid sick leave and small-business loan initiatives.”
Democrats want a more targeted approach. Senate Democrats on Wednesday released an initial response plan, featuring paid sick leave but also several new proposals. Democrats want a more targeted approach. Senate Democrats released a plan on Wednesday that includes a six-month break for borrowers on paying federal student loans and mortgages; block grants to help communities where the virus has shut down the economy; direct grants to small businesses; assistance to help public transit systems stay in operation; rental and mortgage payment assistance for some borrowers; and grants to child care centers and schools that are infected with the virus.
Those plans include a six-month break for borrowers on paying federal student loans and mortgages; block grants to help communities where the virus has shut down the economy; direct grants to small businesses; assistance to help public transit systems stay in operation; rental and mortgage payment assistance for some borrowers; and grants to child care centers and schools that are infected with the virus. “We are just appalled at the administration,” said Mr. Schumer, Democrat of New York. “We don’t think they should just throw money out of an airplane and hope that some of it lands on the people” who need assistance, he added.
“We are just appalled at the administration,” Mr. Schumer said, adding that Mr. Trump and his advisers have “not come up with a plan to help people who need help.” Democrats oppose the payroll tax suspension in part because it would not help workers who are furloughed or laid off, and would be doled out gradually across paychecks. In the House, Mr. Hoyer called it “a nonstarter.”
“We don’t think they should just throw money out of an airplane and hope that some of it lands on the people” who need assistance, Mr. Schumer added, referring to the payroll tax suspension, which would not help workers who are furloughed or laid off, and would be doled out gradually across paychecks. In the House, Mr. Hoyer called it “a nonstarter.”
The House Democrats’ plan was expected to include proposals for government-paid sick leave and increased spending on safety-net programs like food stamps and unemployment insurance, according to talking points circulated by Ms. Pelosi on Wednesday morning and people familiar with the drafting who were not authorized to discuss it.
The legislation, they said, would also include widespread and free coronavirus testing and new standards for protective equipment for health care workers, janitorial staff and others on the front lines of the virus. It would provide government reimbursement for all health costs Americans incur that are not covered by their insurance plans as well as efforts to increase the capacity of the health care system to take in coronavirus patients.
Democrats also plan to include new rules against price gouging for “medical and nonmedical essentials” during the outbreak, the talking points said.
Emily Cochrane contributed reporting.Emily Cochrane contributed reporting.