Congressional leaders add stimulus checks to $900 billion relief package as they near deal

Source: By Jeff Stein, Mike DeBonis and Seung Min Kim, Washington Post • Posted: Thursday, December 17, 2020

New direct payments will likely be included, but leaders are scrapping aid to states and cities as well as liability protections for companies as they try to finish negotiations.

Congressional leaders said Wednesday that they are nearing agreement on a roughly $900 billion economic relief package that would include a second round of stimulus checks and could be completed by the end of this week.

The package emerging is expected to include hundreds of billions of dollars in aid for ailing small businesses and jobless Americans; tens of billions of dollars in aid for other critical needs, such as vaccine distribution and schools; and a one-time check of between $600 and $700 for millions of Americans below a certain income threshold.

The relief bill is likely to be coupled with several other major legislative efforts — from legislation to fund federal agencies to a bipartisan effort to rein in surprise medical billing — that lawmakers could then pass into law in a matter of days.

Lawmakers are racing to pass a deal in part because of widespread signs of economic deterioration in the face of the resurgent pandemic, as well as the imminent expiration of several critical federal aid programs by the end of the year. Nearly 8 million Americans have fallen into poverty since this summer, according to a new report, in part because emergency benefit programs expired. More Americans are filing for unemployment benefits, and the pace of hiring has slowed.

Congress must also pass a new spending bill by midnight Friday to avoid a shutdown of the federal government. Aides said lawmakers could pass another short-term extension of government funding to buy negotiators more time to strike a deal.

Tensions over the new package flared in the final stages of negotiations, with Sens. Bernie Sanders (I-Vt.) and Joe Manchin III (D-W.Va.) engaging in what multiple aides described as a heated exchange during an internal conference call Wednesday afternoon. Sanders pushed for the package to include more robust stimulus checks. Manchin has said unemployment benefits are more essential to approve and helped spearhead a bipartisan compromise that Sanders has derided as insufficient. Because lawmakers are trying to move the bill quickly, Sanders’s opposition could be enough to blow up the whole deal, infuriating members who are trying to rush it into law.

Asked about the exchange, Sanders said he had been candid in the private call with his belief that Democrats had given in too easily to Republican demands.

“The heat was exactly what I told you: I don’t understand how Democrats accepted — when you had [Treasury Secretary Steven] Mnuchin talking about $1.8 trillion and this large Heroes bill,” he said, citing House Democrats’ more than $3 trillion relief package from the summer. “I don’t know how Democrats started accepting a framework of only $900 billion.”

These changing political dynamics have also opened the door for a potential agreement. Congressional Democrats had sought a much larger stimulus package before the election. Many, however, have now softened their position following President-elect Joe Biden’s victory in hope of securing some immediate relief. Leadership negotiations were also revived by bipartisan legislation released earlier this week, spearheaded by a team including Manchin and Sens. Mark R. Warner (D-Va.) and Mitt Romney (R-Utah). The final bill is expected to closely mirror their initial proposal, which was also crafted in part by the House Problem Solvers Caucus.

As the bills began to take shape, House Speaker Nancy Pelosi (D-Calif.) hosted hours of meetings Tuesday with the three other most senior congressional leaders — Senate Majority Leader Mitch McConnell (R-Ky.), Senate Minority Leader Charles E. Schumer (D-N.Y.) and House Minority Leader Kevin McCarthy (R-Calif.). Negotiators have described those talks as productive.

“The stimulus package is encouraging. It looks like it’s very, very close,” Biden said Wednesday in Wilmington, Del. “It’s a down payment. An important down payment that’s going to have to be done. … It’s very important to get done.”

House Majority Leader Steny H. Hoyer (D-Md.) told reporters Wednesday afternoon that he is hoping for a deal “later today or early tomorrow morning.”

Even if negotiators reach a deal Wednesday, clearing it through Congress by the Friday midnight deadline could be difficult. The House could vote as soon as Thursday, waiving its usual three-day rule for the review of legislation. The Senate would then have to secure unanimous consent among its 100 members to skip procedural hurdles and move to a final vote before the deadline. An objection from Sanders or any other senator could cause a brief government shutdown unless lawmakers agree to another short-term funding bill.

The emerging stimulus package is expected to include a new round of funding for the Paycheck Protection Program, which faced significant controversy for giving government aid to large corporations, as well as targeted relief for other ailing business sectors. It will also include $300 per week in supplemental federal benefits for more than 10 million jobless Americans, according to Sen. John Thune (R-S.D.), the No. 2-ranking Republican senator.

Democrats also secured $25 billion to establish a new program to provide emergency rental assistance, funding that could be used to cover past and future rent payments, as well as other related expenses, Schumer told Senate Democrats on a video call Wednesday, according to a Democratic official familiar with his remarks.

Some key parts of the bill have shifted in the past few days. The initial $908 billion bipartisan proposal, released earlier this week by the group of moderates, would have not authorized another round of stimulus checks. Negotiators had tried to keep the bill’s price tag below $1 trillion to maintain Republican support for the effort. The bill would, however, have included money for state and local governments.

But state and local relief funding appeared to fall out of the deal Wednesday because lawmakers were unable to reach a compromise on coronavirus-related liability protections for corporations.

Slashing aid for states and cities from the emerging deal would free up close to $160 billion that could be reapportioned for the direct payments. Using this pool of money, lawmakers have attempted to finance stimulus checks that are roughly half the size of the $1,200 checks approved in March, or $600 per person. Discussions were ongoing on Capitol Hill about the exact size of the payments. Some of the $160 billion could also be used to expand funding for vaccine distribution, people involved in the discussions said.

The potential inclusion of stimulus checks came after a push from Sanders and Sen. Josh Hawley (R-Mo.), who threatened must-pass government spending legislation to ensure a vote on a second round of stimulus checks. President Trump has also pushed for another round of stimulus checks to be included in the final package, as have some left-leaning lawmakers in the House. Treasury Secretary Mnuchin had proposed including $600 stimulus checks in the package last week, but Democrats opposed the measure then because the White House also wanted to slash unemployment aid.

“I would say that that’s progress. It’s not where I would like it to be,” Hawley told reporters of the bill under development Wednesday.

Sanders also praised the inclusion of $600 checks as a “good start” but added: “I’m going to continue to fight for more.”

The addition of the stimulus checks is expected to also come in part by reducing the amount of unemployment aid. Congressional leaders have told other lawmakers that they are planning on reducing the length of unemployment benefits by one month from the bipartisan plan, according to two people who spoke on the condition of anonymity to share private remarks. That could mean that the extended benefits would expire at the end of March. Such a timeline could force the incoming Biden administration to move more quickly in its effort to pass a massive stimulus bill early next year. Sen. Ron Wyden (D-Ore.), the top Democrat on the Senate Finance Committee, panned the cut to unemployment benefits as “robbing Peter to pay Paul.”

Thune also suggested to reporters that lawmakers are seeking to prevent people receiving federal unemployment benefits from also receiving a direct payment, calling that a potential “double benefit.”

Failure to approve new aid for state and local governments could also come at a perilous time for municipalities across the country. One person familiar with negotiations said the agreement would include “other avenues to deliver aid” to states, cities, territories and tribes but did not provide specifics. Two other aides said lawmakers have discussed approving $90 billion for the Federal Emergency Management Agency that could then be distributed to states and cities. Thune said many GOP lawmakers would oppose that provision if “it’s simply a way of disguising money for state and local governments.”

The legislative push was expected to include various other priorities unrelated to the relief package. Along with the $900 billion legislation, lawmakers are expected to approve $1.4 trillion to fund the federal agencies; tens of billions of dollars in extensions to expiring tax provisions; numerous trade provisions; and a bipartisan energy bill authored by Manchin and Sen. Lisa Murkowski (R-Alaska), among other potential measures.

The bipartisan compromise on medical billing that lawmakers are working to include in the bill has been in development for more than a year, pitting insurance companies against private equity firms and doctors’ groups in an expensive public relations and lobbying battle. The legislation requires providers and insurers to negotiate directly, working with independent arbitrators to settle disputes. That approach, favored by the doctors and their financial backers, won out over a system of “benchmarking” prices to the rates insurers pay to providers already in their networks.