The Trump administration and congressional leaders were closing in on a revised aid package for workers and businesses hit by the COVID-19 pandemic, as U.S. stock markets rebounded Friday morning from a sharp selloff Thursday.
Treasury Secretary Steven Mnuchin told CNBC he had spoken with Speaker Nancy Pelosi, D-Calif., as well as Senate Majority Leader Mitch McConnell, R-Ky., and House Minority Leader Kevin McCarthy, R-Calif., on Friday morning.
“Negotiations are going very well. This has been a bipartisan effort,” Mnuchin said. “I think we’re very close to getting this done.”
Seven more calls between Mnuchin and Pelosi took place through early Friday afternoon.
Meanwhile, Trump announced he’d be holding a 3 p.m. press conference at the White House to discuss the coronavirus response, amid reports he’s preparing to declare a national emergency under federal disaster aid law in order to tap up to $42.6 billion sitting in Federal Emergency Management Agency coffers.
Upon release, some sources said they expected the revised bill to get a House vote under suspension of the rules, which requires a two-thirds majority to pass. But Democrats weren’t sure Friday morning whether there would be enough GOP support.
The two parties had been nearing an accord Thursday night that would back off mandated paid leave for workers affected by the virus, including in the future after the coronavirus crisis passes, as Democrats initially wanted. Instead, the compromise was expected to give employers tax credits as an incentive to provide leave to their workers, though the talks were ongoing.
Other issues that were in play were potentially smaller increases for federal Medicaid matching funds than the 8 percentage-point boost Democrats sought, as well as President Donald Trump’s ask for up to $50 billion in expanded Small Business Administration loan authority.
In a letter to Democrats Thursday night, Pelosi said they had “defeated” an administration effort to limit access to free COVID-19 tests based on income. Mnuchin didn’t address the means-testing issue but said on CNBC that “people who are not insured will be able to get tests” under the emerging legislation.
Paid leave, food aid, Medicaid
The broad outlines of the legislation would, in addition to paid leave benefits and free coronavirus testing, expand unemployment insurance for furloughed workers; provide flexibility in child nutrition and food stamp funding, including a temporary waiver of Supplemental Nutrition Assistance Program work requirements; and help states and territories meet their Medicaid requirements.
The expected deal bolsters prospects for a speedy response to the potential job losses and lost business that could result in the coming weeks and months as the coronavirus takes hold across the country.
The Republican-controlled Senate, which protested the earlier bill drafted by House Democrats, agreed to cancel its scheduled recess next week so it could consider the brewing compromise.
The Trump administration has agreed to hold off on the president’s biggest stimulus proposal: a payroll tax holiday through the end of the calendar year.
“It would evenly and quickly distribute a lot of money,” Trump told reporters in the Oval Office Thursday. But he also opened the door to postponing consideration of the plan, which lawmakers of both parties declined to embrace this week.
“That won’t come immediately because that’s a stronger measure, but we are looking to do that and I think at the right time Congress will probably go along with it,” Trump said in remarks to reporters at the top of a meeting with Irish Prime Minister Leo Varadkar.
Mnuchin on Friday for the first time said the administration might be open to an alternative tax measure, given the payroll tax plan has run into static with Democrats. They say it will help higher-income earners and won’t help tipped workers and others who don’t pay significant payroll taxes.
“I think you know the president is working on a major stimulus package, whether it’s through the payroll tax cut or whether it’s through another means of delivering liquidity to hard-working Americans,” Mnuchin said.
Still, Trump made an eleventh-hour pitch for a payroll tax cut Friday morning in a tweet: “If you want to get money into the hands of people quickly & efficiently, let them have the full money that they earned, APPROVE A PAYROLL TAX CUT until the end of the year, December 31. Then you are doing something that is really meaningful. Only that will make a big difference!”
Third package
Mnuchin and Pelosi have both said they are ready to start work on a third legislative package, after the current bill and the earlier $8.3 billion supplemental appropriations law to respond to immediate public health needs. Pelosi didn’t specify what would be in it, but she’s said it will include items she and Mnuchin couldn’t agree on this time.
The next package “will take further effective action that protects the health, economic security and well-being of the American people,” Pelosi wrote to lawmakers Thursday night.
Mnuchin stressed that he was committed to helping the airline industry, which is getting hit hard by canceled bookings on a scale that could be akin to the post-9/11 airline crisis.
“I think we view this is as . . . the second inning of a baseball game,” Mnuchin said. “The speaker’s already come out and said she’s prepared to work with us and the Senate on other issues. We’ll be coming very quickly back on issues dealing with the airline industry.” He said aid for hotels and cruise lines was also under consideration but that airlines “are the next priority on my list.”
Mnuchin said the administration was also looking at other actions they could take on their own to ease the coronavirus-related economic pain. When asked about a temporary deferment of student loan payments, he said: “That’s on our list of 50 different items we’re bringing to the president for a decision.”
He also said U.S. Trade Representative Robert Lighthizer was considering limited tariff exemptions for companies that are particularly affected by the virus, but he said there’s no broader reconsideration of Trump’s tariffs on the table “at the moment.”
‘Comes up short’
Republicans said the earlier version of Pelosi’s bill would require too much bureaucracy and impose costs on businesses that could further damage the economy, such as the employer paid leave mandate.
McCarthy said Thursday the bill “comes up short” on several fronts. He said the Social Security Administration would need six months to set up the proposed paid sick leave program, “so it won’t work in time” for those who need immediate help.
He also faulted the measure for requiring all businesses to offer “permanent” paid sick leave even when there isn’t any public health emergency.
Rep. Rob Woodall, R-Ga., said Republicans were concerned about the bill’s creation of an apparent new paid leave entitlement by requiring employers to let workers accrue an extra seven days of leave on top of 14 days of immediate paid time off in the event of “any public health emergency,” not limited to the current coronavirus pandemic.
Republicans also expressed concern about passing a temporary increase in federal Medicaid funding to states without knowing what it would cost.
“These are such big items,” McCarthy said. “I just do not believe it would be smart on our part to rush that through.”
Trump said he wouldn’t support the Democrats’ bill, arguing their approach was “not a good way for them to get some of the goodies they’ve been talking about for 25 years.”
Trump added that he was still considering declaring an emergency that would free up more than $40 billion in disaster relief funds for affected areas, but that no final decision had been made.
“Might be some of the more minor things at this point,” Trump said of executive actions he could take to ease the economic burden of COVID-19.
Paul M. Krawzak and Andrew Siddons contributed to this report.
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