Senate Majority Leader Mitch McConnell said the Senate will work at “warp speed” to craft a massive new stimulus package to help Americans deal with the economic fallout from the coronavirus crisis, vowing that senators “will not leave” Washington until it’s done.
And Senate Majority Whip John Thune (R-S.D.) said Tuesday there is a “high level of interest” among Republicans for a Trump administration proposal to send as many as two $1,000 checks directly to individual Americans to help respond to the economic slowdown, a move that could cost an estimated $500 billion, according to GOP sources.
Treasury Secretary Steven Mnuchin made a pitch for the initiative at a lunch with Senate Republicans on Tuesday, part of an $800 billion-plus package being floated by the White House that also includes as much as $250 billion in emergency loans for smalls businesses being hit by the economic slowdown.
Under the Mnuchin plan, direct payments — on a means-tested basis — could be sent to American via the IRS as early as next month, although even that may not be as fast as some in Congress want.
“I think there is a high level of interest among our members in that idea and seems it might be an area where there’s some common ground with Democrats as well,” Thune told reporters following the Republican lunch.
Sen. Josh Hawley (R-Mo.), who has proposed a similar plan, said Mnuchin told senators the administration “could stand that up pretty quickly … and get pretty significant relief out there pretty fast.”
Senate Democrats have proposed their own $750 billion “Phase 3” plan to deal with the growing crisis, but President Donald Trump and Republicans seem ready to outbid them on government spending to help rescue the economy.
And while the idea of sending cash payments directly to Americans just might have been anathema to Republicans just a few weeks ago, ideological lines are being blurred quickly as the coronavirus crisis continues to spread, with more than 5,300 positive cases reported in the United States.
“These are not ordinary times. This is not an ordinary situation,” McConnell said a press conference. “So it requires extraordinary measures.”
The Senate will also take up and quickly pass a House-passed, $100 billion coronavirus stimulus bill referred to as “Phase 2.” Senate GOP aides said the bill could be through the chamber as early as Wednesday. Senate GOP leadership took the pulse of members on the House bill Tuesday in order to speed up passage but there were objections, according to two sources familiar with the matter.
That Phase 2 package, hammered out in talks between Mnuchin and Speaker Nancy Pelosi (D-Calif.), provides paid sick days and emergency leave for employees who become infected or have to deal with family members who are sick.
McConnell said there had been some consideration of holding onto the Phase 2 bill until the Phase 3 proposal was ready and then merging them, but he decided against it.
The Kentucky Republican also noted that some of his rank-and-file members didn’t like the House bill, but said, “My counsel to them is to gag and go for it anyway even if they think it has some shortcomings, and to address those shortcomings in the bill we’re in the process of crafting.”
McConnell said he’d created three Republican task forces to put together the Senate GOP version of a Phase 3 bill. Once that’s done, McConnell said he would then enter into negotiations with Minority Leader Chuck Schumer (D-N.Y.) to come up with a bipartisan package that can win at least 60 votes.
A senior administration official put the price tag on the legislative stimulus package at $1 trillion. In addition to the direct payments, the administration also wants $50 billion for airlines and the remaining amount focused on assistance to small and medium size businesses for workers and other priorities, the official said.
Mnuchin warned unemployment could spike to double-digit levels unless Congress acted, according to a source familiar with his comments. Bloomberg News first reported the comment.
The White House Tuesday morning also began signaling it was aiming for as much as $1 trillion in stimulus spending, split between a payroll tax cut, support for the airline industry and $250 billion in loans for small business.
Even before the legislation moves in the Senate, House Democratic leaders were working to quell rank-and-file anger over the amended bill, which actually included a significant rewrite to the paid leave language in a major concession to the White House.
The change — which would allow more businesses to seek exemptions from offering their employees paid leave — was pushed by administration officials as necessary to get the bill through the Senate, according to multiple sources.
Pelosi appeared to address the criticism from some in her caucus in a statement on Tuesday, in which she vowed to push for expanded paid leave in the next package.
“As the House develops our third Families First package, we are working to advance additional steps to expand the emergency leave mandate,” Pelosi wrote, laying out several provisions, including allowing workers who are sick to access longer term leave.
House Democrats have long said the payroll tax cut was a nonstarter but were also lukewarm to the idea of just doling out cash payments. When a former economic adviser to President Barack Obama raised the idea privately to Democrats last week, Pelosi shot down the suggestion saying she didn’t want to write checks to millionaires.
Democratic aides also threw cold water on the idea earlier Tuesday, saying the bureaucracy needed to implement such a massive program could delay payments for weeks if not longer. Instead, the aides said, they were looking at other ways to pad people’s wallets by expanding credits already written into the tax code.
“All this stuff can come together fairly quickly,” said one Democrat involved in the negotiations. “The question is what are ideas that can come together fairly quickly? Something new like direct payments to people isn’t feasible.”
Pelosi spoke with both Mnuchin and Federal Reserve Chairman Jerome Powell on Tuesday, according to her office. The speaker “was encouraged by the chairman’s perspective that with interest rates at nearly zero Congress is enabled to fiscally think big as we craft a robust response,” her spokesman, Drew Hammill said after the call with Powell.
Pelosi indicated later Tuesday afternoon that she would be open to combining the stimulus proposals being pushed by Democrats and the administration — targeted cash payments to Americans in need in addition to expanded tax credits.
“As Congress considers the next steps, the Speaker believes we should look at refundable tax credits, expanded UI & direct payments—but MUST be targeted,” Hammill tweeted.
Sarah Ferris contributed to this story.
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