The White House and Congress are scrambling to hash out the details of a massive stimulus package to help a U.S. economy increasingly damaged by the coronavirus pandemic.
There had been hope on Capitol Hill that Congress could pass a deal this week, as President Donald Trump seeks a measure with over $1 trillion in spending. Yet as of Wednesday morning, the Senate had yet to pass a second relief bill already passed by the House, which has created uncertainty about stimulus. Senate Majority Leader Mitch McConnell said the vote would come later Wednesday, after a delay triggered by Sen. Rand Paul, his fellow Kentucky Republican.
Two Democratic aides, who declined to be named due to the sensitivity of negotiations, cautioned it may be difficult to get through both the second package and a much larger one in a single week.
A White House representative didn’t immediately respond to a request for comment.
A first bill, signed by President Donald Trump earlier this month, focused on funding for vaccines, as well as for states and individuals battling the pandemic.
The much broader third relief bill, the details of which remain in flux, could exceed $1 trillion. It could include direct payments to individuals, small business lending, payroll tax cuts, and credit facilities for larger businesses and commercial paper facilities.
Some of the credit facilities for larger businesses will go to industries the government is looking to aid, a person familiar with the situation told CNBC.
Several companies and industries are seeking relief. They include the U.S. travel and tourism industry, which is seeking $150 billion in aid, the U.S. airline industry which is seeking government more than $50 billion, and Boeing which is seeking $60 billion.
The administration has made clear it is intent on helping those industries in particular that have been pummeled by travel restrictions. President Donald Trump said in a press conference yesterday the challenges facing the industry are not its fault.
Lawmakers on both sides of the aisle have supported offering relief to certain industries, particularly airlines, which have drastically cut back capacity as the coronavirus and resulting travel restrictions spread. Defenders of industry-wide bailouts think collapses would hurt workers as well as executives. Airlines, in particular, are viewed as essential to the U.S economy, supporting 750,000 jobs and local hubs throughout the country.
“Central banks need to work with major financial institutions to target cheap credit to vulnerable businesses — airlines, hotels, manufacturers paralyzed by broken supply chains and the like,” wrote Damon Silvers director of policy and special counsel for the AFL-CIO.
Treasury Secretary Steven Mnuchin has told GOP senators that unemployment could reach 20% if Congress doesn’t enact its proposed stimulus package.
A number of Democrats, however, have said they will not support any bailout of an industry that doesn’t come with sacrifice from companies.
Sen. Elizabeth Warren of Massachuetts on Tuesday outlined her own set of stipulations for any big business that receives federal bailout money. They include permanently giving up stock buybacks and adding at least one seat to the board representing workers.
There have also been continued dispute between the two parties over paid leave for workers. Democrats have pushed hard to offer all U.S. workers the ability to stay home during the pandemic without fear of losing a paycheck. Republicans, though, have argued that certain small businesses may not be able to afford that service, while cash flow freezes up.
In the second relief bill, currently with the Senate, House Speaker Nancy Pelosi, D-Calif., made concessions to pressure from lobbyists and Republicans.
In that bill, employees will be entitled to two weeks of sick leave, including those whose children’s schools have closed, those who are in quarantine or are taking care of family members. But, for the next 10 weeks, the benefit will only extend to workers who are caring for a child whose school or daycare has shut.
Democrats also conceded to allowing health-care and emergency medical service workers, subject to the regulatory authority to exempt from paid time off, should there be significant shortages of health-care workers.
Pelosi, though, did secure as part of the deal a tax credit for small- and medium-size employers offering leave and insurance.
Leaders of both parties have implied they intend to resume that fight in the debate over the third bill.
“It seems increasingly clear that the House’s effort to mandate that small businesses provide new worker benefits, just [as] many small businesses themselves are in major jeopardy of their own, might even be actively harmful unless we urgently address a broader package that includes more and broader small business relief,” McConnell said Tuesday.
Pelosi, meantime, said Tuesday that “during negotiations, the Democratic House will continue to make clear to the administration that any emergency response package must put families first before any aid to corporate America is considered.”
Among the issues Pelosi said she would push for are refundable tax credits for self-employed workers or those in the gig economy.
She also said the party will “ensure that any action taken by the Administration balances the workforce needs on the frontlines of the coronavirus crisis while ensuring that first responders and health care workers have access to the paid leave that they need.”
