Lawmakers close in on $2 trillion stimulus deal
Congress and the Trump administration on Tuesday closed in on a massive $2 trillion stimulus package to address economic fallout from the coronavirus, as lawmakers reviewed final language and the Senate aimed for a swift vote.
Senate Majority Leader Mitch Mcconnell (R-KY.), Senate Minority Leader Charles E. Schumer (D-N.Y.) and Treasury Secretary Steven Mnuchin — the top White House negotiator — all said they expected resolution soon. However, lawmakers were still hashing out details, and the situation was fluid and could quickly change.
Hopes for a vote Tuesday evening dissipated as hours passed without resolution, with lawmakers engaged in protracted haggling among themselves and with Trump administration officials.
Exiting an early evening meeting in Schumer’s office, Mnuchin told reporters: “I know you’ve heard this before, but everyone’s trying to close this out today. . . . We are going back and forth on text.”
The package would extend ex
traordinary — and unprecedented — taxpayer assistance to potentially millions of American and foreign companies that have been hammered by the fast-moving economic crisis. It would extend one-time cash payments to most Americans in an effort to flood the economy with money. The bill is being rushed through Congress without public hearings or formal review, and it’s unclear how effective the measures would be in arresting the economy’s sudden fall.
House Speaker Nancy Pelosi (D- Calif.) told colleagues on a conference call that the Senate bill had made “a big advance” but “doesn’t have everything we want,” according to multiple people with knowledge of the call who spoke on the condition of anonymity to describe its contents.
The stock market rose sharply Tuesday in anticipation of the deal, with the Dow Jones industrial average surging more than 2,100 points, or 11.4 percent. The government is dealing with a number of competing pressures, though, as President Trump declared that he’d like much of the country to be up and running by April 12 even though the number of people testing positive for the novel virus in the United States continues to climb.
The Senate bill would direct payments of $1,200 to most American adults and $500 to most children, create a $500 billion lending program for companies, states and cities, and extend an additional $367 billion to help small companies deal with payroll problems. It would bolster the unemployment insurance system and pump $150 billion into U.S. hospitals. The bill more than doubled in size in just a few days.
White House National Economic Council Director Larry Kudlow called it the “single largest Main Street assistance program in the history of the United States.”
The delay in finalizing a deal came, in part, because aides launched a painstaking scrub of the bill’s text, to make sure that one of the most ambitious pieces of legislation ever attempted by Congress — thrown together in little over a week — actually said what lawmakers wanted it to say.
Senate Republicans were being extra meticulous because they felt an earlier and much smaller coronavirus relief bill, which Mnuchin negotiated in a rush with Pelosi earlier this month, turned out to have provisions related to paid sick leave that GOP senators opposed — but which they reluctantly accepted. Now, they wanted to double- and triple-check Mnuchin’s work in brokering a deal with Schumer given the enormous stakes.
Still, the largely optimistic outlook on Capitol Hill was a shift after days of partisan rancor in the Senate, as lawmakers squabbled over who was at fault for their failure to address the crisis that has shaken the economy, led many businesses to dramatically scale back operations, and forced millions of Americans to seek unemployment benefits.
“Today, the Senate can get back on track. Today, we can make all of the Washington drama fade away,” Mcconnell said. “If we act today, what Americans will remember, and what history will record, is that the Senate did the right thing.”
As lawmakers neared a deal, the White House made a significant concession to Democrats’ demands, agreeing to allow enhanced scrutiny over the massive loan program that is a centerpiece of the Senate’s $2 trillion coronavirus economic package.
This pertains to the $500 billion loan and loan guarantee program that the Treasury Department would be tasked with administering for companies, states and cities. Of that amount, $425 billion is supposed to go to businesses, cities and states. An additional $50 billion would go to passenger airlines, as well as $8 billion for cargo airlines, and $17 billion for firms that are deemed important to national security.
President Trump has already said he wants some of the money to go to the cruise ship industry, and he also wants assistance for hotels. When he was asked Monday evening who would perform oversight of the program, Trump responded, “I’ll be the oversight.”
But during closed-door negotiations on Capitol Hill, White House officials agreed to allow an independent inspector general and an oversight board to scrutinize the lending decisions, senators said.
The most recent precedent for this is the $700 billion Troubled Asset Relief Program that was created during the 2008 financial crisis. To oversee TARP, Congress created an independent inspector general, a regulatory oversight board and a congressional oversight panel. Over the course of several years, investigations uncovered numerous cases of fraud at large and small companies as firms sought to obtain taxpayer money through various programs.
Democrats welcomed the development.
“We got better oversight, better oversight,” Sen. Joe Manchin III (D-W.VA.) said as he left a morning meeting with Schumer. “The oversight basically is saying that you know you can’t just . . . exempt everybody and give all your corporate executives, based on the backs of the taxpayers, a free carnival.”
Manchin has been critical of the bill being weighted more toward Wall Street than average America. Trump took a shot at the lawmaker when asked about his criticism during an interview Tuesday on Fox News.
“Does Joe Manchin want all of these, or many of these companies to go out of business? We’ll have an unemployment rate the likes of which nobody’s ever seen before,” Trump said. “We have to save these companies. These are companies that weren’t in trouble three weeks ago, and now they’re in trouble because of what happened. These are great companies, they’re in some cases triple A companies.”
Tuesday’s developments came after Schumer and Mnuchin negotiated until nearly midnight on Monday at the Capitol, updating Trump frequently and sounding more optimistic than they have through days of rocky talks. On Twitter Tuesday morning, Trump called on Congress to “approve the deal, without all of the nonsense, today.”
The legislation would also significantly boost unemployment insurance, expanding eligibility and offering workers an additional $600 a week for four months, on top of what state unemployment programs pay.
“We had asked for four months and four months looks like what we’re going to get,” Schumer said on the Senate floor. “It will put money into the hands of those who need it so much because they lost their jobs, as I said, through no fault of their own.”
The legislation also contains $130 billion for hospitals and $150 billion for a state and local stimulus fund, both major Democratic priorities, Schumer told fellow Democrats on a conference call, according to a person familiar with the call who spoke on the condition of anonymity to discuss it.
Lawmakers of both parties are under extreme pressure from their constituents and health-care providers in their districts and states to act to provide desperately needed money and supplies amid widespread shortages and waves of layoffs. As of Tuesday evening there were more than 53,000 confirmed cases of the coronavirus in the United States, and the numbers were rising by the hour.
Mnuchin was joined on Capitol Hill on Tuesday by White House legislative affairs director Eric Ueland and Rep. Mark Meadows (R-N.C.), the newly announced White House chief of staff. They joined key Senate Republicans around midday to review terms of the deal.
Sen. Marco Rubio (R-fla.), who negotiated the small-business portion, said it had grown to $367 billion, with inclusion of six months of loan forbearance for all small businesses adding $17 billion to the original $350 billion price tag.
“I can’t imagine there not being a deal given the differences that remain are frankly not insurmountable,” Rubio said following the meeting.
All parties would like to act swiftly, so if the Senate is able to pass a bipartisan package quickly the expectation is that the House would follow suit. House Democrats released their own larger and more generous stimulus package on Monday, stuffed with provisions that would be non-starters for Republicans such as a $15 minimum wage requirement for airlines and businesses that receive funds. But that legislation would be set aside and Pelosi would attempt to move the Senate bill through the House.
One outstanding issue Pelosi raised is that Democrats are pushing for a dramatic increase in food stamp benefits in exchange for accepting billions more in funding for the administration’s farm bailout that Republicans have included in the stimulus bill. Sen. John Hoeven (R-N.D.) said in a news release that the legislation would increase the amount the Agriculture Department can spend on its bailout program from $30 billion to $50 billion.
A few other sticking points remained. Democrats were pushing for more money for Native American tribes. And in early drafts of the bill circulating Tuesday, nonprofits, with the exception of those that receive funding from Medicaid, would have been allowed to access the small business loans. This would effectively have excluded some health centers that provide reproductive services. Some Democrats and health advocates objected to that language — and as the legislation was finalized it appeared to have been struck..
The House of Representatives is currently out of session, and it would be tricky for House members to return en masse to Washington to vote. Democratic aides said they were optimistic that a strong bipartisan Senate vote would make it possible to pass the bill by unanimous consent in the House — a process requiring only two members present in the House chamber. But that would require every lawmaker to agree — a tall order for a $2 trillion bill touching every part of the U.S. economy.
“If we act today, what Americans will remember, and what history will record, is that the Senate did the right thing.” Senate Majority Leader Mitch Mcconnell (R-KY.) said Tuesday.