Republicans in Disarray on Coronavirus Relief Bill

Tuesday, July 21, 2020

Republicans in Disarray on Coronavirus Relief Bill

Republican efforts to develop a coherent plan for the next coronavirus relief bill got off to a rough start Tuesday, with lawmakers and the White House unable to agree on even basic elements of the GOP proposal.

At a lunch meeting between lawmakers and officials from the Trump administration, disagreements reportedly arose on policy details such as a proposed payroll tax cut and additional funding for the Centers for Disease Control and Prevention, as well as over the ultimate size of the relief package.

Deadline looming: Earlier Tuesday, House Speaker Nancy Pelosi (D-CA) said she hopes lawmakers can reach a deal by the end of next week, but Minority Leader Kevin McCarthy (R-CA) said he doubted the legislation would get done in July, instead citing the first week of August as a target date. Senate Majority Leader Mitch McConnell (R-KY) reportedly laughed in response to a question about whether the bill could pass by the end of next week, the target date set by Treasury Secretary Steven Mnuchin.

Saying the Senate Republicans’ version of the relief bill will be released “very soon,” McConnell provided some details on the still-developing proposal. He said it would include $105 billion for schools to help cover the cost of reopening in the middle of a pandemic; another round of stimulus check for individuals; reimbursement for businesses for coronavirus-related expenses, such as cleaning and the installation of plexiglass barriers; and another round of Paycheck Protection Program loans for small businesses.

But Republicans still face plenty of internal differences, and they reportedly made little progress Tuesday in bridging those disagreements, prompting some “crowing” by Democratic leaders. “Republicans are in complete disarray,” Senate Minority Leader Chuck Schumer (D-NY) said. “Totally incompetent. Totally in disarray. Totally at war with one another.”

Differences on spending: Mnuchin and the White House had indicated that the administration was looking to keep the cost of the package around $1 trillion, but The Washington Post reports that the Treasury secretary “had abandoned that mantra” by Tuesday. “I think we’re going to spend what we need to spend, and we’re going to make sure we don’t spend more than that,” Mnuchin said.

Other Republicans still object to the idea of increased spending. “What in the hell are we doing,” an angry Sen. Ted Cruz (R-TX) reportedly said in response to proposals to boost spending in the bill.

Major hurdles ahead: Republican chaos aside, the overall discussion far suggests that the Democratic-controlled House, the Republican-controlled Senate and the Trump administration all agree the U.S. needs another substantial round of relief and stimulus. But the parties are nowhere near agreement when it comes to many of the specifics. Here’s a rundown of key sticking points via Amber Phillips of The Washington Post.

Unemployment benefits: The $600 per week boost in benefits expires in just a few days, all but guaranteeing a lapse in the program for millions of Americans. Democrats want to continue the program at the $600 level, while Republicans have signaled they want to cut the weekly payment by several hundred dollars.
Payroll tax cut: President Trump is pushing for a payroll tax cut, but Democrats and some Republicans, citing the cost, the optics of cutting the source of Social Security funding and the fact that such a cut would do nothing for the unemployed, are opposed to the idea. Bowing to Trump, McConnell may include a deferral of payroll taxes in the proposal, though few think it will make it into the final bill.
Stimulus checks: There appears to be agreement over including another round of stimulus checks in the relief bill, but McConnell has indicated the payout should be limited to households earning less than $40,000.
Testing and tracing: Lawmakers from both parties want to include additional funds for testing and tracing programs at the state level, but the Trump administration was reportedly trying to block the effort over the weekend. The Washington Post reported Tuesday, however, that the White House has changed course and will not oppose a Republican proposal to provide $25 billion for the effort.
Aid for states and cities: Democrats want to provide $1 trillion to state and local governments reeling from falling tax revenues and rising social welfare costs, but Republicans have little interest in anything close to that level of support, saying they don’t want to bail out badly run states.
School reopening: Trump and administration officials are pushing hard to open schools in the fall, and Republicans may defer to those demands by making federal educational aid contingent on some degree of reopening at the state and local level.
Liability shield: McConnell has repeatedly said businesses must be given extra protection from lawsuits related to potential coronavirus illnesses and deaths, but Democrats insist on additional aid for workers.

Biden Unveils $775 Billion Plan for Universal Preschool and Caregivers

Joe Biden on Tuesday rolled out the third plank in his “Build Back Better” economic recovery program, a $775 billion, 10-year plan that aims to ease the burdens of caring for children and the elderly.

“This one is about easing the squeeze on working families that are raising their kids and caring for aging loved ones,” Biden said in remarks prepared for delivery at an event in New Castle, Delaware.

“We are trapped in a caregiving crisis within an economic crisis within a public health crisis,” he later added.

Here’s an overview of Biden’s plan:

It is titled “The Biden Plan for Mobilizing American Talent and Heart to Create a 21st Century Caregiving and Education Workforce.” It’s a mouthful. Let’s call it TBPMATHCTOCCEW. Or not.
The proposal calls for universal preschool for 3-and 4-year-old children and spending $325 billion to increase the availability of child care. The plan would offer low-income and middle-class families a refundable tax credit of up to $8,000 for one child or $16,000 for two or more children to offset as much as 50% of child-care costs. Families earning between $125,000 and $400,000 a year would be eligible for a partial credit. The plan calls for raising child-care workers’ pay and benefits and expanding subsidies for after-school, weekend and summer-care programs.
The plan would allocate $450 billion toward improving elder care options. It seeks to eliminate the waiting list of about 800,000 people for home and community services under Medicaid by increasing funding to states. It also proposes to add 150,000 community health workers, with many a focus on low-income areas. The campaign pointed to a study published earlier this year that found that every dollar spent on community health workers would yield $2.47 in savings.
The plan aims to create 3 million new jobs in caregiving and education. Biden’s campaign says it would boost overall employment by about 5 million once unpaid caregivers are freed up to pursue jobs if they so choose.
The campaign notes that the first step in the former vice president’s recovery efforts would be to “immediately provide states, tribal, and local governments with the fiscal relief they need to keep workers employed and keep vital public services running, including direct care and child care services.”

Biden’s campaign says the plan will be paid for by “rolling back unproductive and unequal tax breaks for real estate investors with incomes over $400,000 and taking steps to increase tax compliance for high-income earners.”

The plan would reportedly limit the ability to engage in transactions known as like-kind exchanges, which allow real estate investors to defer capital gains if they quickly reinvest the proceeds of a sale in another property. It would also raise the top capital gains tax rate from 20% to 39.6%.

“Combined with limits on like-kind exchanges, that policy means commercial real-estate transactions that today yield no income taxes could instead be taxed immediately at a 39.6% rate,” Bloomberg News reports, adding that the proposed tax increases would raise $294 billion over a decade according to Tax Policy Center estimates from earlier this year.

Biden previously released plans to boost U.S. manufacturing via a “Buy American” program and combat climate change with investments in clean energy and infrastructure.

Number of the Day: $383

The $600 weekly enhancement for unemployment benefits Congress provided in March as the coronavirus crisis took hold expires after this week, virtually guaranteeing an end to the program unless and until lawmakers can agree on an extension. Without the enhancement, unemployment payments will average $383 per week, says CNBC’s Greg Iacurci, citing figures from before the pandemic struck. The loss of the $600 payment will represent a 61% cut in income on average for the roughly 32 million Americans currently receiving unemployment benefits.

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Republicans in Disarray on Coronavirus Relief Bill