While lawmakers on both sides of the aisle say it’s possible to negotiate a package and have it signed into law by President Donald Trump before the month-long August recess, a major obstacle is that Republicans are still divided among themselves about what their proposal would look like with some in the party reticent to do anything at all even as coronavirus cases in most parts of the country are spiking.
“It’s possible,” Sen. Rob Portman, a Republican from Ohio, told me about the prospects of a package before the August recess. “But, there is a difference of opinion. There is no question about it.”
And, that is just the divide between Republicans. The gulf between what Democrats and Republicans believe is needed in another stimulus makes it very hard to predict a path forward at this point. Congress has a way of kicking into gear when a deadline is approaching, of course. And, most Republican aides acknowledge that the party can’t head into the August recess without doing something. But, what that something is? Well, that’s hard to predict right now.
Over the break expect staff to begin hammering out the framework of what Republican demands may look like. But remember those could shift as members hear from constituents back home and the economy responds to the threat of the virus.
“I think there is going to be a bill. How big? Gonna depend on what happens to the economy,” Senate Finance Committee Chairman Chuck Grassley told me last week.
Where Republicans are divided
Unemployment insurance — At the end of the month, the additional $600 in unemployment benefits will expire for Americans out of work. The GOP conference agrees the benefit is too large to renew as is. Many Republicans have blamed it on disincentivizing Americans to return to work at all. But moderate members are uncomfortable letting it lapse completely. Some want to slowly decrease the amount of monthly benefit to a few hundred dollars while others want to pay Americans a bonus if they return to work. Portman would pay Americans an additional $450 a week to go back to their jobs. But, aides warn, members are all over the map on what they think the best approach here is.
State and local funding — Remember that debate about whether states should be given more flexibility to use federal dollars from the first CARES Act? That debate is still raging within the GOP conference. And, after a month of discussing it, there’s been no consensus. Some Republicans — staring down cash shortages in states where governments have to balance their budgets in the months ahead — have fought to expand the flexibility states have to use federal dollars. Some moderates have even argued that the next stimulus bill has to include more money for states and localities. But, this is a red line for fiscal hawks who don’t want to give states like New York or California more flexibility to use federal dollars to cover budget shortfalls Republicans view as symptomatic of bloated state pension programs and other excessive spending.
Asked if the difference within the conference on the issue have been worked out, Sen. John Cornyn, a Republican from Texas, didn’t exactly answer the question: “Yeah we will work it out.”
Doing anything at all — It’s not the majority view, but there is a coalition within the Republican conference that believes another stimulus package is ill-advised. The argument? The economy is rebounding, federal spending is already out of control and some of the money from the last stimulus package isn’t even spent yet including the massive Main Street Lending Program, which was supposed to give bigger businesses access to capital, but given the strings attached, has not been an attractive tool for most medium-sized businesses.
McConnell’s view — Senate Majority Leader Mitch McConnell is aware of the divides within his conference. He’s also aware that views may shift after the recess. For weeks, McConnell has been having private conversations about what the next stimulus package may look like, allowing members to vent in party lunches and present a series of proposals. But, McConnell has played the long game here, not rushing to any conclusions until the very last possible moment when dealing with a virus that is forcing the country to adapt on a constant basis. McConnell has said little about exactly what will be included in the next package and that’s intentional. He needs members to have buy in, and he doesn’t want to declare something absolutely critical or dead on arrival until it is clear exactly where the economy — and his conference — is.
McConnell’s baseline priorities for the next stimulus package are as follows:
- Liability protections for schools, businesses and restaurants.
- Total price tag under $1 trillion.
Another area to watch
The issue few are paying attention to right now is how this next stimulus package deals with getting kids back to school. Last week, Republicans were reminded in their lunch that the staggering cost of retrofitting schools so they are safe for returning students in the fall is something Congress has to address. The School Superintendents Association estimates it will cost the average school district nearly $1.8 million to ensure students can return to school safely this fall.
Not only will students need more room in classrooms and protective barriers in public spaces like lunchrooms, but the cost of additional bus routes to limit the amount of children on any bus at a time or the cost of rapid testing to ensure kids are safe, is a real issue lawmakers know they have to address in this package.
“If 100,000 public schools and 6,000 public colleges need more money for students to go back safely or to go back to childcare safely then I am in favor of that. I am in favor of spending that amount of money, but I don’t know what that amount is yet,” HELP Chairman Lamar Alexander told me.
Democrats want another round of stimulus checks, a renewal of the $600 unemployment benefit, more money for state and local governments, more flexibility for that money to be spent, billions for the US Postal Service, additional money to expand vote-by-mail and additional funding for testing and contact tracing.
Republicans are opposed to a so-called bailout for the US Post Office, and there is some reluctance to do another round of stimulus checks without stricter eligibility requirements around them. Republicans also have issues with giving state and local governments more money for the reasons addressed above.
The House’s opening proposal back in May cost $3 trillion. That is three times what McConnell has said he’d be willing to spend.
In other words: There is a long ways to go between a GOP proposal and Democratic one.
It’s going to be a long month of negotiations.