House Democrats Unveil New Coronavirus Relief Plan

September 29, 2020by Paul M. Krawzak, CQ-Roll Call (TNS)
House Speaker Nancy Pelosi. (Photo by Dan McCue)

WASHINGTON — House Democrats unveiled a $2.2 trillion pandemic relief package Monday night as part of a last-ditch attempt to secure new aid before the Nov. 3 elections.

Even as talks resumed between Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin on a potential compromise, Democrats sought to increase the public pressure by offering their own revised wish list that Republicans have said is still too costly. The White House has sought to hold the line at $1.5 trillion and some Senate Republicans have pushed to keep the price tag even lower.

The new draft Democratic measure, which could get a floor vote later this week if bipartisan talks founder, amounts to a slimmed-down version of a $3.4 trillion bill the House passed in May. After brief talks over the weekend, Pelosi and Mnuchin spoke by phone again Monday and agreed to resume talks Tuesday morning, Pelosi spokesman Drew Hammil tweeted.

Like its predecessor, the new legislation includes an extension of expanded unemployment insurance benefits, a new round of $1,200-per-adult tax rebate checks, and more money for small-business loans. But it differs from the May initiative to chop about $1.2 billion from the price tag.

In a big cost saver, Democrats have reduced their request for aid to state and local governments by roughly half. The bill seeks $436 billion to help state, local, territorial and tribal governments avoid layoffs as they cope with budget shortfalls.

That’s down from nearly $916 billion requested in May. Republicans have resisted state and local “bailouts,” while proposing to let already appropriated money be used more flexibly to make up for revenue shortfalls.

Among other cutbacks:

— Democrats pared their initial requests for hospitals and other health care providers and housing rental assistance by about $50 billion each

— Direct aid to the U.S. Postal Service would be reduced by $10 billion, though that same amount would also be made available through repeal of borrowing restrictions in the March coronavirus aid package.

— Aid to homeowners would be cut from $75 billion to $21 billion.

— An effort to temporarily lift a $10,000 cap on state and local tax deductions would be pared back from two years to one.

— Direct tax rebates to households would be scaled back by cutting the amount distributed to children and adult dependents to $500, although a three-person cap on the number of eligible dependents was removed.

— Child tax credits would be made refundable as in the May legislation, but Democrats now would limit the per-child benefit to $2,000, rather than $3,000 in the May bill, or $3,600 for children under age 6.

— The Paycheck Protection Program, which offers forgivable loans to small businesses that keep workers on the payroll, would lose $146 billon in previously appropriated money that went unspent. That money would be repurposed for other programs in the bill, such as $50 billion in grants to small businesses.

— A proposal to reward hazard pay to health care workers and others who must do risky jobs during the pandemic would be scrapped to save $190 billion.

But Democrats also pumped some additional money into new initiatives, which they said have arisen since the May legislation.

Among the big winners would be the pandemic-battered restaurant industry, which would get a $120 billion “restaurant stabilization fund” that has been the subject of a monthlong lobby campaign.

In addition, the airline industry would get an additional $28.3 billion in payroll support to avoid mass layoffs. Airlines have warned they would have to shed workers this fall without additional aid.

And Democrats also increased their proposed education funding, as schools struggle to reopen with increased health risks or face added costs in trying to conduct classes online. The new bill more than doubles the education request to $225 billion, including $182 billion for grades K-12 and $39 billion for colleges and universities.

But more important than the legislative fine print was the impact Democrats were hoping to have on bipartisan talks that have been mostly stalled for months. Democratic leaders have asked Republicans to increase their bottom line by at least $1 trillion and the new Democratic bill attempts to show how that additional money could be used.

“Democrats are making good on our promise to compromise with this updated bill, which is necessary to address the immediate health and economic crisis facing Americas working families right now,” Pelosi said in a letter to Democratic colleagues Monday. “We have been able to make critical additions and reduce the cost of the bill by shortening the time covered for now.”

Even $1.5 trillion could be a tough sell with Senate Republicans, however. They put forward a $1 trillion series of bills in July, but Majority Leader Mitch McConnell was forced to shelve the package after opposition within his conference to the price tag.

McConnell later released a scaled-back $650 billion package that was more than half offset by rescinding unspent funds from the relief law enacted in March. That measure had near-unanimous support among Republicans, but did not muster any Democratic votes to get over the Senate’s 60-vote threshold.

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Doug Sword contributed to this report.

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©2020 CQ-Roll Call, Inc., All Rights Reserved

Distributed by Tribune Content Agency, LLC.

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