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New Dem Coalition Calls for Coronavirus Relief Tied to Economic Conditions

July 20, 2020 by Dan McCue
With the U.S. Capitol and Washington Monument in the distance, a man stands at the edge of the Lincoln Memorial Reflecting Pool at sunrise, Sunday, June 7, 2020, in Washington.

WASHINGTON – Members of the largest ideological caucus in the House threw down the gauntlet on a new coronavirus relief package Monday, calling on their colleagues on Capitol Hill to strike a deal extending existing benefits now while ensuring continued government aid will be available to those in need for the duration of the health crisis.

“Unfortunately, the current state of the public health crisis associated with COVID-19 is much worse than we expected when we passed the CARES Act and subsequent recovery packages [in the Spring],” said New Democrat Coalition Chair Derek Kilmer during a Monday morning conference call with reporters.

“As a result, I feel like Congress is repeatedly in the position of that scene from ‘Jaws’ where Brody says, ‘We’re going to need a bigger boat,'” the Democrat from Washington State said.

On July 31, key provisions of the $2.2 trillion CARES Act are set to expire. The law, passed in March, is Congress’ principle enacted response to the virus, including pandemic unemployment payments of $600 per week and a moratorium on evictions from public housing and rental properties with federally backed mortgages.

But as lawmakers returned to a Capitol Hill that is still off-limits to tourists and many of their staffers continue to work virtually, there are sharp divisions over what to do next. And, as Kilmer implied, the pandemic is showing no signs of slowing down, with 41 states currently reporting a significant increase in cases.

With nearly 18 million Americans still out of work, and millions of others earning less than they did before virus-sparked lockdowns sent the economy into recession, most Republicans and Democrats at least agree that further government aid is needed.

But it will take compromise and concessions from lawmakers at a time when political stakes are high for all sides before the November election.

The House has already approved a sweeping $3 trillion effort, giving Democrats momentum heading into negotiations.

Senate Majority Leader Mitch McConnell was expected to roll out his $1 trillion package in a matter of days. Among its provisions were $75 billion to help schools reopen, reduced unemployment benefits alongside a fresh round of direct $1,200 cash payments to Americans, and a five-year liability shield against coronavirus lawsuits.

But during a meeting at the White House Monday with President Donald Trump and Treasury Secretary Steven Mnuchin, top Congressional Republicans were told the administration didn’t care for the GOP plan.

Namely, it reportedly pushed back at $25 billion in proposed new funds for testing and tracing, and the president is said to be pushing for the addition of a payroll tax break.

Amid these fresh challenges, the New Democrat Coalition in the House is calling for a federal commitment in a coordinated national recovery strategy that includes additional investments in testing, contact tracing and mitigation strategies; the establishment of national standards for safe operations for businesses, schools and other entities during a pandemic; and planning for how to deal with future health crisis based on what’s been learned during the current outbreak.

Rep. Suzan DelBene, D-Wash., the coalitions vice chair for policy coordination, said as Congress moves toward passing another COVID-19 relief package, lawmakers need to make sure they’re addressing “the most dire issues at hand.”

“More than 40 million have applied for unemployment insurance,” she said. “That’s a quarter of the U.S. workforce.”

“We need to make sure that businesses that have been economically hurt by the coronavirus pandemic can continue to keep workers on the payroll,” DelBene continued, noting that The HEROES Act passed by the House two months ago included a bill she introduced with Rep. Stephanie Murphy, D-Fla., to expand the Employee Retention Tax Credit.

“It enables businesses to keep workers on the payroll, rather than have them apply for unemployment benefits,” she said. “It also ensures workers and businesses are better positioned to resume their operations once the economic crisis caused by this pandemic comes to an end.”

Rep. Scott Peters, D-Calif., said the coalition is also pushing for the inclusion of automatic stabilizers in the new bill to both ensure the “duration of assistance meets the duration of the crisis” and also that just the right amount of money is expended on relief and recovery.

“Automatic stabilizers are the best policy and the best politics for the crisis,” Peters said.

“Right now, it appears there’s a battle going on between one side wanting $1 trillion for the next package and the other side wanting $3 trillion. But we don’t know how much we really need, neither side does … and it would be better for everyone if we pegged these grant programs to the actual economic conditions.

“It’s the same thing we learned from the Payroll Protection Plan,” Peters added. “We undershot during the first round of funding, needed a second round, and then we overshot. If you do automatic stabilizers, you would remove a lot of that uncertainty.”

Peters also spoke to the issue of how to unwind the relief and get the federal budget on a more sustainable footing once the pandemic is over.

“Over the course of this pandemic, there had been a recognition that this is an emergency, and that we shouldn’t get bogged down trying to identify offsets for all of these programs. There’s largely been bipartisan agreement on that. Now is not the time to turn off the faucet,” he said.

“At the same time, we have to acknowledge the need to address the nation’s long-term fiscal challenges. We have to make sure we tackle the debt and deficit issue when we get to better times.

“Whether it’s with a new level of transparency through a fiscal State of the Nation report, or a better debt ceiling target or through some other mechanism, when times get better, we will come together and address the issue in a serious way,” Peters said.

The New Democrat Coalition is a member caucus espousing pro-growth, pro-innovation and fiscally responsible policies. It now boasts 104 members, including 42 freshmen members elected in 2018.

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