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Mnuchin Virus Relief Plan Includes More State, Local Funds; House Delays Vote

October 1, 2020by Lindsey McPherson and David Lerman, CQ-Roll Call (TNS)
U.S. Treasury Secretary Steve Mnuchin (C) departs after a meeting with House Speaker Nancy Pelosi (D-CA) and Senate Minority Leader Chuck Schumer (D-NY) on Capitol Hill in Washington on August 5, 2020. (Yuri Gripas/Abaca Press/TNS)

WASHINGTON — Treasury Secretary Steven Mnuchin offered a $1.62 trillion COVID-19 relief proposal in talks with Speaker Nancy Pelosi on Wednesday, offering more state and local assistance than GOP negotiators have to-date in a sign of potential progress toward a deal.

A person briefed on Mnuchin’s plan said it included $250 billion for state and local governments, which is $186 billion less than Democrats want in their latest $2.2 trillion package, but $100 billion more than the White House offered in talks that broke down over the summer.

Meanwhile, House Democratic leaders postponed a vote on their own coronavirus relief package late Wednesday amid growing optimism about striking an 11th-hour bipartisan deal that could deliver new relief before the Nov. 3 elections.

Mnuchin’s proposal includes a $400 per week federal benefit for unemployment insurance, retroactive to Sept. 12 and lasting through Jan. 1, 2021, according to the source, who described the package on condition of anonymity. That’s less than the $600 a week Democrats want, but $100 more than Senate Republicans have proposed.

Mnuchin presented his offer to Pelosi at the Capitol on Wednesday afternoon during a 90-minute meeting; the discussion broke up without a deal, but the two principals agreed to continue negotiations Thursday.

A few hours later Democratic leaders announced they would delay voting on their $2.2 trillion bill until at least Thursday.

“The speaker thinks there’s a possibility of getting a deal,” House Majority Leader Steny H. Hoyer told CQ-Roll Call after a lengthy meeting with Pelosi.

“If we have a deal, yes, we may well do that,” the Maryland Democrat said when asked if the House would be willing to wait several days to vote if there’s a bipartisan agreement that needs fine tuning into legislative text. “But if we don’t have a deal, then we’re going to move the bill.”

Mnuchin briefed Senate Majority Leader Mitch McConnell after meeting with Pelosi Wednesday. According to the source who described Mnuchin’s offer, McConnell signaled he could begrudgingly get enough votes to pass the plan Mnuchin laid out if Democrats sign off on it.

It’s unclear if McConnell could sell anything higher than what Mnuchin has offered to a GOP conference that’s been reluctant to spend even $1 trillion on a new aid package, or provide any additional funds for state and local governments.

“We’re not going to do a $2.2 trillion deal,” Mnuchin said Wednesday night on Fox Business. “The president instructed us to come up significantly, so we have come up from the trillion-dollar deal that we were working on earlier.”

Mnuchin described the latest White House offer as in the “neighborhood” of $1.5 billion; if a rescission of unused Paycheck Protection Program funds were included, that would bring the net cost of Mnuchin’s plan down to that level.

There are no automatic boosters in the plan that would inject another round of aid into the economy early next year if more progress containing the virus hasn’t been made, however. That was a key proposal in the Problem Solvers Caucus bipartisan $1.5 trillion plan, which Mnuchin said earlier Wednesday he’d modeled his approach on.

If the parties can resolve the state and local and unemployment insurance divisions, the gaps in other areas will likely be easier to bridge.

For example, Mnuchin increased the GOP offer on education funding to $150 billion. Democrats are at $225 billion. Both parties started with around $100 billion for education earlier in the negotiations, but there’s general agreement needs have increased as schools across the country at are different phases of reopening for in-person learning.

Pelosi has talked frequently about the need for more money to expand COVID-19 testing and tracing, saying Republicans’ prior offer of $16 billion was a significant underestimate of the demand. Mnuchin’s offer matches Democrats’ $75 billion demand, a significant concession.

Mnuchin’s total offer on health care is $175 billion, which in addition to the testing money includes $50 billion for vaccine production and distribution and $50 billion for health care providers, including hospitals.

Democrats’ bill would provide the Department of Health and Human Services with a total of $249 billion for those and other needs.

Mnuchin also appears to match Democrats’ latest offer on food assistance with $15 billion for the Supplemental Nutrition Assistance Program and nutrition aid for low-income women, infants and children.

The parties are also getting closer on direct aid for the U.S. Postal Service after a massive disagreement over the summer on the cause of operational delays. Democrats dropped their $25 billion demand to $15 billion in their latest bill, and Mnuchin is offering $10 billion.

As in earlier negotiations, both parties are still interested in sending another round of direct payments to low-income Americans, with general agreement on $1,200 for adults and $500 for dependents. They also both agree generally on the terms of expanding the employee retention tax credit, which was part of the March coronavirus relief law.

As the meeting between Pelosi and Mnuchin was taking place Wednesday afternoon, White House chief of staff Mark Meadows told reporters: “I’ve seen substantial movement, yes, and certainly the rhetoric has changed.”

In earlier rounds of talks Democrats had pointed to Meadows, a former leader of the hard-charging conservative House Freedom Caucus during his tenure in Congress, as an obstacle to getting a deal.

McConnell also cast doubt on prospects for an agreement. While talks continue, he told reporters, “We’re very, very far apart.”

Asking Senate Republicans to approve up to $2.2 trillion, he said, “is outlandish.”

Senate Majority Whip John Thune, R-S.D., echoed that view, saying anything exceeding a roughly $1 trillion series of bills offered by Republicans in July risks an erosion of GOP support.

“As the price goes up, the Republican vote total goes down,” Thune said.

Even as they had been preparing their own bill earlier Wednesday, Democratic leaders stressed the measure was designed to stake out a negotiating stance and did not preclude bipartisan talks from proceeding.

“If we do this bill, that does not mean negotiations are over,” Majority Leader Steny H. Hoyer, D-Md., told reporters. “What I told members today is keep their schedules flexible.”

Both parties have been itching for a new round of pandemic relief before lawmakers go home to campaign for reelection. And political pressure for a deal has been steadily mounting.

Gross domestic product declined in the second quarter at an annualized rate of 31.4 percent, the Commerce Department said Wednesday. Disney announced plans to lay off 28,000 workers from its theme parks.

But negotiators have struggled for months over the size and shape of a new aid package, particularly over aid to state and local governments. Democrats say robust aid is needed to avoid mass layoffs, while Republicans say they don’t want to bail out poorly managed states.

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CQ-Roll Call’s Jennifer Shutt and Paul M. Krawzak 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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