To try to resolve some issues, top administration officials arrived Tuesday on Capitol Hill to begin negotiations. Some of President Trump’s priorities in the next coronavirus spending package were met with bipartisan resistance. Numerous Senate Republicans have dismissed certain White House demands, such as a payroll tax cut, with the second-ranking GOP senator referring to the idea as only likely to survive in a “first draft.”
Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows are serving as the White House’s chief negotiators. White House officials said they want to keep the package around $1 trillion — although White House press secretary Kayleigh McEnany on Tuesday declined to commit to a hard, trillion-dollar cap — but Democrats have said they are targeting a much more substantial plan modeled after the $3 trillion Heroes Act that they passed in May.
But before pivoting to negotiate with demands from Democrats, Mnuchin and Meadows were trying to quell a revolt from within the Republican Party.
They sat down with key Senate GOP appropriators and committee chairmen in the late morning to discuss Republican concerns about a White House push to cut new funding for testing, tracing and the Centers for Disease Control and Prevention. White House officials have also expressed opposition to extending more aid to states and cities, an issue that has split Republicans.
The two White House envoys also plan to attend the Senate Republican conference lunch and meet separately with Pelosi and Senate Minority Leader Charles E. Schumer (D-N.Y.). White House economic adviser Larry Kudlow is also expected to stop by the GOP lunch on Capitol Hill.
“We will begin our conversations today. It is my hope that we can resolve our differences and have a bill by the end of next week,” Pelosi told fellow Democrats on a conference call Tuesday morning, according to a person on the call who spoke on the condition of anonymity because they were not authorized to discuss internal conversations.
Enhanced unemployment benefits expire for millions of Americans at the end of next week, and the two parties are divided over what to do about it.
“We’re shooting to get something done by the end of next week,” Mnuchin told reporters as he entered his first meeting. “I’ll be here for the next two weeks until we get this done.”
There has been little GOP enthusiasm for the payroll tax cut plan, even though Trump has said he might not sign a bill that doesn’t include it. And GOP leaders are expecting a hard sell Tuesday but appear unwavering. Only a small handful of Senate Republicans — including Sens. Lindsey O. Graham (S.C.) and Steve Daines (Mont.) have endorsed the payroll tax cut as a sound policy.
“His advocates — Mnuchin and Meadows and others — I think will probably try and ensure that it’s at least included in the first draft, let’s put it that way,” Sen. John Thune (R-S.D.) told reporters. “I just think it’s, in the end, it’s all going to come down to … consensus and where the votes are, and there are a lot of Republicans who don’t like it, for a lot of different reasons.”
Senate Majority Leader Mitch McConnell (R-Ky.) gave some details of the emerging GOP plan Tuesday in remarks on the Senate floor.
He said it would include $105 billion to help schools reopen, another round of funding for the Paycheck Protection Program for small businesses, more stimulus checks to individual Americans, incentives for hiring and retaining workers, and reimbursement for businesses to establish safety measures.
“The American job market needs another shot of adrenaline,” McConnell said. “Senate Republicans are laser-focused on getting American workers their jobs back.”
McConnell did not, however, mention a payroll tax cut as part of the package.
Pressed by reporters about this omission, McConnell said, “We’re all going to be discussing it, as you know the secretary of the treasury is coming up for lunch and we’re all going to see if we can get on the same page.”
Mnuchin on Monday evening had told reporters that the payroll tax cut was already in the bill.
Asked Tuesday if they might have dropped the payroll tax cut, Mnuchin replied, “Of course not.” He did not respond to a reporter who followed up by pointing out that the proposal has next to no support among Senate Republicans.
Thune later told reporters that another round of direct stimulus payments provided a greater benefit to consumers than the payroll tax cut. “We’ll see what it looks like, but if it’s a choice between checks and a payroll tax cut — I think it’s pretty clear the checks have a more direct benefit to the economy,” Thune said. “Consumers are more likely to spend a check they get in the mail than a slight plus-up that gets automatically deposited in their bank accounts in the fourth quarter of the year.”
Trump has already enacted four laws that provided close to $3 trillion in new tax cuts and spending to try to help the economy and health-care industry navigate the coronavirus pandemic. The economy remains really weak, however, with an unemployment rate of 11.1 percent and roughly 20 million people collecting unemployment benefits. Lawmakers are split over what to do next. When he was heading into a meeting with Senate appropriators, Meadows was asked about the highest price tag they could agree to.
“Obviously everybody looks at a trillion-dollar stimulus plan as the goal, but that’s going to be up to the senators and the House,” Meadows said. “It’s gonna be a Senate- and House-led process.”
After delaying discussions for weeks, the White House is now trying to rush talks in part because more than 20 million Americans are slated to receive their final expanded unemployment check at the end of this week before the program expires. More than 1 million Americans have filed new unemployment claims each week for the past three months.
So far, Senate Republican leaders have agreed to include some of Trump’s priorities in the proposed legislation, though support wavered fast. Trump has insisted on including a payroll tax cut in the bill, which he has said will allow Americans to retain more of their earnings. Democrats and Republicans remain cool to that idea, though, in part because it would not address the people who aren’t working.
In addition to the White House’s recent push to withhold new money for testing and the CDC, some Republicans have expressed opposition to the White House’s push to tie new education funding to decisions by school districts about reopening classrooms in the fall.
On testing, McEnany said Tuesday that the White House is seeking “targeted” money, saying that “we’re willing to put in money for targeted testing that makes sense, not just dumping money into a pot that contains $10 billion.”
There are some areas of agreement, however.
Both the White House and Democrats have called for another round of stimulus checks, although they have not reached agreement on the size of these checks or who would get them. They have also agreed that there should be some extension of emergency unemployment benefits that were authorized in March, although House Democrats have called for continuing the $600 weekly payment through January, and White House officials and Republicans have proposed cutting the benefits back markedly.
At her briefing Tuesday morning, McEnany cited the payroll tax cut, stimulus checks and some level of expanded unemployment insurance as priorities for Trump. “We’re looking at all of that, and we would like that see all of that” in a final package, she said.
In his own floor speech Tuesday, Schumer demanded hazard pay for workers and an extension of the unemployment benefits, and he slammed Republicans for considering a payroll tax cut. Schumer also pushed education legislation written by Sen. Patty Murray (D-Wash.) but declined to comment on McConnell’s proposal for school funding until more details become available.
“The Trump administration is fixated on a payroll tax cut, an idea that will not only harm those who rely on Social Security but will do nothing for the tens of millions of Americans who have lost their jobs during the crisis,” Schumer said. “Many of my Republican colleagues aren’t too keen on that idea, with good reason. And yet it still may be in McConnell’s proposal because he and the other Republicans are afraid to tell President Trump no.”