Coronavirus relief deal remains elusive — what are the biggest sticking points?
The chance that Congress passes a coronavirus relief deal before the November elections remains elusive as House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin continue to spar over how much money to inject into the pandemic-ravaged economy.
Late Saturday night, Pelosi set a 48-hour deadline for the White House to reconcile differences in stimulus negotiations "to demonstrate that the Administration is serious about reaching a bipartisan agreement," a top aide tweeted.
During an interview on ABC's "This Week," Pelosi clarified the deadline only applies to being able to get a deal done before Nov. 3. She said she was "optimistic" about the negotiations, but maintained that a breakthrough hinges on the Trump administration.
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Mnuchin and Pelosi are expected to speak by phone on Monday afternoon, as Senate Majority Leader Mitch McConnell plans to force a re-vote on a slimmed-down stimulus bill that includes another round of funding for a key small business rescue program, money for schools, liability protections for businesses and boosted unemployment benefits.
But the Republican bill has failed before, and President Trump is also now pushing for a more expensive spending deal, telling FOX Business' Stuart Varney last week that he would "absolutely" go above $1.8 trillion.
"I would go higher," the president said. "Go big or go home, I said it yesterday."
The Trump administration's latest $1.8 trillion proposal -- its largest yet -- drew criticism from both Republicans and Democrats last week, dimming the odds of another round of emergency aid before the Nov. 3 election. It was expected to include a second round of direct payments of up to $1,200 for adults and $1,000 for children; expanded unemployment benefits at $400 per week and additional funding for state and local governments.
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Although Democrats and Republicans broadly agree that another bill is necessary to aid the economy's recovery, they sharply disagree over the size and scope of it. These are the biggest points of contention between the two parties.
Arguably the biggest sticking point is how much the aid package should cost.
House Democrats passed a $2.2 trillion proposal, down from the roughly $3.4 trillion HEROES Act.
But Republican leaders want to keep the price tag closer to $1 trillion amid growing concerns among some lawmakers over the nation's ballooning deficit, which is projected to hit a record-shattering $3.3 trillion this year, according to the Congressional Budget Office.
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Asked about the possibility of a deal that costs somewhere between $1.8 trillion and $2.2 trillion, McConnell last week said: “I don’t think so. That’s where the administration is willing to go. My members think half a trillion dollars, highly targeted, is the best way to go."
Money for testing and contact tracing
Democrats have pressed the White House for more funding and a more detailed plan on COVID-19 testing.
In a Sunday letter to House Democrats, Pelosi accused administration officials of refusing to commit funding for a national coronavirus testing and contact tracing program.
"These changes make the funding a slush fund for the Administration which 'may' grant or withhold rather than a prescribed, funded plan to crush the virus," she wrote. "It is important to note the impact in terms of the disparity facing communities of color: a Latino child is eight times more likely to have to go to the hospital because of COVID-19 than a white child, and a Black child is five times more likely."
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Aid for state and local government
The two sides are at odds over whether state and local governments should receive funding in the next relief package -- and if so, how much.
The revived legislation that Senate Republicans will vote on this week, which costs about $600 billion, contains no funding for state and local governments.
During meetings in August, Mnuchin said the administration offered $150 billion more in funding.
But Democrats rejected that offer, contending that without more federal funding, state and local governments -- which combined employ about 23.2 million essential workers -- will be forced to lay off employees and cut essential services. Republicans have argued it's a "blue state bailout" for governments they say were languishing financially before the pandemic hit.
"We're not going to bail out cities that have been poorly run for a long time," White House chief of staff Mark Meadows previously told FOX Business.
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One estimate from Moody's Analytics found that 4 million jobs are at risk if state and local governments do not receive at least $500 billion in funding over the next two years.
Democrats have insisted the next relief package includes the expansions of the earned income tax credit and child tax credit, which are intended to help low- and middle-income households.
The $2.2 trillion proposal passed by the House earlier this month would increase the eligibility and amount of the earned income tax credit for childless workers in 2020. Workers could use their 2019 income to claim the credit, preventing workers who lost their jobs from receiving a smaller credit this year.
The measure would also make the child tax credit fully refundable for 2020.
But the White House has not expanded those tax credits; instead, it called for direct stimulus payments of up to $1,200 per adult and $1,000 per child -- an increase from the $500-per-child proposal in earlier proposals.
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"Children are further affected negatively in the White House’s refusal to expand the Child Tax Credit, Child and Dependent Tax Credit, and the Earned Income Tax Credit, while continuing tax benefits for some of the wealthiest in America," Pelosi wrote in her letter, adding: "Our proposal would reduce childhood poverty significantly."
Another point of contention is whether to extend the federal $600-a-week boost in unemployment aid for the millions of laid-off Americans.
Democrats have maintained the sweetened benefits need to be extended through the end of the year, while Republicans have argued that it disincentivizes Americans from returning to jobs that pay less, a notion economists have disputed.
President Trump bypassed Congress and on Aug. 8 signed an executive measure partially restoring the aid at $300-a-week (states can choose to chip in an additional $100, although most have said they cannot afford to do so). However, those benefits are beginning to lapse.
The average state unemployment benefit is about $330 per week.
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