(Bloomberg) -- Treasury Secretary Steven Mnuchin and Senate Democrats are pushing to expand the Senate GOP’s economic rescue plan to respond to the coronavirus pandemic, continuing negotiations into the weekend on a package expected to exceed $1 trillion.
Senate Majority Leader Mitch McConnell said he wanted to finalize an agreement by Friday, but the Republican and Democratic senators working out the details called it a night without a final deal. They promised to return Saturday to continue talks, with the goal to vote Monday.
Senate Democratic leader Chuck Schumer wants an expanded package that would spend far more on workers and on responding to the health care crisis, while Mnuchin wants more to bolster the economy, including direct payments to more Americans, according to people familiar with his thinking.
“Both sides have issues that they have to go back and check on” with their parties, Oregon Democratic Senator Ron Wyden said Friday night. “We’re going to be here early tomorrow morning.”
White House legislative liaison Eric Ueland told reporters at the Capitol that negotiators made progress the provisions regarding unemployment insurance and some of the other sticking points.
“This is not a situation where we are claiming a deal tonight,” Ueland said, adding that there is broad consensus on the need to act quickly. “We’re going to persevere tomorrow.”
The legislation will be the third measure from the U.S. Congress to soften the economic blow from the coronavirus that has swept the globe, sent markets plunging and constricted much of the world’s economy. Even as Democrats rejected the Republican draft bill released Thursday, lawmakers of both parties recognized the need to act quickly with a massive infusion of federal money into a U.S. economy that has ground to a halt.
“We’re talking about a bill that at minimum is a trillion dollars,” Ueland said earlier Friday. “I understand the potential for the deficit impact. But the deficit impact is not a barrier to the need to act on behalf of the American people.
President Donald Trump, at a White House briefing, indicated he’d be willing to come back to Congress again for another round of stimulus if necessary.
“I want to get workers money,” Trump said, adding if there’s not enough money in this round of stimulus, “we’ll do something later, I’m sure.”
The impact of the virus is roiling markets worldwide. The S&P 500 Index tumbled to its lowest in three years, ending the week down 15%. The European Union said the recession this year may be as bad as 2009, and Goldman Sachs warned the U.S. economy may shrink 24% on an annualized basis in the second quarter.
McConnell and Schumer have each proposed their own sweeping plans that four groups of senators spent much of Friday trying to reconcile. Schumer spoke with Trump Friday, and both Schumer and House Speaker Nancy Pelosi spoke several times with Mnuchin.
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The GOP proposal includes tiered tax rebates of as much as $1,200 for middle-income individuals, $208 billion worth of loans for companies suffering because of the coronavirus pandemic and another $300 billion dedicated to smaller businesses.
Mnuchin has proposed two $1,000 checks at a cost of about $500 billion -- substantially more generous than McConnell’s bill. Those direct payments wouldn’t be based on income level, as in the GOP proposal.
Lawmakers on Friday were nearing an agreement to give low-income individuals the full tax rebate, rather than the smaller amount in the GOP version, according to multiple people familiar with the talks. They also were close on an increased unemployment insurance, a central Democratic ask. The two issues appear to be intertwined, and final numbers for the emergency benefits will in part depend on what feedback negotiators receive from other senators, as well as the administration and potentially House leadership.
The House of Representatives, meanwhile, remains out of session. With Pelosi working through Schumer, the main negotiating in the Capitol this weekend will be senator to senator.
Schumer initially said the Republican proposal doesn’t go far enough and “it is not at all pro-worker and instead puts corporations way ahead of workers.”
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A major sticking point is a Democratic demand for additional emergency funding to states. Ueland told reporters that he estimates states have an aggregate of $50 billion in rainy day funds. But certain states, like Illinois, have precarious debt or budget situations like to be exacerbated by the sudden drop in economic activity.
Democrats also are seeking to add aid for hospitals and other health-care facilities that are increasingly burdened by patients with the virus.
On Friday evening, three Senate Democrats -- Chris Murphy of Connecticut, Chris Van Hollen of Maryland and Jeff Merkley of Oregon proposed $600 billion in grants and loans to small and medium-sized businesses -- double what McConnell requested.
Smaller businesses would get grants from the Treasury to cover expenses, which could convert to loans if they fail to meet requirements.
‘Not So Far Away’
In Schumer’s earlier phone conversations with Trump, he urged the president to immediately use the Defense Production Act to get ventilators and other important equipment. Trump said at the White House briefing that he was doing that.
Schumer also brought up several of the Democratic priorities and Schumer’s office characterized Trump as willing to listen.
Schumer and Trump also agree on prohibiting stock buybacks of companies getting aid -- something Trump has now publicly endorsed -- and Schumer also wants to prohibit layoffs, increasing executive pay or cutting salaries.
Asked at the White House briefing whether he and Schumer are on the same page, Trump responded, “We’re not so far away.”
Ueland on Friday said the negotiations between Republicans, Democrats and the White House can’t go on forever because staff members will have to actually write the bill so that it can be voted on Monday.
“With the way the schedule is now accelerated in the Senate, the Senate needs to begin drafting legislative text, and they’ll turn to that next,” he said.
“Obviously Republicans have some ideas, Democrats have others but that’s the way the system works. We’re trying to put them together today,” Republican Senator Lamar Alexander of Tennessee said.
The U.S. Chamber of Commerce praised the bill as a good start but was planning to send a letter to Congress suggesting a program for loans to mid-size and larger employees, Chief Policy Officer Neil Bradley told reporters on Friday.
Bradley outlined a program for businesses of more than 500 employees that have revenue losses of at least 10% due to the virus. The loans would be federally guaranteed and paid back over five years, and a portion would be forgiven for maintaining a certain level of head count.
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