Senate GOP to begin talks with Dems on trillion-dollar coronavirus package

By John Bresnahan and Marianne LeVine

Senate Majority Leader Mitch McConnell introduced the text of the Republicans’ trillion-dollar proposal for the so-called “Phase 3” coronavirus stimulus package, paving the way for negotiations with Democrats to formally begin.

The centerpiece of the Senate Republican proposal — crafted with support from the White House — is a direct payment to qualified Americans of up to $1,200. Married couples could get $2,400. Taxpayers who earn more than $75,000 annually will begin to see that payment reduced by $5 for every $100 they earn over the $75,000 threshold, with those who make more than $99,000 getting nothing. Families with children would get $500 per child.

While a Treasury Department outline circulated earlier in the week had called for two payments from the IRS — one each in April and May — the Senate GOP proposal only calls for one check at this time.

The GOP plan also outlines provisions to give small businesses $300 billion in federally guaranteed loans, moves back the income tax-filing deadline from April 15 to July 15, provides numerous tax cuts for corporations, and authorizes more than $200 billion in financial support for hard-hit industries such as airlines.

McConnell said he would direct a number of Senate GOP chairmen and senior Republicans to hold talks with their Democratic counterparts, including Finance Committee Chuck Grassley of Iowa, Banking Committee Chairman Mike Crapo of Idaho, Health, Education, Labor and Pensions Committee Chairman Lamar Alexander of Tennessee, Small Business Committee Chairman Marco Rubio of Florida and Majority Whip John Thune of South Dakota.

Treasury Secretary Steven Mnuchin, National Economic Council Director Larry Kudlow, and White House Director of Legislative Affairs Eric Ueland will also be part of the talks.

McConnell said the bipartisan discussions would begin Friday morning, and he vowed they would continue until a deal is reached.

"These are urgent discussions and they need to happen at the member level, starting now," McConnell said on the floor as he introduced the 247-page proposal. "This legislation is a significant next step. And the Senate is not going anywhere until we take action."

Senate Democrats have outlined their own $750 billion emergency plan that would expand paid family leave, pick sick leave and unemployment insurance.

Senate Minority Leader Chuck Schumer (D-N.Y.) immediately complained Democrats "had virtually no impact" in drafting the proposal. Schumer further faulted Republicans for giving a "bailout for a number of industries.

"We don't want these industries to go under, but we don't want the dollars that are put there to go to corporate executives or shareholders," Schumer said. "Again, they mus go to workers first." Schumer doesn't want companies that lay off employees to receive government aid, and he wants restrictions on stock buybacks.

Schumer noted that McConnell has refused to engage Speaker Nancy Pelosi (D-Calif.) and House Democrats as well, which will make it more difficult to achieve a bicameral compromise.

Schumer and Pelosi issued a statement following release of the GOP proposal: “To earn Democratic support in the Congress, any economic stimulus proposal must include new, strong and strict provisions that prioritize and protect workers, such as banning the recipient companies from buying back stock, rewarding executives and laying off workers."

McConnell has faced some opposition from Senate Republicans over the direct payments plan, although White House officials tried to dismiss those complaints as not substantial.

Yet for once, McConnell isn't controlling each aspect of crafting a major piece of legislation put together on the fly, an unusual position for him. McConnell — as good a vote counter as the Senate has ever seen — usually figures out what the goal is first, and then he steers his colleagues toward that goal. Not in this case, though.

Sen. Lindsey Graham (R-S.C.) has been the most vocal opponent, despite support for the effort - so far - from President Donald Trump, Mnuchin and other senior administration officials.

Graham told Senate Republicans on Thursday that he had called Trump to lobby against the plan, adding that Rep. Mark Meadows (R-N.C.) — soon to take over as White House chief of staff — agreed with him.

"Direct payments make sense when the economy is beginning to restart. It makes no sense now cause it's just money," Graham told reporters. "What I want is income, just not one check. I want you to get a check every week, not just one week."

Graham, like some other Republicans, wants to beef up the unemployment insurance system instead, as well as boosting loans for small businesses..

"I personally think if we're going help people we ought to direct the cash payments maybe as a supplement to unemployment, not to the people that are still working everyday," said Senate Appropriations Committee Chairman Richard Shelby (R-Ala.). "Just a blanket cash check to everyone in America who is making $75,000... I don't know the logic of that. I could see tying it to unemployment, maybe boosting it for people who are going be laid off for a while."

Shelby, however, cautioned that he wasn't saying he'd vote against the proposal, just that he didn't like it.

Jim Lankford (R-Okla.) said he had a "lot of questions of how this works, who gets and who doesn't." Other Republicans raised similar concerns, although they were cautious in their opposition."

But White House officials privately believe that Senate Republicans will fall in line with Trump if he pushes the cash payments proposal. A senior administration official noted Graham has already expressed his opposition to direct payments.

"We're all going to have to vote for something that in another environment we wouldn't support," said Sen. John Kennedy (R-La.).

McConnell, speaking on the Senate floor Thursday afternoon, outlined the Republican proposal to assist small businesses by providing federally guaranteed loans; direct cash payments, as well as lending to industries such as the airlines that are hit hard by the coronavirus. In addition, Republicans are looking to get more resources for the health care system, which could be overloaded as the virus continues to spread throughout the U.S.

“Our proposal will immediately help American workers, families, and businesses,” McConnell said of the plan, known as “Phase 3.” “Yes, it will help position our economy to thrive once again after this public health menace is behind us … Fundamentally, we have to beat back this virus.”

But the package will need support from at least seven Senate Democrats if all Republicans back it. Schumer emphasized Thursday that Democrats, who have outlined their own vision, will pursue a “workers first” proposal and called for a “Marshall Plan” for the health care system. He also called for a new form of unemployment insurance.

Schumer has stayed in close touch with Mnuchin, who is leading negotiations for the Trump administration, about the third stimulus package, as well as Pelosi.

The minority leader also called for “four corner” negotiations between party leaders in the Senate and the House, but McConnell has shown no interest in involving the House.

In preparing the “Phase 3” package, McConnell has directed task forces to come up with proposals. Rubio and Susan Collins (R-Maine) are suggesting giving small businesses forgivable loans, which would be administered by a bank, credit union or some other type of lender.

According to a draft discussion of the small business proposal, obtained by POLITICO, the maximum small business loan the government could back would double to $10 million from $5 million through the end of the year.

McConnell emphasized earlier Thursday that the proposals are not “bailouts.”

“From small businesses to key sectors, we are not talking about so-called ‘bailouts’ for firms that made reckless decisions,” McConnell said. “Nobody is alleging a moral hazard here. None of these firms — not corner stores, not pizza parlors, not airlines — brought this on themselves.”

The third stimulus package comes after the Senate passed Wednesday a multi-billion dollar House-passed emergency aid package. While some Republicans had expressed reservations about the package's paid sick leave provisions, the final vote tally was 90-8.

House Democrats are drafting their own stimulus package with extensive financial protections — including direct monthly payments of as much as $2,000 for adults; grants and debt relief for small businesses; and measures to halt evictions and foreclosures.

Democrats would also enforce strict rules on businesses that receive federal cash, such as maintaining payroll, upholding collective bargaining rights and no stock buybacks.

Pelosi and committee leaders laid out the details of the plan — which is still taking shape — on a more than two-hour conference call on Thursday.

Separately from the economic relief measures, House Democrats are also pushing for between $120 billion and $150 billion in cash for federal agencies. Much of that would trickle down to state and local authorities, which have been struggling to meet public health and economic demands amid the outbreak.

Democrats say Congress may have no choice but to dole out the funds on the third package, instead of waiting for a fourth, because it’s unclear how much longer both chambers will be able to meet in person.

Sarah Ferris contributed to this story.