Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin were nearing agreement on an economic stimulus package to combat the effects of the coronavirus pandemic but weren't close enough to be ready for a vote Thursday night.
After eight phone calls between the two, and several hours of meetings between Pelosi and top Democratic lawmakers, negotiations were set to continue into Friday.
“It’s fair to say we are close to an agreement subject to the exchange of paper and hope to have an agreement tomorrow," Pelosi, D-Calif., said late Thursday.
If a deal is reached Friday, the House would vote on the package later in the day. But senators left town for the weekend Thursday afternoon and can't take a roll call vote on the measure until Monday at the earliest. Despite guidance from state and federal health officials to limit travel amid the COVID-19 pandemic, many senators planned to go back to their states this weekend before returning to the Hill on Monday.
At the center of the negotiations is a dispute over paid leave provisions in the Democrats' initial bill. The legislation would require employers to let workers accrue seven days of leave that would apply in future public health emergencies, on top of an immediate 14 days of leave due to coronavirus-related work stoppages.
Republicans have been pressing to use the incentive of tax credits to employers rather than government mandates to make paid emergency and sick leave available to workers, according to multiple sources who spoke on condition they not be identified due to the sensitivity of the talks.
GOP negotiators also object to administering the paid leave program through the Social Security Administration. Under one proposal under discussion, that benefit could be moved to the jurisdiction of the Labor Department, two people with knowledge of the talks said.
In a letter to House Democrats late Thursday, Pelosi wrote that the measure being negotiated would provide 14 days of paid emergency leave and up to three months of paid family and medical leave, without specifying the mechanism.
She also wrote that Democrats had "defeated" a White House proposal to make some higher-income beneficiaries foot some of the coverage tab for COVID-19 testing; that higher Medicaid reimbursements to states and territories would be preserved in some form; and that food stamp work requirements, an administration priority, would be "waived for the duration of the public health crisis."
Pelosi said "one way or another" the House will vote on a package Friday, suggesting she was ready to put a bill on the floor even if all areas of dispute aren't resolved in time. She also said there will be other legislative opportunities to address issues left on the cutting room floor this time.
"We've resolved most of our differences and those we haven't, we'll continue to have conversations on, because there will obviously be other bills," Pelosi said.
Both chambers were scheduled to be on recess next week, but Senate Majority Leader Mitch McConnell, R-Ky., announced the cancellation of his chamber's planned recess via Twitter on Thursday afternoon. The House has not yet announced whether it plans to follow suit.
'Very reasonable' suggestions
Trump as well as House and Senate Republican leaders criticized the House bill as unworkable in its current form, in comments that suggested the potential for protracted negotiations.
Earlier Thursday, Pelosi said talks with Mnuchin had produced some "very reasonable" suggestions for changes to the bill. And Trump appeared to back off his insistence on an immediate, massive payroll tax cut that Democrats oppose and Republicans have been cool to, which could ease the path for a quick deal.
"That won't come immediately because that's a stronger measure, but we are looking to do that and I think at the right time Congress will probably go along with it," Trump said Thursday in remarks to reporters at the top of a meeting with Irish Prime Minister Leo Varadkar.
The Democrat-authored aid package would offer, in addition to paid sick leave, expanded food assistance, extended unemployment insurance, free coverage of coronavirus testing and increased federal funding for state and territorial Medicaid costs, among other things.
But Republicans said the bill would require too much bureaucracy and impose costs on businesses that could further damage the economy.
House Minority Leader Kevin McCarthy, R-Calif., said the bill “comes up short” on several fronts. He said the Social Security Administration would need six months to set up the proposed paid sick leave program, “so it won’t work in time” for those who need immediate help.
He also faulted the measure for requiring all businesses to offer “permanent” paid sick leave even when there isn’t any public health emergency. And he expressed concern about passing a temporary 8 percentage point increase in federal Medicaid funding to states without knowing what it would cost.
“These are such big items,” McCarthy said. “I just do not believe it would be smart on our part to rush that through.”
Trump argued the Democrats' approach was "not a good way for them to get some of the goodies they've been talking about for 25 years."
McConnell also criticized the House bill during a floor speech Thursday morning.
"The speaker's proposal would stand up a needless thicket of new bureaucracy," he said. "As currently drafted, their proposal appears to impose permanent unfunded mandates on businesses that could cause massive job losses and put thousands of small businesses at risk."
In a later tweet, McConnell said, "we do not need to choose between Speaker Pelosi's first draft and doing nothing."
But McCarthy joined the Trump administration in saying that he wanted to work with Democrats on a compromise measure. “I think we can get this done in 24 or 48 hours,” he told reporters at a news conference.
Pelosi said she was willing to consider changes, but would resist protracted negotiations that could take days to conclude. "We don’t need 48 hours,” she told reporters. “We just need to make a decision to help families right now.”
Pelosi said there will likely be other legislation down the road so Congress needs to act now on measures where there is agreement and revisit what went wrong in the response another time. "Save it for another day,” she said.
A White House official said the Trump administration supports many of the concepts in the House Democrats' bill, but not their implementing methods.
"The White House does not support much of what the speaker has proposed as currently drafted, but we do support many of the policies reflected in her draft, and are asking that they continue to work with us to find a bipartisan, bicameral agreement," the official said.
Democrats had already agreed to make some changes to the bill, outlined in a managers' amendment submitted by House Appropriations Chairwoman Nita M. Lowey, D-N.Y.
The changes would clarify that reimbursements for uninsured COVID-19 testing at diagnostic laboratories can't cover individuals receiving other testing assistance in the bill, and that Medicaid coverage only applies to COVID-19 tests, as well as tighten exemptions from work search and other state unemployment assistance rules.
'Probably a good thing'
Sitting alone in the Rules Committee hearing room after the panel initially recessed Thursday morning without taking up the stimulus rule, Chairman Jim McGovern, D-Mass., said he didn't know when they might reconvene. He said "that's probably a good thing," since it indicates that Pelosi and Mnuchin were talking.
Earlier in the hearing, Rep. Ed Perlmutter, D-Colo., suggested that the bill could be amended in the Senate with changes acceptable to both sides and the House could take it up next week by unanimous consent if necessary.
Rep. Joseph D. Morelle, D-N.Y., said during the initial Rules meeting that while the quick process hasn't been ideal, it was important to act now because Senate Republicans haven't offered an alternative. "Given the state of play as we find it, which is little coming from the other side of the building, I think it’s important that we demonstrated leadership," he said.
Doug Sword, Paul M. Krawzak, Lindsey McPherson and Niels Lesniewski contributed to this report.