Coronavirus aid talks bleed into Monday as deal momentum slows

Agreement to contain more money for small-business loans, funding for hospitals and testing

Natalie Brown, of Mt. Airy, Md., holds a sign in front of St. Anne's Episcopal Church in Annapolis, Md., during a demonstration to demand that GOP Gov. Larry Hogan lift restrictions that have closed businesses due to the spread of COVID-19. (Tom Williams/CQ Roll Call)
Natalie Brown, of Mt. Airy, Md., holds a sign in front of St. Anne's Episcopal Church in Annapolis, Md., during a demonstration to demand that GOP Gov. Larry Hogan lift restrictions that have closed businesses due to the spread of COVID-19. (Tom Williams/CQ Roll Call)
Posted April 19, 2020 at 11:18am, Updated April 20, 2020 at 12:29am

Negotiations were sputtering late Sunday on a package of nearly $500 billion in aid to small businesses and health care providers while expanding COVID-19 testing capacity, with some haggling left to be done over the measure's finer points.

Discussions were seen continuing into early Monday on a few remaining issues, such as whether the Centers for Disease Control and Prevention or National Institutes of Health should administer a new $25 billion virus testing program.

Multiple sources familiar with the talks, who weren't authorized to speak publicly, said beyond the testing provisions there were other open items and it wasn't clear how quickly a deal might come together. 

[Obama small-business chief says Democrats should act now on loan funds]

By late Sunday momentum had slowed considerably from earlier in the day. Treasury Secretary Steven Mnuchin, the administration's point man for the talks, and top Democratic leaders fanned out across the Sunday morning talk shows exuding optimism that they were on the cusp of a deal.

It wasn't immediately clear whether separate aid to states and localities, which President Donald Trump said earlier Sunday wouldn't be in the package, was definitely off the table. Top Capitol Hill Democrats and swing-state governors have been pushing hard for at least $150 billion in this aid round.

New York Gov. Andrew Cuomo, a Democrat, among others have been vocal about getting shortchanged in last month's $2 trillion relief bill. Senate Minority Leader Charles E. Schumer, D-N.Y., said earlier that money for states and localities was still in play. 

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Mnuchin, however, said it was not and Senate Majority Leader Mitch McConnell, R-Ky., assured GOP senators on an afternoon conference call that state and local relief wouldn't be in this bill.

At his Sunday press briefing, Trump said while state and local aid won't be in the package lawmakers will vote on this week, he supports providing more assistance in the next funding round. 

"Some states and local governments need it. I'm the first one to admit that," Trump said. "We're going to be saving that for another little bit of a later date. That will probably be in our next negotiation. I'm in favor of it."

In recent days Democrats on and off Capitol Hill have been putting the heat on Trump over state and local assistance given the importance of several key swing states to his electoral chances in November.

Democratic Govs. Gretchen Whitmer of Michigan, Tom Wolf of Pennsylvania and Tony Evers of Wisconsin wrote a joint letter to Trump last week urging federal aid, for instance. 

The three states are widely credited with delivering Trump's surprise 2016 victory, after backing the New Yorker by less than 1 percentage point. None of those states previously had voted for a GOP presidential candidate since the 1980s.

Senate Democratic aides touted the billions of dollars that would flow to those states and Ohio, another presidential bellwether, under their proposal for $150 billion in federal aid.

Later Sunday on MSNBC, Sen. Chris Coons, D-Del., a member of the Appropriations Committee, said the state and local aid issue hadn't been resolved. "That's what's been holding it up today," he said.

Schumer told CNN earlier Sunday that "we are continuing to push hard for that" in what Democrats are calling "interim" aid legislation, before another broader measure can be put together next month.

"It is so important," he said. Without additional money, local governments could be forced to lay off police, firefighters, bus drivers and more, he said. "This is not an abstract issue. We don't want them fired. They are as important as anybody else."

On Sunday afternoon, Speaker Nancy Pelosi updated House committee chairs during a conference call, saying that four to five items remained open in the negotiations, according to a Democratic aide.

Details emerge

Details of the emerging legislation were still under wraps. But according to sources familiar with the proposal, it would pump another $310 billion into the so-called Paycheck Protection Program, which provides small businesses with some two months' worth of loans that are forgivable if 75 percent is used to keep employees on staff.

Of the PPP funds, $60 billion would be earmarked for lending by smaller financial institutions.

And there would be another $60 billion or so put into the Small Business Administration's Economic Injury Disaster Loan program, which finances loans of up to $2 million directly to firms without a bank as the intermediary. Of that figure, at least $10 billion would be for grants worth up to $10,000 each that wouldn't need to be repaid, according to sources familiar with the talks.

The emerging deal could also include an additional $75 billion for hospitals and $25 billion to fund more testing for a pandemic that had killed nearly 41,000 Americans as of Sunday evening, according to data compiled by Johns Hopkins University.

All told, the price tag was inching up above $470 billion, with possibly more added including for SBA fees paid to lenders so more of the money could go directly to small businesses.

"I'm very hopeful we could come to an agreement tonight or early tomorrow morning," said Schumer, who also spoke on the CNN program. "Many of the things we have asked for on the banking side, on the testing side, on the hospital side, they are going along with, so we feel pretty good."

Enormous demand

The PPP ran out of money last week because of enormous demand. Congress had provided $349 billion for the program as part of last month's $2 trillion aid package, but the SBA burned through that funding far faster than expected.

While both parties support replenishing the fund, Democrats have blocked a Republican attempt to provide an extra $251 billion for the PPP only without addressing other priorities. Democrats said part of the money should be set aside for smaller businesses that lack access to big banks, and that more funding is needed for hospitals and state and local governments.

The Trump administration's willingness to include more money for hospitals appeared to help build bipartisan support for a deal. Democrats had sought an additional $100 billion for hospitals and could end up with $75 billion, according to Mnuchin. Similarly, Democrats had pushed for $30 billion to fund testing, and Mnuchin said there would be $25 billion provided.

And the White House appeared to be moving towards Democrats' demand to target $60 billion of the small-business loan money for smaller banks and credit unions that serve poorer communities.

"We want to make sure that it's reaching all of America's small businesses," Pelosi, D-Calif., said in an interview broadcast Sunday on ABC’s "This Week" program. "And we also want to make sure that it’s operating in a community where our police and fire, our doctors and nurses, our teachers are being compensated for and not fired."

House to return for vote

Even if a bipartisan deal is reached, passage becomes more complicated because Congress is in recess until at least May 4. The House and Senate can pass legislation this week in pro forma sessions, but it requires unanimous consent.

Early Sunday evening, House Majority Leader Steny H. Hoyer, D-Md., told lawmakers in a scheduling notice that a "recorded vote on the interim legislation is likely." He said the chamber could meet to consider the not-yet-released bill at 10 a.m. on Wednesday, but that the exact timing hadn't been set.

A senior House Democratic aide said earlier Sunday that the situation was "fluid" but that Democratic leaders expected at least one Republican to request a recorded vote, forcing leadership to bring a majority of members back to Washington.

Last month, an objection from Rep. Thomas Massie, R-Ky., forced House members to come back to Washington to ensure a quorum would be present so that the aid package could pass on a voice vote.

House Rules Chairman Jim McGovern, D-Mass., has briefed House Democrats on a plan for proxy voting, but it requires a vote to change House rules that any one member can object to passing by unanimous consent.

With leadership planning to bring members back to Washington to vote on the interim bill, they may also seek to hold a recorded vote on the rule change to allow proxy voting.

“It’s easier if we can have proxy voting,” Pelosi said on ABC. “But in order to have proxy voting, you have to vote to change the rules of the House to do that. And we’d rather do that in a bipartisan way.”

Lindsey McPherson contributed to this report.