Senate Republicans were preparing to unveil a $1 trillion-plus coronavirus relief package amid an unwelcome jump in weekly jobless claims Thursday.
It wasn't immediately clear when the series of bills would be rolled out, though GOP senators were preparing floor speeches to start talking up their provisions.
The package so far reflects hard-fought compromises with the Trump administration, though the really tough slog lies ahead in negotiations with Democrats, who have sought as much as $3.5 trillion — a figure that may have grown since they unveiled their plan in May.
The series of GOP-drafted bills won't include a payroll tax break sought by President Donald Trump, for instance, as Treasury Secretary Steven Mnuchin confirmed to CNBC on Thursday morning.
"It won't be in the base bill," Mnuchin said. "Let me be clear: We think the payroll tax cut is a very good pro-growth policy, but the president's focus is he wants to get money into people's pockets now, because we need to reopen the economy."
But in a concession to the president, the measure would double a tax deduction for business meals from 50 percent to 100 percent, a priority for Trump since at least March, after he reportedly met with several restaurant executives who pitched the idea to him.
It wasn't entirely clear that provision — made notorious by the proliferation of "three-martini lunches" in the 1980s —would make it into the package Republicans officially release, however. "If it's proposed, I'm opposed to it," said Senate Finance Chairman Charles E. Grassley, R-Iowa.
Sen. Tim Scott, R-S.C., who's been pushing the expanded meals deduction, said he's "optimistic" it'll be included. "It's still percolating," he said.
The package would put some strings on aid to schools by making $30 billion of the education money only available to schools that physically reopen this fall. An additional $10 billion set aside for education would be earmarked for private schools. Those provision are likely to draw the ire of Democrats and teachers' unions.
There's a concession to fiscal hawks concerned about the proliferation of debt since the pandemic began, by including legislation that would set up "rescue committees" charged with overhauling the trust funds that finance Medicare, Social Security and highway construction.
Republicans didn't include any additional direct aid to states and localities, though they'd make the earlier March round of $150 billion more flexible, with certain strings attached. And there's nothing to extend protections against evictions and foreclosures, which Democrats say could lead to a spike in homelessness this summer and fall.
But there are several areas of potential common ground between the parties, including expanded funds for vaccine research and testing, help for seniors on Medicare and child care, including letting parents with workplace Flexible Spending Accounts carry over balances to next year rather than lose all of their unspent money.
The package will include direct payments to households and an extension of expanded unemployment insurance that expires July 31. Details hadn't been locked down in a summary circulating Wednesday night, but Mnuchin told CNBC the measure would aim for roughly 70 percent of pre-coronavirus wage replacement.
Mnuchin told reporters later that there wouldn't be a temporary extension of the $600 weekly benefit that's set to lapse. White House Chief of Staff Mark Meadows said he was working with the Treasury and Labor Departments on technical fixes to ensure no disruption in benefits after the current provision expires.
Direct payments would be "exactly the same" as in the $2 trillion March aid package, Mnuchin said, and could be distributed as early as August. The prior law provided $1,200 per individual, phasing out above $75,000 in adjusted gross income.
Below is an overview of what CQ Roll Call has learned could be included in the package. Senate Majority Leader Mitch McConnell plans to roll it out as a series of bills that could eventually be put together into one. The details were still being worked out and subject to change, however.
The package will include nearly $303 billion in supplemental funding, with $235 billion under the purview of the Labor-HHS-Education Appropriations Subcommittee. The breakdown is as follows:
- $105 billion for education; $70 billion of that would go to K-12 schools, with $30 billion for schools that reopen and $10 billion for private schools. An additional $29 billion would be for colleges and universities, and $5 billion would be for a flexible fund that governors could distribute.
- $26 billion for vaccine research, distribution and use.
- $25 billion more for hospitals and other health care providers, bringing the total since March to $200 billion.
- $25 billion for COVID-19 testing, including $9 billion previously appropriated.
- $15.5 billion for National Institutes of Health research.
- $15 billion for child care.
- $7.6 billion for community health centers.
- $4.5 billion for mental health, suicide prevention and overdose response programs.
- $1.3 billion for workplace training on social distancing procedures.
Other emergency appropriations would include:
- $21.3 billion for the Pentagon, including $11 billion to reimburse federal contractors for payments to employees who aren't at work due to facility closures.
- $20 billion in direct payments to farmers.
- $13 billion for Transportation-HUD subcommittee programs, including $10 billion for airports.
- $5 billion for overseas vaccine distribution.
- $1.6 billion to cover Customs and Border Protection fee shortfalls, plus $1 billion for Federal Emergency Management Agency grants and $200 million for the Transportation Security Administration.
Paycheck Protection Program
The measure would provide for a second round of forgivable Small Business Administration loans, this time limited to firms with 300 or fewer workers — down from 500 in the original March law. However, that size threshold could be increased based on the SBA's industry-by-industry definitions. And eligible businesses would need to demonstrate a 50 percent revenue reduction below a comparable period pre-pandemic.
Loan amounts would be capped at smaller levels, but uses would be expanded to cover supplier costs, operating expenses and any damage caused by recent riots in the wake of George Floyd's death at the hands of Minneapolis police. Farmers and ranchers would also receive more generous terms.
Other health care, tax provisions
In addition to the expanded business meal deduction — which critics have said will mainly help larger restaurants, if it helps at all due to social distancing requirements — the measure would provide new deductions for business purchases of personal protective equipment like masks, gloves and hand sanitizer. And there'd be an expanded version of an employee retention tax credit for hard-hit businesses enacted in March.
The Flexible Spending Account provisions would be a boon to working parents saddled with thousands of stored-up dollars in workplace accounts that can't be spent while child care facilities and camps remain closed.
There's typically a "use it or lose it" requirement that parents have to spend all the money, up to $5,000 annually, at the end of the plan year. But recognizing the difficulty of doing so under pandemic lockdown, the measure would allow balances to carry over into 2021 without disappearing. House Democrats included a similar provision in their nearly $3.5 trillion package that passed the House in May.
The GOP measure would prevent annual premium increases in 2021 for Medicare Part B, which funds doctor visits and other services, while also extending expanded telehealth reimbursement policies through next year.
It would waive a repayment requirement for hospitals that received advance Medicare reimbursements under the March aid package until Jan. 1, which otherwise would have kicked in four months after receiving payment. Additionally, eligible providers would get an extra four months before having to make interest payments on the advances.
As McConnell had long promised, the package would offer liability protection for employers trying to operate their businesses during the pandemic. The provision would make it harder for workers to win legal judgments if they contract the coronavirus while on the job.
For litigation against any business, nonprofit, school or medical provider arising from an incident of COVID-19, defendants would have the right to remove any case filed in state court to the federal district court, according to the summary document. Federal courts are often considered friendlier to defendants.
And a plaintiff must show that the defendant was "grossly negligent or engaged in willful misconduct" and violated state and local health guidelines. There would also be a cap imposed on damage awards.
State and local aid
The measure won't include additional direct aid to states and localities, for which House Democrats included $916 billion in their May bill. But it would provide flexibility to use the initial $150 billion received in the March aid package to make up for lost revenue, and extend the deadline for using the funds from Dec. 30 to four months after the end of their fiscal year.
There's a requirement that at least 15 percent of the funds be distributed to local governments, and no money could be used for pension benefits or to shore up rainy-day funds.
Lindsey McPherson, Doug Sword, David Lerman and Jennifer Shutt contributed to this report.