Scaled-back GOP aid package would write off $10 billion postal loan

The provision is intended to counter House Democrats’ bill to give the Postal Service $25 billion more to cover losses

Senate Majority Leader Mitch McConnell makes his way to the Senate Republican luncheon in the Hart Building on Aug. 5, 2020. (Caroline Brehman/CQ Roll Call)
Senate Majority Leader Mitch McConnell makes his way to the Senate Republican luncheon in the Hart Building on Aug. 5, 2020. (Caroline Brehman/CQ Roll Call)
Posted August 18, 2020 at 12:40pm, Updated at 4:40pm

A “skinny” version of coronavirus relief legislation that Senate Republicans are planning to roll out this week would turn a prior $10 billion loan to the U.S. Postal Service into a grant if the agency’s financial condition deteriorates.

The provision is part of a broader 169-page draft bill that GOP leaders could introduce as early as Tuesday. It’s intended as a counter to House Democrats’ bill to give the Postal Service $25 billion more to cover revenue losses, which they expect to vote on this Saturday. 

The draft Republican bill would also provide $300 in weekly unemployment insurance benefits through Dec. 27 and pump an estimated $158 billion more into the popular small-business loan program that lapsed Aug. 8.

It would also:

  • Extend liability protections to businesses, schools and health care professionals, similar to legislation introduced last month by Sen. John Cornyn, R-Texas. 
  • Provide $105 billion for K-12 schools and colleges and universities; $29 billion for COVID-19 vaccine and drug development and distribution; and $16 billion for testing and contact tracing. Those appropriations were included in a package introduced last month.

The measure obtained by CQ Roll Call was subject to change, but as written it would cancel the postal debt as provided in the March relief package if the agency dips below $8 billion in cash on hand. The Postal Service currently has around $15 billion in cash on hand, Treasury Secretary Steven Mnuchin told CNBC on Tuesday morning.

House Democrats say the money they are set to add to separate postal legislation was recommended by the Postal Service’s board of governors. Republicans argue that despite financial problems, the agency has enough money to operate normally through August 2021. 

Postmaster General Louis DeJoy, under fire from Democrats and some Republicans, on Tuesday said he’d reverse several planned operational changes intended to save money, such as overtime pay restrictions, limits on post office hours and closure of mail processing facilities.

Speaking to The Courier-Journal in his home state on Tuesday, Senate Majority Leader Mitch McConnell said the Senate wouldn’t pass a postal-only bill. But he suggested that House passage of that measure could open up a discussion about broadening the scope to other virus-related relief provisions.

‘Most urgent’ needs

The revised Senate GOP legislation will focus on the “most urgent” needs identified by the Republican conference, according to a source close to the leadership, including unemployment insurance and small-business loans.

The draft bill leaves out numerous other measures introduced last month, including another round of $1,200 payments to individuals, employer tax credits and roughly half of a $306 billion emergency appropriations package. Money to build a new FBI headquarters in downtown Washington isn’t included, nor is $8 billion for the Pentagon to procure various weaponry. 

The small-business funding package will enable a “second draw” on the Paycheck Protection Program for eligible firms that have suffered a 35 percent revenue loss over the same period a year ago. That’s more generous than the measure unveiled last month by Senate Small Business and Entrepreneurship Chairman Marco Rubio, R-Fla., which required a 50 percent revenue decline.

In addition, the revised package would drop plans to set aside nearly $58 billion in loan funds for a new program set up to aid seasonal businesses and firms in low-income areas, as well as $10 billion in assistance to firms that invest in small businesses. Instead, the entire $257.7 billion amount, offset by a $100 billion rescission of unused funds from the first round, would be for the existing PPP program.

Pushing ‘piecemeal’

Republicans will argue that they are trying to provide more COVID-19 and postal aid while Democrats remain intransigent in the broader coronavirus relief negotiations. Democrats have previously said they objected to a “skinny” plan that doesn’t deal comprehensively with pandemic-related economic and health care needs.

“The Democrats had been saying, ‘We’re not going to do anything piecemeal,’ and then they’re going to come back and do something piecemeal,” one GOP Senate aide said, referring to the House’s stand-alone Postal Service bill. “In a way, it undercuts their argument.”

The GOP aide said the Republican bill will not have “everything that House Democrats passed in their messaging bill, but it’s a lot of what people need and it could actually get done and signed by the president if the Democrats are willing to cooperate on it.”

The bill will not be formally introduced because the Senate is not in session. But it is being advanced as preparation for trying to reach a deal with House and Senate Democrats to pass a COVID-19 aid bill attached to a stopgap funding resolution in September.

Unemployment insurance and state and local government aid are two of the thorniest sticking points dividing the parties on a broader relief bill.

Democrats are pushing to renew the $600 weekly federal unemployment insurance add-on that expired last month. Senate Republicans initially offered $200 a week for the first couple of months, while the White House expressed openness to go as high as $400.

President Donald Trump on Aug. 8 moved to establish a system by which states could apply for up to $44 billion in Federal Emergency Management Agency funds to provide laid-off workers with a $300 weekly supplement.

FEMA guidance this week said that the earliest most states would be able to distribute benefits is Aug. 29 and that the money will cover only three weeks of initial benefits to ensure other states can get funding for which they are approved. And the money will last only as long as FEMA has enough to contend with potential natural disasters. The Senate GOP bill would enable state unemployment agencies to keep paying $300 a week through the end of the year.

The Senate GOP offering wouldn’t provide any additional direct state and local government aid. A House relief package that passed in May would provide almost $1 trillion in state and local aid, several times the $150 billion figure that the White House has said it would support. Republicans also argue that direct education funds for states and localities would help address one of their biggest budgetary holes.

Talks broke off last week, with Democrats demanding that Republicans agree to at least $2 trillion in a broader aid bill, or roughly twice the size of the initial Senate GOP package offered last month. Democrats said that was a major concession given the nearly $3.4 trillion size of their bill that passed the House in May.

Mnuchin and other administration officials have said the White House couldn’t agree to a $2 trillion price tag in advance of restarting formal talks, arguing the various provisions should be negotiated on their own merits.

National Economic Council Director Larry Kudlow told reporters on Aug. 13 that Speaker Nancy Pelosi “wants a $2 trillion commitment from us” and “we are not going to give it.”

David Lerman contributed to this report.