House Democrats readying new virus aid package if GOP counter falls short

State, local aid the chief flashpoint in revived coronavirus relief talks

Treasury Secretary Steven Mnuchin testifies before the House Financial Services Committee on pandemic relief programs on Sept. 22, 2020.  (Caroline Brehman/CQ Roll Call)
Treasury Secretary Steven Mnuchin testifies before the House Financial Services Committee on pandemic relief programs on Sept. 22, 2020. (Caroline Brehman/CQ Roll Call)
Posted September 29, 2020 at 3:21pm, Updated at 7:42pm

House Democrats are holding out hope for a bipartisan coronavirus aid deal but are preparing for a quick vote as soon as Wednesday on the $2.2 trillion aid package they unveiled Monday if an expected White House counteroffer falls short.  

The stakes are high for both sides wanting to deliver more aid ahead of the Nov. 3 election, but it’s unclear if the political and moral imperative will be enough to bridge a $700 billion difference between Democrats’ latest bill and a $1.5 billion topline the White House has signaled it could support.

[Slimmer coronavirus aid package introduced in House]

Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin are holding last-ditch negotiations to try to find common ground on issues that have divided the parties for months, such as such as assistance for state and local governments, the scale of enhanced unemployment benefits and the amount of aid needed to safely reopen schools, ramp up testing and produce an eventual vaccine.

They spoke on the phone for approximately 50 minutes Tuesday morning going over the provisions of the slimmer House bill and agreed to speak again Wednesday, Pelosi spokesman Drew Hammill tweeted.

Mnuchin is expected to make a counteroffer to Pelosi on Wednesday, and Democratic leaders said Monday night they would wait to see how that conversation goes before officially calling a vote on the House bill.

House Majority Leader Steny H. Hoyer said Democrats hope to have a “substitutive response” from the White House by noon Wednesday, but he’s preparing for a vote on the $2.2 trillion bill if Mnuchin’s offer doesn’t provide enough progress toward a bipartisan solution.

“If we got some agreement tomorrow or tonight, we’ll see, but we’re certainly planning on moving ahead with our proposal,” the Maryland Democrat said.

Hoyer did not say when a vote would occur, but a leadership aide said it could be as soon as late in the day Wednesday. The Rules Committee is preparing to meet earlier Wednesday to prepare for whatever floor timeline leaders decide.

Direct aid to states and localities remains the starkest difference between the parties, even as Democrats have cut their initial ask by more than half, to $436 billion. Republicans object to additional funds as unduly “bailing out” Democratic-run cities and states, while arguing more education and health care funds help state and local budgets as well.

Even so, the White House has expressed a willingness to consider additional aid, and the Democrats’ proposal would actually provide less than the $500 billion offered earlier this month in a bipartisan proposal from the House Problem Solvers Caucus.

In an interview with MSNBC after her call with Mnuchin, Pelosi described the conversation as “positive” even as the parties remained split on state and local funding.

“We’ll get back together tomorrow to see how we can find common ground on how we again help state and local government play the role that it does,” the California Democrat said.

The reduction from nearly $916 billion in direct aid for states and localities in House Democrats’ earlier legislation mostly reflects how long the aid is meant to last — effectively one year versus two. Pelosi has said Democrats could provide more money next year if her party wins control of the White House and the Senate.

“We didn’t take out priorities,” she said. “We just reduced the timeline as to how long those benefits would last. We hope and pray for a vaccine that would, of course, reduce the necessity for us to go on for longer period of time, but if we need to we will.”

Mnuchin has not publicly commented on Democrats’ new bill, but others in the White House have been critical. National Economic Council Director Larry Kudlow said Tuesday on CNBC that $2.2 trillion “is a very big number.”

“There’s some leftover spending that’s not included there and some tax cuts that are repealed,” he said, noting that would bring the total price of the Democratic package closer to $2.6 trillion.

Kudlow reiterated that the White House prefers a more targeted bill focused on a handful of areas, like unemployment assistance and aid to small businesses, schools and airlines.

“These things are really essential, they would certainly help us climb out of the contraction,” he said. “And for some reason, we just can’t get it done. But the conversation, the talks will continue.”

Airline urgency

Pelosi suggested that the pending expiration Wednesday of an airline payroll support program from the March coronavirus aid law provides a deadline of sorts for the negotiations. Airlines have warned they’ll have to lay off tens of thousands of workers without an extension.

The new House bill contains $28.3 billion in payroll support that is expected to help airlines keep employees on through March 2021.

[Democrats propose billions for airlines, transit in virus relief bill]

The airline aid was one of a few additions that was not part of the earlier $3.4 trillion package. Pelosi said the needs have changed since May so the House had to add a few things like the airline aid and $120 billion to help struggling restaurants. They also increased education funding from $100 billion in the earlier measure to $225 billion.

Still, the slimmed down $2.2 trillion bill retains much of the key priorities of the earlier measure, like an extension of the $600 federal enhanced unemployment benefit that expired in July, a new round of $1,200-per-adult tax rebate checks but smaller $500 checks for children and dependents and $75 billion for expanding COVID-19 testing.

Some of the cuts made to slim down the bill — like roughly $50 billion less apiece for health care providers, renters and homeowners, a less generous refundable child tax credit and the elimination of $190 billion in hazard pay for front-line workers — risk turning off progressives who preferred Democrats to hold their negotiating position firm at $3.4 trillion.

California Rep. Ro Khanna, a vice chairman of the Congressional Progressive Caucus, questioned why Democrats would give any more money to the Defense Department after it used previous relief funds “to funnel extra money to their defense contractors.”

The May bill did not give the Pentagon any money and Khanna tweeted that it “shouldn’t get another penny” until it provides Congress answers on use of the earlier aid.

The new bill would provide the Pentagon with $2.4 billion, including $1.4 billion to cover salaries and expenses for 55,000 military base employees, including child care workers and food service operators. The remainder would be for expenses such as personal protective equipment and drugs to help ward off COVID-19.

Rank-and-file pressure

If Democratic leaders decide to bring the bill to the floor in the absence of a bipartisan agreement, it could take some whipping to get enough Democrats on board with passing it. The caucus is expected to discuss the bill during its weekly conference call Wednesday morning.

But a vote appears likely amid pressure from more moderate members of the caucus to do something before the election. “We look forward to reviewing the package’s provisions and are eager to reach a deal that gets relief and resources to those in need,” Washington’s Derek Kilmer, chairman of the New Democrat Coalition, said in a statement.

Rank-and-file pressure on Pelosi to produce a new compromise bill was amplified by Hoyer, who had pushed repeatedly in private leadership and caucus meetings for the chamber to act before adjourning ahead of the election.

Hoyer drafted an outline a few weeks ago to show what a compromise at $2.2 trillion could look like that he shared with Pelosi and members, according to a Democratic leadership aide. That proposal served as a starting point for committee leaders to put together what was ultimately released on Monday, the aide said.

Mary Ellen McIntire, Paul M. Krawzak, Niels Lesniewski, Jennifer Shutt, David Lerman and Jessica Wehrman contributed to this report.