Exclusive: Mnuchin coronavirus relief plan includes more state, local funds

Proposal would renew federal unemployment benefit at $400 a week; has more money for COVID-19 testing, schools

Treasury Secretary Steven Mnuchin testifies before the House Financial Services Committee on Sept. 22, 2020.  (Caroline Brehman/CQ Roll Call)
Treasury Secretary Steven Mnuchin testifies before the House Financial Services Committee on Sept. 22, 2020. (Caroline Brehman/CQ Roll Call)
Posted September 30, 2020 at 8:28pm

Treasury Secretary Steven Mnuchin offered a $1.62 trillion COVID-19 relief proposal in talks with Speaker Nancy Pelosi on Wednesday, offering more state and local assistance than GOP negotiators have to date in a sign of potential progress toward a deal.

A person briefed on Mnuchin’s plan said it included $250 billion for state and local governments, which is $186 billion less than Democrats want in their latest $2.2 trillion package, but $100 billion more than the White House offered in talks that broke down over the summer.

On unemployment insurance, Mnuchin proposed a $400 per week federal benefit, retroactive to Sept. 12 and lasting through Jan. 1, 2021, according to the source, who described the package on condition of anonymity. That's less than the $600 a week Democrats want, but $100 more than Senate Republicans have proposed.

Mnuchin presented his offer to Pelosi at the Capitol on Wednesday afternoon during a 90-minute meeting; the discussion broke up without a deal, but the two principals agreed to continue negotiations Thursday.

A few hours later Democratic leaders announced they would delay voting on their $2.2 trillion bill until at least Thursday, pending the status of talks that day.

[House delays vote on partisan virus aid bill amid last-ditch talks]

"The speaker thinks there's a possibility of getting a deal," House Majority Leader Steny H. Hoyer told CQ Roll Call after a lengthy meeting with Pelosi.

“If we have a deal, yes, we may well do that,” the Maryland Democrat said when asked if the House would be willing to wait several days to vote if there’s a bipartisan agreement that needs fine tuning into legislative text. “But if we don't have a deal, then we're going to move the bill."

Mnuchin briefed Senate Majority Leader Mitch McConnell after meeting with Pelosi Wednesday. According to the source who described Mnuchin's offer, McConnell signaled he could begrudgingly get enough votes to pass the plan Mnuchin laid out if Democrats sign off on it. A McConnell spokesman denied the source's characterization.

It’s unclear if McConnell could sell anything higher than what Mnuchin has offered to a GOP conference that’s been reluctant to spend even $1 trillion on a new aid package, or provide any additional funds for state and local governments.

"We're not going to do a $2.2 trillion deal," Mnuchin said Wednesday night on Fox Business. "The president instructed us to come up significantly, so we have come up from the trillion-dollar deal that we were working on earlier."

Mnuchin described the latest White House offer as in the "neighborhood" of $1.5 trillion; if a rescission of unused Paycheck Protection Program funds were included, that would bring the net cost of Mnuchin's plan down to that level.

There are no automatic boosters in the plan that would inject another round of aid into the economy early next year if more progress containing the virus hasn't been made, however. That was a key proposal in the Problem Solvers Caucus bipartisan $1.5 trillion plan, which Mnuchin said earlier Wednesday he'd modeled his approach on.

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Bridging the gap

If the parties can resolve the state and local and unemployment insurance divisions, the gaps in other areas will likely be easier to bridge.

For example, Mnuchin increased the GOP offer on education funding to $150 billion. Democrats are at $225 billion. Both parties started with around $100 billion for education earlier in the negotiations, but there’s general agreement needs have increased as schools across the country at are different phases of reopening for in-person learning.

Pelosi has talked frequently about the need for more money to expand COVID-19 testing and tracing, saying Republicans’ prior offer of $16 billion was a significant underestimate of the demand. Mnuchin’s offer matches Democrats’ $75 billion demand, a significant concession.

Mnuchin’s total offer on health care is $175 billion, which in addition to the testing money includes $50 billion for vaccine production and distribution and $50 billion for health care providers, including hospitals.

Democrats’ bill would provide the Department of Health and Human Services with a total of $249 billion for those and other needs.

Mnuchin also appears to match Democrats’ latest offer on food assistance with $15 billion for the Supplemental Nutrition Assistance Program and nutrition aid for low-income women, infants and children.

The parties are also getting closer on direct aid for the U.S. Postal Service after a massive disagreement over the summer on the cause of operational delays. Democrats dropped their $25 billion demand to $15 billion in their latest bill, and Mnuchin is offering $10 billion.

As in earlier negotiations, both parties are still interested in sending another round of direct payments to low-income Americans, with general agreement on $1,200 for adults and $500 for dependents. They also both agree generally on the terms of expanding the employee retention tax credit, which was part of the March coronavirus relief law.

Mnuchin pitched $160 billion in new funding to revive the PPP for a second round of forgivable loans to hard-hit businesses, as well as $10 billion in funds targeted for minority lending. Democrats have made clear that any future small-business relief would need to earmark funds for minority businesses that were shortchanged in the initial round of PPP loans.

His offer also includes aid for businesses left out of the prior relief package, including restaurants, lodging and entertainment venues. Mnuchin’s aid to those businesses, as well as more money for airlines, totals nearly $120 billion. Democrats proposed $120 billion just for restaurants, as well as $10 billion for live entertainment and $28 billion for the airline industry.

White House Chief of Staff Mark Meadows told reporters traveling on Air Force One late Wednesday night that the offer includes $20 billion specifically for airlines, which he said would be enough to help them pay workers for another six months. Meadows characterized the overall offer as “extremely generous” and said he hopes an agreement can be reached quickly, according to a pool report.

Other highlights of Mnuchin’s offer include:

  • $60 billion for rental and mortgage assistance.
  • $28 billion in student loan relief.
  • $25 billion for child care providers.
  • $20 billion for farmers and ranchers.
  • $15 billion for broadband connections in underserved communities.
  • $13 billion to expand paid leave for workers with children and adult dependents.
  • $5 billion for child welfare services.
  • $3 billion for the Department of Veterans Affairs.

David Lerman contributed to this report.