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

Pelosi says "conversations will continue" but negotiators remain divided on state and local funds, liability protections

House Democratic Caucus Chairman Hakeem Jeffries of New York says Mnuchin's proposal moves negotiators closer together. (Tom Williams/CQ Roll Call)
House Democratic Caucus Chairman Hakeem Jeffries of New York says Mnuchin's proposal moves negotiators closer together. (Tom Williams/CQ Roll Call)
Posted September 30, 2020 at 11:18am, Updated at 5:39pm

House Democratic leaders postponed a vote on their own coronavirus relief package late Wednesday amid growing optimism about striking an 11th-hour bipartisan deal that could deliver new relief before the Nov. 3 elections.

Democrats decided to hold off on voting for a day on their $2.2 trillion aid package that Republicans oppose to give more time for bipartisan talks on a compromise, a Democratic aide said. If no deal is reached by Thursday, House leaders planned to proceed with a floor vote on their partisan bill, the aide said.

The decision to allow for more time came hours after a 90-minute meeting between Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin and later consultations with Senate Majority Leader Mitch McConnell. After that session, leaders of both camps had expressed some cautious optimism that a bipartisan agreement could be within reach.

“We're gonna go back and do a little more work again,” Mnuchin told reporters after the meeting. “I think we've made a lot of progress in a lot of areas.”

Pelosi issued a more circumspect statement, saying she and Mnuchin “found areas where we are seeking further clarification.” She added: “Our conversations will continue.”

As the meeting was taking place, White House Chief of Staff Mark Meadows told reporters: "I've seen substantial movement, yes, and certainly the rhetoric has changed."

In earlier rounds of talks Democrats had pointed to Meadows, a former leader of the hard-charging conservative House Freedom Caucus during his tenure in Congress, as an obstacle to getting a deal.

Automatic boosters

Mnuchin told CNBC Wednesday morning that the White House was offering Pelosi something “very similar” to a $1.5 trillion proposal floated by the bipartisan Problem Solvers Caucus. But Democrats have been seeking at least $2.2 trillion in new pandemic relief.

The Problem Solvers plan, unveiled two weeks ago, includes automatic triggers based on hospitalization rates and vaccine development that could allow for an additional $400 billion in aid — bringing the total package to about $1.9 trillion.

The plan would offer expanded unemployment benefits, about $500 billion in aid to state and local governments, and another round of $1,200-per-adult tax rebate checks, among other things. The bipartisan proposal also could reduce the total amount of aid by $200 billion if better-than-expected progress in combating the virus is made.

[Bipartisan House group unveils $1.5 trillion coronavirus relief plan]

House Democratic Caucus Chairman Hakeem Jeffries said the Problem Solvers plan could provide nearly $2 trillion at the high end, which is much closer to the Democrats' position. Mnuchin's apparent embrace of that proposal, Jeffries said, "actually brings us much closer to an agreement than we’ve ever been.”

But McConnell cast doubt on prospects for an agreement. While talks continue, he told reporters, “We’re very, very far apart.”

Asking Senate Republicans to approve up to $2.2 trillion, he said, “is outlandish.”

Senate Majority Whip John Thune, R-S.D., echoed that view, saying anything exceeding a roughly $1 trillion series of bills offered by Republicans in July risks an erosion of GOP support.

“As the price goes up, the Republican vote total goes down,” Thune said.

Even as they had been preparing their own bill earlier Wednesday, Democratic leaders stressed the measure was designed to stake out a negotiating stance and did not preclude bipartisan talks from proceeding.

“If we do this bill, that does not mean negotiations are over,” Majority Leader Steny H. Hoyer, D-Md., told reporters. “What I told members today is keep their schedules flexible.”

Both parties have been itching for a new round of pandemic relief before lawmakers go home to campaign for reelection. And political pressure for a deal has been steadily mounting.

Gross domestic product declined in the second quarter at an annualized rate of 31.4 percent, the Commerce Department said Wednesday. Disney announced plans to lay off 28,000 workers from its theme parks.

But negotiators have struggled for months over the size and shape of a new aid package, particularly over aid to state and local governments. Democrats say robust aid is needed to avoid mass layoffs, while Republicans say they don't want to bail out poorly managed states.

Mnuchin told CNBC the White House would offer “some more money” for state and local aid. He also pushed for “reasonable liability protection, both for schools and small businesses” to protect against pandemic-related lawsuits. That provision, which Democrats have opposed, has been a top priority for McConnell.

Pelosi on a call with her caucus Wednesday morning described the GOP push for liability protections and their reluctance to provide significant funding to state and local governments as two of the main obstacles she and Mnuchin had to work through.

Mnuchin said he hoped to have “an understanding on an overall package” by Thursday. While more work would then be needed to get a concrete deal, he said, such an understanding could persuade airlines to postpone their plans for mass layoffs if they get some assurance that additional aid is on the way.

The House bill contains $25 billion for passenger airlines to keep workers on their payrolls, plus another $3 billion for cargo carriers. White House officials have said they support similar provisions, which have been introduced in the Senate as standalone legislation.

Hotels, restaurants at risk

Pressure for a deal increased Wednesday as organizations representing travel and hospitality businesses as well as local governments blasted lawmakers for not making enough progress. They urged lawmakers on a press call to stay in session until an agreement is reached.

One of the chief targets was the Main Street Lending Program, a Federal Reserve initiative created to provide $600 billion in financing for small and medium-sized businesses.

Congress appropriated funds in March for the Treasury Department to provide a backstop in case of defaults across various Fed facilities; up to $75 billion is set aside for the Main Street program. But Treasury has only invested half of that so far and the Fed as of Aug. 31 had backed about $1.1 billion worth of loans.

“There is no other way to look at the Main Street Lending [Program] than to say so far it has been a miserable failure,” said Chip Rogers, president and CEO of the American Hotel & Lodging Association. Rogers said “only a little over a billion has been lent out, and if that is not the definition of a failed program I am not sure what is.”

The groups also called for redirecting $146 billion left in Paycheck Protection Program coffers to a second round of forgivable loans for small businesses with steep losses.

Franchises such as gyms, dry cleaners and restaurants, which employed 8 million workers, experienced 32,000 closures during the pandemic, Robert Cresanti, president and CEO of the International Franchise Association, said. He said almost 11,000 of the closings are permanent. Without congressional aid, he said, another 36,000 businesses may not survive the winter.

Senior House members of both parties, meanwhile, expressed frustration with the state of aid talks Wednesday morning as they prepared a bill that would serve as the vehicle for the Democrats’ relief package, which Republicans vowed to oppose.

“The majority is again choosing to go it alone on a road to nowhere,” Rep. Tom Cole, R-Okla., said at a Rules Committee hearing. “This will be nothing more than fiddling while Rome burns.”

Democrats said they had no choice but to prepare their own legislation because Republicans have refused to compromise. “If Republicans continue to refuse to meet us halfway, we will once again have to act alone,” said House Appropriations Chairwoman Nita M. Lowey, D-N.Y.

Jennifer Shutt and Paul M. Krawzak contributed to this report.