Senate Majority Leader Mitch McConnell is preparing Thursday to introduce a $1 trillion-plus economic stimulus plan to deal with the fallout out of the coronavirus crisis, but some Republicans are balking at a White House proposal to send hundreds of billions of dollars in checks directly to American families.
McConnell has vowed to keep the Senate in session until the chamber passes some kind of legislation to deal with growing economic fallout from the pandemic. And some White House officials are downplaying the GOP opposition to the direct payments initiative.
Sen. Lindsey Graham (R-S.C.) has been the most vocal opponent of the cash payments plan pushed by President Donald Trump, Treasury Secretary Steven Mnuchin and other senior administration officials. Graham told Senate Republicans on Thursday that he had called Trump to lobby against the plan, adding that Rep. Mark Meadows (R-N.C.) — soon to take over as White House chief of staff — agreed with him.
"Direct payments make sense when the economy is beginning to restart. It makes no sense now cause it's just money," Graham told reporters. "What I want is income, just not one check. I want you to get a check every week, not just one week."
Graham, like some other Republicans, wants to beef up the unemployment insurance system instead, as well as boosting loans for small businesses. Mnuchin and administration officials have floated providing $300 billion or more for small businesses, while direct payments to individual American families in April and May could cost $500 billion or more.
"I personally think if we're going help people we ought to direct the cash payments maybe as a supplement to unemployment, not to the people that are still working everyday," said Senate Appropriations Committee Chairman Richard Shelby (R-Ala.). "Just a blanket cash check to everyone in America who is making $75,000... I don't know the logic of that. I could see tying it to unemployment, maybe boosting it for people who are going be laid off for a while."
Shelby, however, cautioned that he wasn't saying he'd vote against the proposal, just that he didn't like it.
Sen. Jim Lankford (R-Okla.) said he had a "lot of questions of how this works, who gets and who doesn't." Other Republicans raised similar concerns, although they were cautious in their opposition."
But White House officials privately believe that Senate Republicans will fall in line with Trump if he pushes the cash payments proposal. A senior administration official noted Graham has already expressed his opposition to direct payments.
"We're all going to have to vote for something that in another environment we wouldn't support," said Sen. John Kennedy (R-La.).
McConnell, speaking on the Senate floor Thursday, outlined the Republican proposal to assist small businesses by providing federally guaranteed loans; direct cash payments, as well as lending to industries such as the airlines that are hit hard by the coronavirus. In addition, Republicans are looking to get more resources for the health care system, which could be overloaded as the virus continues to spread throughout the U.S.
“Our proposal will immediately help American workers, families, and businesses,” McConnell said of the plan, known as “Phase 3.” “Yes, it will help position our economy to thrive once again after this public health menace is behind us … Fundamentally, we have to beat back this virus.”
But the package will need support from at least seven Senate Democrats if all Republicans back it. Senate Minority Leader Chuck Schumer (D-N.Y.) emphasized Thursday that Democrats, who have outlined their own vision, will pursue a “workers first” proposal and called for a “Marshall Plan” for the health care system. He also called for a new form of unemployment insurance.
Schumer has stayed in close touch with Mnuchin, who is leading negotiations for the Trump administration, about the third stimulus package, as well as Speaker Nancy Pelosi (D-Calif.).
In his floor remarks, Schumer also expressed skepticism about the administration’s proposal to provide $1,000 checks to workers to mitigate the economic consequences of the crisis, saying that “it cannot be a substitute” for other provisions like paid sick leave. He added that if Congress moves ahead with cash payments, the payments should be more substantial and frequent.
The Treasury Department floated a plan this week to lawmakers to provide direct payments to Americans starting in April, and then another round of payments in May.
“As we Democrats seek input into the joint bipartisan package that will be put together, our goal is to make sure that no one, no worker, no family, no one loses a paycheck or goes into financial ruin as a result of the coronavirus,” Schumer said. “That will take strong, bold, immediate action.”
The minority leader also called for “four corner” negotiations between party leaders in the Senate and the House, but McConnell has shown no interest in involving the House.
In preparing the “Phase 3” package, McConnell has directed task forces to come up with proposals. Sens. Marco Rubio (R-Fla) and Susan Collins (R-Maine) are suggesting giving small businesses forgivable loans, which would be administered by a bank, credit union or some other type of lender.
According to a draft discussion of the small business proposal, obtained by POLITICO, the maximum small business loan the government could back would double to 10 million from 5 million through the end of the year.
In addition, Republicans have discussed providing direct cash payments for individuals below a certain income level and the deferment of student loans, potentially for up to three months.
McConnell emphasized Thursday that the proposals are not “bailouts.”
“From small businesses to key sectors, we are not talking about so-called ‘bailouts’ for firms that made reckless decisions,” McConnell said. “Nobody is alleging a moral hazard here. None of these firms — not corner stores, not pizza parlors, not airlines — brought this on themselves.”
Meanwhile, Senate Democrats have outlined their ideas for expanded paid sick leave and unemployment insurance as part of a $750 billion proposal.
The third stimulus package comes after the Senate passed Wednesday a multi-billion dollar House-passed emergency aid package. While some Republicans had expressed reservations about the package's paid sick leave provisions, the final vote tally was 90-8.
House Democrats are drafting their own stimulus package with extensive financial protections — including direct monthly payments of as much as $2,000 for adults; grants and debt relief for small businesses; and measures to halt evictions and foreclosures.
Democrats would also enforce strict rules on businesses that receive federal cash, such as maintaining payroll, upholding collective bargaining rights and no stock buybacks.
Pelosi and committee leaders laid out the details of the plan — which is still taking shape — on a more than two hour conference call on Thursday.
Separately from the economic relief measures, House Democrats are also pushing for between $120 billion and $150 billion in cash for federal agencies. Much of that would trickle down to state and local authorities, which have been struggling to meet public health and economic demands amid the outbreak.
Democrats say Congress may have no choice but to dole out the funds on the third package, instead of waiting for a fourth, because it’s unclear how much longer both chambers will be able to meet in person.
Sarah Ferris contributed to this story.
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