The stimulus talks hit a new roadblock after rising momentum last week.
There are now two competing proposals in Congress, neither of which have received the support needed to move forward.
The first is a $ 908 billion bill being worked on by a bipartisan group of Senators that was heralded as a strong “starting point” by House Speaker Nancy Pelosi and Senate Minority Chairman Chuck Schumer. The second is a $ 916 billion White House offer through Treasury Secretary Steven Mnuchin that has rallied Republican lawmakers – including Senate Majority Leader Mitch McConnell and Minority House Leader Kevin McCarthy.
Both include funding for small business and vaccine distribution, but differ in a few important ways. For example, the bipartisan proposal provides far more funding for Unemployment Insurance (UI), which guarantees recipients a $ 300 weekly top-up for 16 weeks on top of what they are currently receiving at the state level.
The White House offer, on the other hand, only includes $ 40 billion to extend expiring programs that have improved user interface access. It also includes funding for a second round of $ 600 economic reviews, while the non-partisan proposal does not.
Democrats have already opposed the Mnuchin plan given the way it handled the user interface, while McConnell has rejected the bipartisan proposal as unnecessarily broad and advocated a more targeted bill. These disagreements lead to yet another legislature deadlock, despite both Republicans and Democrats having stressed that they want to get something done before they go on vacation, which is currently slated for December 21st.
“We have to do it to save lives and livelihoods in the hope that much more help is on the way,” House spokeswoman Nancy Pelosi told a press conference last week. Subject to further action by Congress, a number of programs will expire by the end of the month, including housing protection and pandemic UI coverage for 12 million Americans.
The lack of unemployment insurance support is a major problem in the Mnuchin plan
Mnuchin’s proposal includes a provision that was incredibly important to Republicans – liability coverage that would protect companies from pandemic-related lawsuits – as well as money for the Democratic priority of state and local aid. However, funding for unemployment insurance is inadequate, as the Democrats have already highlighted.
“The President’s proposal begins by cutting the unemployment insurance proposal under discussion by non-partisan members of the House and Senate from $ 180 billion to $ 40 billion. That is unacceptable, “said Pelosi and Schumer in a statement on Tuesday.
According to a Democratic adviser, Mnuchin’s plan does not provide funding for improved UI payments above current levels. The UI funding the Mnuchin plan has is intended to expand pandemic programs for the long-term unemployed as well as gig economy workers and contractors, reports the New York Times. (These programs allow people to get the UI for an additional 13 weeks and have opened the program to contractors, freelancers, and gig economy workers. They currently cover around 12 million people.)
The White House plan differs significantly from the bipartisan proposal by Republican and Democratic lawmakers, including Sens. Mitt Romney (R-UT), Susan Collins (R-ME), Joe Manchin (D-WV) and Mark Warner (D-VA ) that would create a $ 300 weekly UI supplement that would last 16 weeks.
Earlier this year, the first stimulus package, the CARES Act, included a $ 600 weekly UI supplement that expired in late July. This provision is intended to give recipients a similar, albeit lesser, boost. As Vox’s Dylan Matthews previously explained, the average weekly UI payment last January was $ 385, no surcharge, and the extra CARES Act payments provided much-needed extra support.
Mnuchin’s plan also provides funding for a one-time round of $ 600 stimulus checks, half the amount individuals received earlier this year, the Times reports. The bipartisan Senate plan failed to include a second wave of stimulus testing worth $ 1,200, as this would have added another $ 300 billion to the price, according to Senator Dick Durbin (D-IL). However, a number of lawmakers, including Sens. Bernie Sanders (I-VT) and Elizabeth Warren (D-MA), have pushed for their inclusion.
What does the bipartisan group’s latest proposal say?
The bipartisan group of Senators released further details on its proposal on Wednesday, although the draft it received from Vox indicates that liability protection as well as state and local aid are among the areas of negotiation. Some of the provisions it contains are listed below.
Unemployment insurance: The plan calls for an additional weekly UI payment of $ 300 for 16 weeks through April 2021. This additional payment strengthens the weekly payment beneficiaries receive, similar to a previous provision in the CARES Act. The law would also extend the pandemic unemployment insurance programs, which expire in late December, for an additional 16 weeks. In an earlier draft, the UI allocation was estimated at $ 180 billion.
Rental support: $ 25 billion in rental assistance is included, as is the establishment of a federal eviction moratorium through January 2021. As Vox’s Jerusalem Demsas previously reported, proponents have argued that at least $ 100 billion in rental assistance is required to to cover the current deficits. Additional measures would be needed to ensure that millions of people are not displaced by the end of January.
Small business support: $ 300 billion in small business aid, including the Paycheck Protection Program, a futile loan program that entrepreneurs can apply for to cover both wages and operating expenses. These loans are for smaller businesses with 300 or fewer employees that have seen revenue drop 30 percent or more for each quarter of this year. According to a Fortune report, this help is aimed at meeting an urgent need that many business owners face. Almost 100,000 small businesses have already closed permanently during the pandemic.
Food aid: The proposal includes a 15 percent monthly increase in individual SNAP benefits, funds for pandemic relief for children who received food support at school, and funds for other programs, including Meals on Wheels and WIC. The demand for such supplies has increased dramatically during the pandemic, and the need for food banks across the country has been overwhelming in recent months. In an earlier draft, food aid allocation was estimated at US $ 26 billion.
State and local aid: $ 160 billion for state, local and tribal governments, money to help tackle everything from health services to teacher salaries as states stare at massive budget cuts due to unexpected pandemic costs and loss of tax revenue. The legislature uses this number as a basis for negotiations.
Deferment of the student loan: Federal student loan payments would be postponed until the end of April 2021, which would extend a current policy until the end of January 2021. This policy could affect approximately 40 million student loan recipients.
Liability protection: The legislature continues to negotiate on this point. Democrats don’t support this protection at all, while Republicans want to make sure companies are protected from the possible legal consequences of their actions during the pandemic. An earlier proposal included temporary corporate liability protection and allowed states to enact their own longer-term laws.
As reported by Vox’s Ella Nilsen and Jerusalem Demsas, the proposal contains a number of other principles:
The frame also includes [funds] for transportation including airlines and Amtrak, $ 16 billion for vaccine development and further testing and tracing of Covid-19, $ 82 billion for federal education funding, $ 10 billion for troubled U.S. postal service, and $ 10 billion for childcare.
The main conflicts could still be related to liability protection and state and local subsidies
The recurring problems lawmakers struggled with during the recovery negotiations remain liability protection – one of the top Republican demands – and state and local aid – a top democratic demand. Earlier this week, McConnell even proposed removing both of a stimulus plan to move it forward, which signaled some movement given his prior commitment to uphold liability.
“If we negotiate 101, we will put these two controversial parts aside and plow ahead the huge pile of things we agree on,” said McConnell in a keynote address on Wednesday. He also tried to push for a tighter $ 550 billion bill last week, despite having endorsed the more expensive Mnuchin plan since then.
However, Democratic leaders have found that any package without state and local aid would be utterly inadequate, given the huge budget cuts that regional governments are being forced to make. You also said that state aid is supported by lawmakers on both sides of the aisle. “State and local funding is non-partisan, in contrast to the extreme corporate liability proposal that Leader McConnell made, which has no democratic support,” said Schumer.
So far, Republicans have insisted that liability protection is needed to ensure small businesses are not hit by a flurry of pandemic handling lawsuits, while Democrats have countered that such shields are designed to protect businesses from accountability. Some Republicans, including McConnell, have spoken out against state and local aid because they claim that states could use that money to cover other unrelated costs. However, the researchers have emphasized that these funds are needed to address the up to $ 500 billion deficits that states have amassed due to lower revenues and higher costs during the pandemic.
These two sticking points as well as the financing of more unemployment insurance are among the areas that the legislature must work on further if it wants to reach a compromise in the coming weeks. The stakes are incredibly high: Millions of Americans control layoffs, potential evictions and business closings, while the number of coronavirus cases continues to rise.
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