Democrats and the White House Race to Strike Deal for Coronavirus Relief Package


WASHINGTON — The White House and Democrats rushed on Wednesday to reach agreement on emergency legislation to provide a first tranche of economic assistance to help Americans cope with the fast-moving coronavirus pandemic, with the hope of sending it to President Trump for his signature by the end of the week.

With the White House and Democrats divided over what a broader economic stimulus package should look like, the two parties appeared to be coalescing around the idea of a narrower short-term bill focusing on paid leave, enhanced unemployment insurance, food assistance and help for small businesses. That would defer what is likely to be a much more contentious discussion over other economic measures, such as tax cuts and rescue plans for affected industries, until after Congress returns from a weeklong recess.

Treasury Secretary Steven T. Mnuchin, testifying on Capitol Hill, said he had been in “round- the-clock” discussions with Speaker Nancy Pelosi, Democrat of California, and Senator Mitch McConnell, Republican of Kentucky and the majority leader, and hoped to reach agreement within 48 hours on a relief package.

“This is a little bit like a hurricane, and we need to cover these outside of normal expenses,” Mr. Mnuchin said.

In the Capitol, both Democrats and Republicans clearly felt a sense of urgency as lawmakers currently plan to leave Washington on Thursday. Representative Steny H. Hoyer of Maryland, the No. 2 Democrat, said the House would vote Thursday on its plan, which includes enhanced unemployment insurance, paid sick leave and food assistance, according to a summary circulated by leaders on Wednesday.

Should the White House agree to the package, Mr. McConnell would likely bring it up for an immediate vote on the Senate floor, according to people familiar with his thinking who were not authorized to comment, clearing a path for Mr. Trump to quickly sign the legislation into law.

As bipartisan talks continued behind the scenes, Senate Democrats released their own plan on Wednesday morning.

Senator Chuck Schumer of New York, the Democratic leader, told reporters that Congress must focus first on the needs of those most affected by the virus, and think about an economic stimulus package later. Likewise, Mr. Mnuchin said he expected to return to Congress later to ask for a larger economic stimulus package composed of items that will take longer to draw the necessary support — including President Trump’s proposal to temporarily suspend payroll taxes, which has drawn bipartisan opposition.

“The payroll tax would be great,” Mr. Trump told reporters on Wednesday at the White House. “Dems are not in favor of it. I’m trying to figure out why.”

The Trump administration is also considering providing loan guarantees for the cruise, airline and hotel industries affected by the virus, similar to those that were offered after the terrorist attacks of Sept. 11, 2001.

“We are not looking for bailouts,” Mr. Mnuchin said. “Loan guarantees are a very effective way of making sure the government gets paid back without putting the government at risk.”

The Trump administration is also weighing its options for unilateral action. Mr. Mnuchin said on Wednesday that he would recommend to the president that the Internal Revenue Service allow a delay of tax payments beyond the April 15 deadline, without penalty or interest, that would apply to “virtually all Americans other than the superrich.”

All individuals are allowed to request tax payment extensions online, but the treasury secretary said his proposal was for a special provision to help small and medium-size businesses and “hardworking individuals.” It would not apply to large corporations or the wealthiest Americans, Mr. Mnuchin said, but he did not elaborate on what the threshold would be.

“That will have the impact of putting over $200 billion back into the economy, and that will create a very big stimulus,” Mr. Mnuchin said, adding that Treasury was already working on funding the initiative.

In moving hastily to unveil their own plans, Democrats hoped to set the terms of the debate and get ahead of the Trump administration, which is divided internally over what to do. Ms. Pelosi has scheduled a 4 p.m. meeting with her caucus to discuss her proposal. On Wednesday morning, top House Democrats were briefed by Jason Furman, an economist who advised former President Barack Obama, on how to proceed.

Congress already approved an emergency $8.3 billion emergency aid package — more than three times what Mr. Trump requested — to send additional funding to the federal health agencies responding to the novel coronavirus. The president signed that measure last week.

After weeks of playing down potential effects of the virus, Mr. Trump is now calling for drastic economic measures, including the temporary elimination of payroll taxes, a proposal whose cost would rival both the Wall Street bailout of 2008 and the economic stimulus measure that followed.

Mr. Mnuchin has been privately skeptical about calling for a payroll tax cut or holiday, but he told lawmakers on Wednesday that such a move would provide broader stimulus for the economy, which is likely to face a slowdown from all the disruption.

Democrats want a more targeted approach. Senate Democrats on Wednesday released an initial response plan, featuring paid sick leave but also several new proposals.

Those plans include a six-month break for borrowers on paying federal student loans and mortgages; block grants to help communities where the virus has shut down the economy; direct grants to small businesses; assistance to help public transit systems stay in operation; rental and mortgage payment assistance for some borrowers; and grants to child care centers and schools that are infected with the virus.

“We are just appalled at the administration,” Mr. Schumer said, adding that Mr. Trump and his advisers have “not come up with a plan to help people who need help.”

“We don’t think they should just throw money out of an airplane and hope that some of it lands on the people” who need assistance, Mr. Schumer added, referring to the payroll tax idea. In the House, Mr. Hoyer called it “a nonstarter.”

The House Democrats’ plan was expected to include proposals for government-paid sick leave and increased spending on safety-net programs like food stamps and unemployment insurance, according to talking points circulated by Ms. Pelosi on Wednesday morning.

The legislation, according to the document, will also include widespread and free coronavirus testing and new standards for protective equipment for health care workers, janitorial staff and others on the front lines of the virus. It would provide government reimbursement for all health costs Americans incur that are not covered by their insurance plans as well as efforts to increase the capacity of the health care system to take in coronavirus patients.

Democrats also plan to include new rules against price gouging for “medical and nonmedical essentials” during the outbreak, the talking points said.

Emily Cochrane contributed reporting.



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