US government shutdown deadline looms over stimulus talks

US lawmakers were told to expect to be in session this weekend to vote on a must-pass, nearly $1 trillion COVID relief bill.

US government funding lapses at midnight on Friday and a partial, low-impact shutdown would ensue if Congress fails to pass a stopgap spending bill before then [File: J Scott Applewhite/AP Photo]

Bearing down on a midnight shutdown deadline, top negotiators on a must-pass, almost $1 trillion COVID-19 economic relief package are committed to sealing an agreement on Friday as they resolve remaining differences in hopes of passing the legislation this weekend.

The pressure is on. Government funding lapses at midnight on Friday and a partial, low-impact shutdown would ensue if Congress fails to pass a stopgap spending bill before then. That is not guaranteed, said Senate GOP Whip John Thune, who said some Republicans might block the stopgap measure to keep the pressure on if the talks have not borne fruit.

Democrats came out swinging at a key obstacle: A provision by conservative Republican Senator Pat Toomey, that would close down more than $400bn in potential Federal Reserve lending powers established under a relief bill in March. Treasury Secretary Steven Mnuchin is shutting down the programme at the end of December but Toomey’s language goes further, and Democrats say the provision would tie President-elect Joe Biden’s hands and put the economy at risk.

“If ever there is a time to put politics aside and do the right thing, it should be in the middle of a pandemic and corresponding economic crisis,” said Democratic Senator Michael Bennet. “President Trump had these authorities available to him. President-elect Biden should too.”

US stimulus checks
The new compromise COVID-19 relief aid package is expected to include $600 direct cash payments to Americans, less generous than the $1,200 payments in an earlier round of relief aid [File: Eric Gay/AP Photo]

After being bogged down for much of Thursday, negotiators turned more optimistic, though the complexity of finalising the remaining issues and drafting agreements in precise legislative form was proving daunting.

But the central elements of a hard-fought compromise appeared in place: more than $300bn in aid to businesses; a $300-per-week bonus federal jobless benefit and renewal of soon-to-expire state benefits; $600 direct payments to individuals; vaccine distribution funds and money for renters, schools, the Postal Service and people needing food aid.

Lawmakers were told to expect to be in session and voting this weekend.

“The new deadline is Friday,” said House Rules Committee Chairman Democrat James McGovern, who hoped for a House vote by Saturday.

The hangups involved an effort by Toomey’s efforts to curb emergency lending programmes by the Treasury Department and the Federal Reserve, a Democratic demand to eliminate local government matching requirements for COVID-19-related disaster grants and myriad smaller disagreements over non-pandemic add-ons, lawmakers and aides said.

President-elect Joe Biden is eager for an aid package to prop up the economy and help the jobless and hungry [File: Brendan McDermid/Reuters]

The delays were not unusual for legislation of this size and importance, but lawmakers are eager to leave Washington, DC for the holidays and are getting antsy.

The pending bill is the first significant legislative response to the pandemic since the landmark CARES Act passed virtually unanimously in March, delivering $1.8 trillion in aid and more generous $600 per week bonus jobless benefits and $1,200 direct payments to individuals.

The CARES legislation passed at a moment of great uncertainty and unprecedented shutdowns in a failed attempt to stymie the coronavirus, but after that, many Republicans focused more on loosening social and economic restrictions as the key to recovery instead of more taxpayer-funded aid.

Now, Republicans are motivated chiefly to extend business subsidies and some jobless benefits, and provide money for schools and vaccines. Democrats have focused on bigger economic stimulus measures and more help for those struggling economically during the pandemic. The urgency was underscored on Thursday by the weekly unemployment numbers, which revealed that 885,000 people applied for jobless benefits last week, the highest weekly total since September.

The emerging package falls well short of the $2 trillion-plus Democrats were demanding this fall before the election, but President-elect Joe Biden is eager for an aid package to prop up the economy and help the jobless and hungry. While Biden says more economic stimulus will be needed early next year, some Republicans say the current package may be the last.

“If we address the critical needs right now, and things improve next year as the vaccine gets out there and the economy starts to pick up again, you know, there may be less of a need,” Thune said.

A key breakthrough in long-stalled relief aid bill talks happened this week after Senate Majority Leader Mitch McConnell abandoned calls to include a liability shield for businesses in exchange for Democrats dropping demands for a $160bn state and local government aid package [File: Erin Scott/Reuters]

The details were still being worked out, but the measure includes a second round of “paycheck protection” payments to especially hard-hit businesses, $25bn to help struggling renters with their payments, $45bn for airlines and transit systems, a temporary 15 percent or so increase in food stamp benefits, additional farm subsidies, and a $10bn bailout for the Postal Service.

The emerging package would combine the $900bn in COVID-19 relief with a $1.4 trillion government-wide funding bill. Then there are numerous unrelated add-ons that are catching a ride, known as “ash and trash” in appropriations panel shorthand.

One leading candidate is an almost 400-page water resources bill that targets $10bn for 46 Army Corps of Engineers flood control, environmental and coastal protection projects. Another potential addition would extend a batch of soon-to-expire tax breaks, including one for craft brewers, wineries and distillers.

The end-of-session rush also promises relief for victims of shockingly steep surprise medical bills, a phenomenon that often occurs when providers drop out of insurance company networks.

A key breakthrough occurred earlier this week when Democrats agreed to drop their much-sought $160bn state and local government aid package in exchange for McConnell abandoning a key priority of his own — a liability shield for businesses and other institutions like universities fearing COVID-19 lawsuits.

The addition of the $600 direct payments came after recent endorsements from both President Donald Trump and progressives like Senator Bernie Sanders, and Representative Alexandra Ocasio-Cortez, along with ambitious GOP Senator Josh Hawley of Missouri. The idea is not very popular in other corners since it is extremely costly and would give money to millions of people who may not need it, but it has enormous political appeal and proved difficult to stop.

Source: AP