Congress Deadlocked Over Next Virus Stimulus Bill

WASHINGTON (CN) — Democrats and Republicans are still at an impasse in negotiations over another Covid-19 relief bill, with Senate Majority Leader Mitch McConnell saying Tuesday additional aid to local and state governments is a red line the GOP will not cross.

“Republicans wanted to reach an agreement everywhere we could and then continue to fight over the contested questions later,” McConnell, a Kentucky Republican, said. “But the Democrats said no — because they know their unrelated wish-list items would have no prayer of standing on their own merit.”

In May, the House passed a more than $3 trillion relief bill, which would have provided $500 billion to states and $375 billion for local governments to confront the pandemic, including earmarks for testing and contact tracing.

The so-called Heroes Act also includes an extension of the $600 weekly enhanced unemployment benefits and a new round of $1,200 stimulus checks, after an estimated 32% of Americans missed their mortgage or rent payment in July. The bill also adds $10 billion to the food stamps program and another $10 billion in small business grants.  

That plan was rebuffed by Republican leadership in the Senate, who introduced a much more limited $1 trillion bill last month that also included an unrelated provision to rebuild the FBI’s headquarters in Washington.

Speaker of the House Nancy Pelosi, a California Democrat, said after the introduction of the GOP bill that $1 trillion didn’t come anywhere close to the amount of spending needed to support American families.

President Donald Trump even dismissed the Republican HEALS Act and called the bill “semi-irrelevant” during a White House news conference later in July.

McConnell said from the Senate floor on Monday that talks between Democrats and the Trump administration’s negotiating team — White House Chief of Staff Mark Meadows and Treasury Secretary Steve Mnuchin — had stalled due to provisions that he said were unrelated to Covid-19 relief. He argued these “far-left demands” included plans to indefinitely pay Americans more to stay home than to go to work.

McConnell reiterated this claim Tuesday, calling the $600 weekly Democrat-backed unemployment benefit “another absurd demand,” equating Democratic negotiations to “hostage tactics.”

“Republicans support extending a federal supplement for unemployment,” McConnell said. “But we share the view of Democrats like the House Democratic majority leader, the senior senator from Maryland, the Democratic governor of Connecticut — all of whom indicated it should be doable to land somewhere smarter than a flat $600.”

Trump signed four executive actions reinstating some relief on Saturday. The orders limit the enhanced unemployment benefits to $400 a week, leaving states to pick up the tab on the remaining 25% of uncovered funds. They include prolonging a suspension on student loan payments, extending a moratorium on evictions under the CARES Act and giving Americans a payroll tax break.

Republicans, though, are holding firm on their opposition to addition funding for state and local governments. McConnell’s position was backed by Mnuchin, who called Democrats’ proposal “an absurd number.”

“We’re not going to give a trillion dollars for state and local,” the Treasury secretary said in an interview with CNBC on Monday. “That’s just not a reasonable approach.”

On Tuesday, Senate Minority Leader Chuck Schumer said Meadows and Mnuchin had started negotiations from the GOP-proposed $1 trillion package that “was far short of the country’s needs.” When Democrats offered to bring their proposal of $3 trillion down to $2 trillion, he said, they were denied.

“So last Friday, after our negotiating session with the White House, I made it clear that the reasons our talks are stalled is the White House had basically declared, ‘my way or the highway.’ They were unwilling to meet us in the middle – they said that in the room,” Schumer said.

As Covid-19 deaths top 160,000 and infections grow beyond 5 million in the U.S., Schumer said Republicans had pushed all their chips to the middle, betting with Trump the virus would disappear. While Trump has been an impediment to a new Covid-19 relief deal, he said, Republican senators are equally culpable.

“Small businesses everyday are closing and those that are still open are struggling,” Schumer said. “Families can’t afford to feed their children. Americans can’t pay the rent and will be thrown out of their homes.”

He added, “This is a huge crisis. In this time of national emergency, Democrats believe we must focus on the health and economic security of the American people.”

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