Liability Safe Harbor Will Likely Leave Next Stimulus Deal in Knots

Legislative proposals for a Phase 4 stimulus package are likely to be made public soon, and interest groups have been lobbying intensely for various requests.

Wearing masks Wednesday amid the concern of Covid-19, Rogelio Ponciano, right, and Matt Attaway install a plexiglass barrier on a restroom sink at Bukhair Elementary School in Dallas. (AP Photo/LM Otero)

WASHINGTON (CN) — Lobbying groups are gearing up as lawmakers prepare to unveil the fourth, and possibly last, stimulus package to combat the economic fallout from the Covid-19 pandemic.  

Senate Republicans are expected to include additional payments to households in their legislative proposal, as well as aid to state and local governments. Also on the table, however, are several more controversial proposals that could lead to a drag-out fight with Democrats.

One such proposal is a liability safe harbor to protect businesses from Covid-19 lawsuits. With trade groups having made the item a centerpiece of their demands, safe harbor underlines stark political differences between consumer-minded Democrats and Republicans, who say businesses need firm assurances if they are to get up and running again. 

Trade groups want safe harbor protections to extend from 2019 through the next few years.

“This really shouldn’t be a partisan issue,” Harold Kim, president of the U.S. Chamber of Commerce’s Institute for Legal Reform, told reporters during a conference call on Thursday, noting 12 lawmakers from both parties on Tuesday support such a reform

A safe harbor is front and center in the U.S. Chamber of Commerce’s request to Congress for the next legislative package, as long as businesses follow federal safety guidelines or those from their state and local government. 

But opponents note that safety guidelines are not uniform across municipalities, and some states actually want fewer health restrictions. Georgia attested to this Thursday when Governor Brian Kemp prohibited cities and counties from requiring residents to wear masks.   

Business groups are confident, however, that the patchwork requirements and ever-changing guidance for businesses on how to prevent the spread of Covid-19 is not a problem.

“This virus is not the same everywhere in the country, and what we should be doing to fight it isn’t the same everyplace in the country,” Neil Bradley, chief policy officer at the chamber, told reporters. “A strict federal standard will actually make it harder to make real-time adjustments.” 

Most other business groups are in lockstep in wanting liability protections for businesses. The National Federation of Independent Business asked for a liability safe harbor for all but cases of “gross negligence” resulting in hospitalization or death from Covid-19, and even called for sanctions against attorneys who file frivolous coronavirus-related lawsuits. 

Another issue that has brought business groups in line is scaling back the additional $600-per-week in unemployment benefits.

The additional weekly unemployment payments end on July 31, which may spur lawmakers to move quickly and pass the next stimulus package before August. But the parties remain fairly split on that issue, as well.

Republicans have blamed the additional funds for keeping employees at home, saying many workers earn more with the plus-up than they would have by remaining at their jobs.

“The pandemic unemployment compensation alone pays our lowest-paid employee more than they make working a 40-hour work week, and all they had to do was sit at home and do nothing,” Les Neilly, president of a tarpaulin-manufacturing company, said last month in testimony before the Senate Finance Committee. 

Many Democrat lawmakers and unions want the $600 plus-up continued, with the AFL-CIO running advertisements blaming Senate Majority Mitch McConnell and union president Richard Trumka — “this may well be his last July in office” if a new stimulus package is not passed, those ads warn.

New York Congressman Eliot Engle also blamed McConnell for holding up the CARES Act. “It’s now been 62 days since the House sent the #heroesact to @senatemajldr after a bipartisan vote,” the Democrat tweeted Thursday afternoon. “Americans need that relief and more in order to battle the #COVID pandemic. Delaying the vote is hurting Americans.”

Time is clearly running out, though, on a stimulus package. “Inaction is not an option,” Bradley said. “There is plenty of room for compromise between the parties.”

On Thursday, Senate Democrats revealed legislation to spend $350 billion in communities of color over the next five years. The proposal, which would use $200 billion in unspent funds from previous stimulus bills, would focus on making sure working families had access to child care, spend $20 billion on small businesses, and spend $115 billion on infrastructure, among other measures. 

Business groups have proposed other measures to try to get bipartisan agreement.

In its Thursday letter to legislators, the chamber called for forgiveness on Paycheck Protection Program loans of $250,000 or less, as well as providing more than $1 trillion in funding to help schools reopen. 

“The most important thing is that we must protect the health of students and teachers in local communities, but until we are able to safely reopen schools we will not be able to fully reopen the economy,” Bradley told reporters. 

The chamber also has stressed its requests are merely temporary, eschewing the call for the permanent deregulatory and tax-related measures by such groups as the Heritage Foundation. “This is not a time for permanent, long-term policy changes,” Bradley said.

One idea that has very little steam behind it — despite President Trump’s enthusiastic support — is a payroll tax holiday. “It is not an issue that we have heard from businesses or state and local chambers as a priority that would help during this time,” Bradley said. 

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