Democrats, White House race to deal on coronavirus relief package

WASHINGTON — The White House and Democrats on Wednesday rushed to reach an agreement on emergency legislation to provide an initial tranche of economic assistance to help Americans cope the fast moving coronavirus pandemicwith hopes of sending it to President Trump for signature by the end of the week.

With the White House and Democrats at odds over what a broader stimulus package should look like, the two parties sought to reconcile around the idea of ​​a narrower short-term bill while delaying discussion of other economic measures until after Congress returned from a postponed week-long break. The bill would focus on paid furloughs, improved unemployment insurance, food aid and small business assistance.

On the night, however, there was still no agreement and House Democrats pushed on they called their own emergency aid package “Families First Coronavirus Response Act.” They expect to be brought to the vote on Thursday before leaving Washington for a planned hiatus.

According to a joint statement by Speaker Nancy Pelosi and Sen. Chuck Schumer, the minority leader, Wednesday night’s bill will include free coronavirus testing, paid emergency leave for workers, food security assistance, aid for states overburdened by Medicaid costs, and an increased include unemployment insurance.

In a prime-time speech to the nation on Wednesday night, Mr Trump welcomed some of the ideas that Democrats have proposed. He called on Congress to provide emergency assistance to those who are forced to stay home because they are sick, quarantined, or caring for others, and asked for $50 billion in soft loans to help small businesses overcome to help with the economic disruption caused by the virus.

“This is not a financial crisis. This is just a passing moment that we will overcome together as a nation and as a world,” the president said, adding that his administration “will provide additional support to American workers, families and businesses.”

But Mr. Trump also called on Congress to “grant Americans immediate payroll tax breaks” — an idea that has fallen flat on Capitol Hill, where members of both parties have opposed the president’s proposal to suspend the tax entirely until the end the year, a measure estimated to cost $800 billion or more.

The Democrats reacted coldly.

“We have a public health crisis in this country and the best way to help keep the American people safe and to ensure their economic security is for the President to focus on fighting the spread of the coronavirus himself,” Ms. said Pelosi and Mr. Schumer in their testimony. “Alarmingly, the President has not said how the administration will address the shortage of coronavirus testing kits in the United States.”

Earlier in the day, Treasury Secretary Steven Mnuchin told lawmakers that proposals and other sweeping measures to stimulate the economy, which could potentially take longer to agree, could be part of a second inquiry the administration later sends to Congress.

Testifying on Capitol Hill, Mr Mnuchin said his focus for now is reaching agreement on a bipartisan emergency aid package within 48 hours.

“This is a bit of a hurricane and we have to cover these outside of normal spending,” Mr. Mnuchin said, adding that he’s been in “round-the-clock” discussions with Ms. Pelosi, California Democrat and Senator Mitch McConnell , Republican of Kentucky and Majority Leader.

The talks developed as concern grew on Capitol Hill, where officials grappled with how to stem the spread of the virus. Lawmakers urged reporters, who normally gather in crowds, to keep their distance. Officials said Capitol tours would be suspended for the rest of the month beginning Friday. Senator Maria Cantwell, a Washington Democrat, closed her office after a staffer tested positive for the coronavirus — the first known exposure on Capitol Hill.

Should the White House approve House Democrats’ package, Mr. McConnell would most likely take it to an immediate Senate vote, according to people with knowledge of his mindset, who spoke on condition of anonymity, clearing the way for Mr. Trump to get the bill passed quickly to put power.

But it was not at all clear that the White House would accept the plan, the details of which – including how much it would cost – were up in the air. Ms Pelosi and Mr Mnuchin spoke by phone twice on Wednesday but had not reached an agreement by evening as Speakers of the House of Representatives worked all night to finalize their legislation.

Mr Mnuchin said the Trump administration is considering providing loan guarantees to the cruise, airline and hotel industries affected by the virus, similar to those offered after the September 11, 2001 attacks.

“We’re not looking for bailouts,” Mr. Mnuchin said. “Loan guarantees are a very powerful way to ensure the government is repaid without jeopardizing the government.”

Mr. Trump announced in his address that he would use the Emergency Department to instruct the Internal Revenue Service allow tax payments to be deferred beyond the April 15 deadline, with no penalty or interest that would apply to “certain individuals and businesses adversely affected.”

All individuals are allowed to apply for tax return extensions online, but Mr Mnuchin said the proposal was a special provision to help small and medium-sized businesses and “hardworking individuals”. It wouldn’t apply to large corporations or the wealthiest Americans, Mr. Mnuchin said, but he didn’t elaborate on what the threshold would be.

“This measure will add more than $200 billion in additional liquidity to the economy,” the president said.

By hastily revealing their own plans, Democrats hoped to set the terms of the debate and get ahead of the Trump administration, which was internally divided on what to do. Ms Pelosi held a meeting with her caucus on Wednesday to discuss her proposal. Earlier in the day, leading House Democrats were briefed on the way forward by Jason Furman, an economist who advised President Barack Obama.

Congress has already approved it an $8.3 billion emergency aid package – more than three times what Mr Trump was asking – to send additional funds to federal health officials responding to the coronavirus. The President signed this measure last week.

After weeks of downplaying the potential impact of the virus, Mr Trump is now calling for drastic economic measures, including the suspension of payroll taxes, the cost of which would compete the Wall Street bailout of 2008 and the stimulus measures that followed.

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

Peter Navarro, a senior White House economic adviser, said that temporarily removing the payroll tax for workers and employers “provides one of the clearest paths to a highly effective fiscal stimulus as we head towards that inevitable light at the end of the coronavirus tunnel.”

In an email on Wednesday, Mr Navarro wrote that the proposal had the potential to fully offset “any negative growth effects” of the virus by providing a 7.65 percent pay rise for low- and middle-income workers and helping smaller businesses deal with liquidity problems.

“Hourly workers should not be faced with the choice of going to work sick or staying home and going broke,” wrote Mr. Navarro. “The President will have the back of American workers and small businesses with his initiatives on paid sick leave and small business loans.”

The Democrats want a more targeted approach. Senate Democrats on Wednesday released a plan that includes a six-month pause for borrowers in paying student loans and federal mortgages; Blocking grants to help communities where the virus has crippled economies; direct grants to small businesses; support to keep public transport systems running; Rent and mortgage payment support for some borrowers; and grants for daycare centers and schools infected with the virus.

“We’re just appalled at the government,” said Mr. Schumer, a Democrat of New York. “We don’t think they should just throw money out of a plane and hope some of it gets to the people” who need help, he added.

Democrats oppose the payroll tax suspension in part because it would not help furloughed or laid-off workers and would be phased out across paychecks. In the House of Representatives, Mr Hoyer called it “a non-starter”.

Emily Cochrane contributed coverage.

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