GOP coronavirus proposal takes shape

Republicans are preparing to roll out their latest coronavirus relief proposal as soon as next week as Congress faces growing pressure to act amid a surge of new cases. 

Senate Majority Leader Mitch McConnell (R-Ky.) is planning to start briefing his caucus next week on the forthcoming Republican proposal, which he wants to use as a framework for negotiations with Democrats. 

“Once we go back into session next week, I’ll begin socializing … internalizing, if you will, discussions that I’ve had during this week off, with my members,” McConnell said during a stop in Kentucky on Tuesday. 

Asked what the Senate’s agenda will be, McConnell separately told WRVK, a Kentucky radio station, that “this new coronavirus package will be front and center. That will dominate our time … starting next week.” 

McConnell and other Republicans say the roughly $3 trillion bill passed by the House in late May is “dead on arrival” in the Senate. Republicans and the White House are spending the two-week recess drafting and discussing their own measure. 

Lawmakers will return to Washington on Monday, which will leave the House and Senate just a couple of weeks to work out a final deal.

The Senate is scheduled to be in session until Aug. 7, setting a natural deadline for the upcoming talks. The House is set to leave on July 31, though House Speaker Nancy Pelosi (D-Calif.) said on Tuesday that she would “absolutely” delay the start of recess.

Some key points of the GOP measure are already taking shape: The White House has signaled that it wants a price tag of roughly $1 trillion, while Senate Republicans have drawn a red line on including liability protections for hospitals, schools and businesses to help shield them from coronavirus-related lawsuits. 

Those protections are scheduled to be retroactive dating back to December 2019 through approximately December 2024, with exceptions for entities that were “grossly negligent” or engaged in intentional misconduct. 

“That will be in any bill that passes the Senate,” McConnell said on Tuesday. 

In addition to liability protections, the forthcoming Republican measure is expected to focus on getting kids back in schools for in-person classes starting in the fall, including helping cover associated costs. 

Sen. Lindsey Graham (R-S.C.) during a press conference in South Carolina said he wanted the next bill to help “absorb” costs for school districts. Sen. Lamar Alexander (R-Tenn.), the chairman of the Senate Health, Education, Labor and Pensions Committee, recently noted that by some estimates schools could need up to $75 billion, adding, “We should spend that money for schools and for colleges.”

The president has threatened to cut off funding for schools that do not reopen for classes. Economic adviser Larry Kudlow, who has called resuming in-person classes a “very, very high priority,” added to Fox News that Trump “would be willing to consider additional funding for state and local governments if the schools do reopen.” 

Both Treasury Secretary Steven Mnuchin and McConnell have indicated support for another round of stimulus checks, though the GOP leader has signaled there will likely be a lower income ceiling of $40,000 per year. The March $2.2 trillion coronavirus stimulus bill gave individuals who made up to $75,000 per year a one-time check of $1,200, with the amount of direct assistance scaled down for individuals making up to $99,000, at which point the help was phased out altogether. 

The GOP bill is also expected to include more funding for testing, and a second round of Paycheck Protection Program funding. The new tranche is expected to have tighter restrictions on what businesses will qualify, including a test to determine how much revenue a business has lost because of the coronavirus. 

The initial round of funding provided loans to businesses with up to 500 employees, though senators in both parties have indicated they could lower that cap in the next bill.  

For a bill to pass Congress it will need to win over both Senate Republicans and House Democrats, who are facing divisions not only on how much additional money to greenlight but what the pillars of the fifth package should be. 

Asked by CNN if Democrats would be willing to “give” on liability protections since it’s a top priority for McConnell, Pelosi replied, “Well, what does he mean by that?” 

The House proposal would extend a $600 per week increase of unemployment benefits and provide approximately $1 trillion in additional help for state and local governments that have seen their tax base shrink as the pandemic shuttered businesses and tanked sales. 

Sen. John Thune (S.D.), the No. 2 Senate Republican, said before the two-week break that there was a “general consensus” within the caucus about providing states with more flexibility for the $150 billion already appropriated by Congress.

How to handle unemployment insurance, meanwhile, has been a long-simmering flashpoint after McConnell told House Republicans earlier this year that he would not continue the $600 per week increase in the next bill. 

Senate Minority Leader Charles Schumer (D-N.Y.) was deeply critical of McConnell’s handling of the upcoming bill during a Democratic conference call on Tuesday, according to a source on the call. 

“There’s been zero outreach from McConnell, and Schumer sees the Republican strategy as trying to sideline the House Democrats by writing a partisan bill in his office, just like he tried to do last time on CARES. Schumer said Senate Dems will only negotiate with House Democrats in the room,” according to the source, who referred to earlier legislation responding to the coronavirus pandemic. 

Schumer, according to the source, also accused McConnell of crafting the bill behind closed doors with input from lobbyists, telling Democrats that “Republicans are stuck shilling for special interests.” 

Republicans have remained dug in that they will not support an extension of the current increase. But Mnuchin told CNBC’s “Squawk Box” late last week that when it comes to unemployment benefits “you can assume that it will be no more than 100 percent” of a worker’s wages before they were laid off. 

McConnell added on Tuesday that the “bonus” included in the March bill was a “mistake.” 

“I think basic unemployment insurance is extremely important,” he added. “We need to help the states make sure that basic unemployment insurance is still there for a lengthier period of time.”