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Republicans prepare to unveil long-awaited $1 trillion coronavirus relief package

Treasury Secretary Steve Mnuchin says the GOP is angling to reduce enhanced unemployment insurance to $200 a week.

Meadows, wearing a dark suit, light blue tie, and black cloth mask, gives a thumbs up. Mnuchin, in a navy suit, dark blue tie, and black face mask, stands solemnly with his hands stiff against his sides.
Treasury Secretary Steve Mnuchin and White House chief of staff Mark Meadows at the US Capitol amid July’s stimulus package negotiations.
Bill Clark/CQ-Roll Call, Inc./Getty Images

With time running out to pass another coronavirus stimulus package, Treasury Secretary Steve Mnuchin said on Sunday that Republicans are now prepared to unveil their long-awaited coronavirus relief plan — and that it would include another round of $1,200 stimulus checks as well as a smaller version of the enhanced unemployment insurance that has been credited with helping to keep the US economy afloat.

Democrats put forward their stimulus plan earlier in the year, with the Democratic-controlled House of Representatives passing the $3 trillion HEROES Act in May, but Republicans have struggled to answer it with legislation of their own, failing to share their plan as promised last week.

Passing the bill — which will involve striking a deal with Democrats — is a deeply urgent matter for Congress. Unemployment benefits are set to expire after July 31, a federal eviction moratorium imposed by the previous stimulus bill, the CARES Act, expired last week, and the Senate breaks for August recess on August 7.

But Mnuchin suggested Sunday that a compromise is imminent, saying on Fox News Sunday that “the [Trump] administration and the Senate Republicans are completely on the same page” now — a development that seemed far off as recently as last week, when the White House and Republican lawmakers fought fiercely over the provisions that should make it into the aid package.

Mnuchin said those provisions include something that has long been a GOP priority: Ending expanded insurance aid, which currently provides the unemployed with an additional $600 per week on top of their state unemployment payments, and which Democrats favor maintaining as a policy. In the Republican package, the program will be replaced by “something which pays people about 70 percent wage replacement, which I think is a very fair level,” Mnuchin said. He added that would amount to cutting the additional payment down to roughly $200 a week.

Mnuchin also said the GOP will be including liability protections for businesses, which Senate Majority Leader Mitch McConnell has advocated for, meant to protect businesses from coronavirus-related lawsuits that could come from customers and employees.

One executive branch priority that is no longer on the table is a payroll tax cut — President Donald Trump’s preferred method for stimulating the economy. “It was very clear that the Democrats were not going to give us a payroll tax cut,” Mnuchin said. “So that’s something the president will come back and look at later in the year.”

But as Wallace pointed out in a follow-up question, the payroll tax cut was not favored by all Republicans — it was opposed by some prominent figures in the party, such as Republican Sens. John Thune, John Cornyn, and Chuck Grassley.

National Economic Council Director Larry Kudlow also discussed details of the forthcoming coronavirus relief package on CNN’s State of the Union Sunday, telling host Jake Tapper that the GOP “will lengthen the eviction [moratorium]” that has now expired. That policy, favored by Democrats as well, protects all tenants living in buildings that have mortgages guaranteed by the US government from being forced out of their homes if they are unable to make payments.

Congress is under a tight timeline for passing the bill, in part because Republicans slowed down the legislative process after passing the CARES Act in March, both out of reluctance to spend money on relief and because they relied on highly optimistic predictions of improvement in the state of the pandemic and the economy.

“Everyone assumed months ago schools would be reopening, the economy would be re-engaging. That is not necessarily true in many places,” Sen. James Lankford (R-OK) told the New York Times last week. “So while I understand ‘Hey, you have had months and months of time,’ every week the ground shifts on us and you have to be careful with other people’s money.”

The House Democrats have said they are eager to begin final negotiations. “We’ve been anxious to negotiate for two months and ten days, when we put forward our proposal,” House Speaker Nancy Pelosi said on CBS’s Face the Nation on Sunday. “They’re in disarray and that delay is causing suffering for America’s families.”

There’s still a distance to go

After Senate Republicans introduce their legislation this week, they’ll have to go head-to-head with House Democrats in negotiating a compromise bill.

While the details of the Republican bill won’t be available until the draft legislation is released, Kudlow and Mnuchin’s interviews — as well as reporting by Vox’s Li Zhou — illuminate the GOP’s priorities. As Zhou reported last week, there are realms where both Democrats and Republicans are likely to agree in spirit on relief measures: A second stimulus check; funding for coronavirus vaccine development, testing, and treatment; funding for schools; and more support for small businesses. And this is reflected in the White House’s statements Sunday. There are, however, likely to be debates over how much funding goes toward any of those specific issues.

But there will be clashes over issues like Republicans’ interest in passing liability shields for businesses and Democrats’ focus on getting more funding for state and local governments.

And the fight over enhanced unemployment insurance is likely to be one of the most high-profile issues. When asked if Democrats would allow the federal enhancement to drop below $600, Pelosi said, “You don’t go into a negotiation with a red line, but you do go in with your values.”

Republicans have argued that the current system disincentives unemployed people from returning to work, noting that thanks to the federal payments, some make more than they would have while working. Some proponents of the insurance argue that at a time when staying home is still considered the best way to stem the tide of the virus, providing financial incentive for people not to seek work unnecessarily is wise public health policy.

On a purely economic level, the federal addition to state aid is crucial for helping people who have no prospect of getting a job again in the near future pay their bills, as Zhou explained: “[Unemployment insurance] has served as a critical safety net for millions of workers whose jobs have effectively been eliminated in the near term. According to an analysis by the Economic Policy Institute, as many as 11.9 million workers have zero chance of returning to their prior jobs as temporary job losses become permanent ones.”

It’s unclear where lawmakers will settle on the question of how much aid should be given to the unemployed. There is, however, clear agreement on one thing: Time is of the essence.

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