Why the Stimulus Deal Isn't Done Yet

Why the Stimulus Deal Isn't Done Yet

Reuters/Erin Scott

Congress is still scrambling to finalize another Covid relief deal, with negotiators haggling over elements of the legislation and billions in spending ahead of a Friday night deadline, when lawmakers had hoped to pass a $900 billion aid package paired with a $1.4 trillion omnibus government spending bill.

Senate Minority Leader Chuck Schumer (D-NY) said Thursday that, while a deal is close, “a few final issues must be hammered out.” Senate Majority Leader Mitch McConnell (R-KY) said members of Congress were now “highly likely” to be working through the weekend to pass the rescue package and that lawmakers may have to buy some more time by passing a stopgap government-funding bill to prevent a partial government shutdown when current funding lapses at 12:01 a.m. ET on Saturday.

The sticking points on a Covid rescue deal reportedly include which Americans would be eligible for direct relief payments and disagreements over an extending an eviction moratorium and health care and disaster relief funds as well as money for entertainment venues. Republicans are also pushing to formally end the emergency Federal Reserve lending programs created by the CARES Act passed in March.

Emily Cochrane reports in The New York Times:

“Democrats were making a last-ditch effort to provide emergency aid to states, which they argued was critical to helping states weather the pandemic and avoid huge layoffs and cuts in services that could reverberate through the economy. Republicans were working to limit the power of the Federal Reserve to bail out businesses, municipalities or other institutions in the future.”

Republican Sens. Pat Toomey on Pennsylvania and Mike Crapo of Idaho are reportedly pressing for language that would prevent the Treasury Secretary from restarting the Fed lending programs for small and midsized businesses as well as state and local governments. Those programs are set to end this month.

“In the future, if some kind of dire emergency occurs, at that point the Fed and Treasury should come to Congress if they believe any kind of extraordinary program is needed,” Toomey told reporters Thursday. “What this does is that nobody can revive or create a duplicate of the programs that received Cares Act money.”

Democrats warn that the proposal would limit the incoming Biden administration’s paths for promoting economic recovery. “They are trying to take away some options for the new president to deal with some challenges to the economy,” Senator Ron Wyden, the top ranking Democrat on the Senate Finance Committee, told reporters, according to Bloomberg News.

Toomey told reporters that his push was not meant to hamstring the Biden administration or hurt the economy, noting that he’s sought to ensure that the programs end this year since well before November’s election.

A short government shutdown might be possible: Any senator could block quick passage of a stopgap spending bill, and — in what could be seen as a sign of how Congress now works, or doesn’t —Democrats are wary of a measure that would ease pressure on negotiators to finalize a Covid relief package, according to Politico.

"I know people who are going to object to that, that want to keep pressure on the process until we get a deal," Senate Majority Whip John Thune (R-SD) told Politico. "Government shutdowns are never good. If it's for a very short amount of time on a weekend hopefully it's not going to be something that would be all that harmful."

The bottom line: Congressional leader remain optimistic that they’ll get a deal done, but the process is likely to spill over into the weekend.