Republicans in Disarray on Coronavirus Relief Bill

By Yuval Rosenberg

Republicans in Disarray on Coronavirus Relief Bill

Republican efforts to develop a coherent plan for the next
coronavirus relief bill got off to a rough start Tuesday, with
lawmakers and the White House unable to agree on even basic
elements of the GOP proposal.

At a lunch meeting between lawmakers and officials from the
Trump administration, disagreements reportedly arose on policy
details such as a proposed payroll tax cut and additional funding
for the Centers for Disease Control and Prevention, as well as over
the ultimate size of the relief package.

Deadline looming: Earlier Tuesday, House Speaker Nancy
Pelosi (D-CA) said she hopes lawmakers can reach a deal by the end
of next week, but Minority Leader Kevin McCarthy (R-CA)
said he doubted the legislation would get done in
July, instead citing the first week of August as a target date.
Senate Majority Leader Mitch McConnell (R-KY) reportedly laughed
in response to a question about whether the bill could pass by the
end of next week, the target date set by Treasury Secretary Steven
Mnuchin.

Saying the Senate Republicans’ version of the relief bill will
be released “very soon,” McConnell provided some details on the
still-developing proposal. He said it would include $105 billion
for schools to help cover the cost of reopening in the middle of a
pandemic; another round of stimulus check for individuals;
reimbursement for businesses for coronavirus-related expenses, such
as cleaning and the installation of plexiglass barriers; and
another round of Paycheck Protection Program loans for small
businesses.

But Republicans still face plenty of internal differences, and
they reportedly made little progress Tuesday in bridging those
disagreements, prompting some “crowing”
by Democratic leaders. “Republicans are in complete disarray,”
Senate Minority Leader Chuck Schumer (D-NY) said. “Totally
incompetent. Totally in disarray. Totally at war with one
another.”

Differences on spending: Mnuchin and the White House had
indicated that the administration was looking to keep the cost of
the package around $1 trillion, but The Washington Post
reports that the Treasury secretary “had abandoned
that mantra” by Tuesday. “I think we’re going to spend what we need
to spend, and we’re going to make sure we don’t spend more than
that,” Mnuchin said.

Other Republicans still object to the idea of increased
spending. “What in the hell are we doing,” an angry Sen. Ted Cruz
(R-TX)
reportedly said in response to proposals to boost
spending in the bill.

Major hurdles ahead: Republican chaos
aside, the overall discussion far suggests that the
Democratic-controlled House, the Republican-controlled Senate and
the Trump administration all agree the U.S. needs another
substantial round of relief and stimulus. But the parties are
nowhere near agreement when it comes to many of the specifics.
Here’s a rundown of key sticking points via Amber Phillips of

The Washington Post.

  • Unemployment benefits: The $600 per week boost in
    benefits expires in just a few days, all but guaranteeing a lapse
    in the program for millions of Americans. Democrats want to
    continue the program at the $600 level, while Republicans have
    signaled they want to cut the weekly payment by several hundred
    dollars.
  • Payroll tax cut: President Trump is pushing for a
    payroll tax cut, but Democrats and some Republicans, citing the
    cost, the optics of cutting the source of Social Security funding
    and the fact that such a cut would do nothing for the unemployed,
    are opposed to the idea. Bowing to Trump, McConnell may include a
    deferral of payroll taxes in the proposal, though few think it will
    make it into the final bill.
  • Stimulus checks: There appears to be agreement
    over including another round of stimulus checks in the relief bill,
    but McConnell has indicated the payout should be limited to
    households earning less than $40,000.
  • Testing and tracing: Lawmakers from both parties
    want to include additional funds for testing and tracing programs
    at the state level, but the Trump administration was reportedly
    trying to block the effort over the weekend. The Washington Post

    reported     Tuesday, however, that the White House
    has changed course and will not oppose a Republican proposal to
    provide $25 billion for the effort.
  • Aid for states and cities: Democrats want to
    provide $1 trillion to state and local governments reeling from
    falling tax revenues and rising social welfare costs, but
    Republicans have little interest in anything close to that level of
    support, saying they don’t want to bail out badly run states.
  • School reopening: Trump and administration
    officials are pushing hard to open schools in the fall, and
    Republicans may defer to those demands by making federal
    educational aid contingent on some degree of reopening at the state
    and local level.
  • Liability shield: McConnell has
    repeatedly said businesses must be given extra protection from
    lawsuits related to potential coronavirus illnesses and deaths, but
    Democrats insist on additional aid for workers.

Biden Unveils $775 Billion Plan for Universal Preschool and
Caregivers

Joe Biden on Tuesday rolled out the third plank in his “Build
Back Better” economic recovery program, a $775 billion, 10-year
plan that aims to ease the burdens of caring for children and the
elderly.

“This one is about easing the squeeze on working families that
are raising their kids and caring for aging loved ones,” Biden said
in remarks prepared for delivery at an event in New Castle,
Delaware.

“We are trapped in a caregiving crisis within an economic crisis
within a public health crisis,” he later added.

Here’s an overview of
Biden’s plan:

  • It is titled “The Biden Plan for Mobilizing American
    Talent and Heart to Create a 21st Century Caregiving and Education
    Workforce.” It’s a mouthful. Let’s call it TBPMATHCTOCCEW. Or
    not.
  • The proposal calls for universal preschool for 3-and
    4-year-old children and spending $325 billion to increase the
    availability of child care. The plan would offer low-income and
    middle-class families a refundable tax credit of up to $8,000 for
    one child or $16,000 for two or more children to offset as much as
    50% of child-care costs. Families earning between $125,000 and
    $400,000 a year would be eligible for a partial credit. The plan
    calls for raising child-care workers’ pay and benefits and
    expanding subsidies for after-school, weekend and summer-care
    programs.
  • The plan would allocate $450 billion toward improving
    elder care options. It seeks to eliminate the waiting list of about
    800,000 people for home and community services under Medicaid by
    increasing funding to states. It also proposes to add 150,000
    community health workers, with many a focus on low-income areas.
    The campaign pointed to a
    study     published earlier this year that found that every
    dollar spent on community health workers would yield $2.47 in
    savings.
  • The plan aims to create 3 million new jobs in caregiving
    and education. Biden’s campaign says it would boost overall
    employment by about 5 million once unpaid caregivers are freed up
    to pursue jobs if they so choose.
  • The campaign notes that the first step in the former vice
    president’s recovery efforts would be to “immediately provide
    states, tribal, and local governments with the fiscal relief they
    need to keep workers employed and keep vital public services
    running, including direct care and child care
    services.”

Biden’s campaign says the plan will be paid for by “rolling back
unproductive and unequal tax breaks for real estate investors with
incomes over $400,000 and taking steps to increase tax compliance
for high-income earners.”

The plan would reportedly limit the ability to engage in
transactions known as like-kind exchanges, which allow real estate
investors to defer capital gains if they quickly reinvest the
proceeds of a sale in another property. It would also raise the top
capital gains tax rate from 20% to 39.6%.

“Combined with limits on like-kind exchanges, that policy means
commercial real-estate transactions that today yield no income
taxes could instead be taxed immediately at a 39.6% rate,”
Bloomberg News
reports, adding that the proposed tax increases
would raise $294 billion over a decade according to Tax Policy
Center estimates from earlier this year.

Biden previously released plans to
boost U.S. manufacturing via a “Buy American”
program and combat climate change with
investments in clean energy and
infrastructure.

Number of the Day: $383

The $600 weekly enhancement for unemployment benefits
Congress provided in March as the coronavirus crisis took hold
expires after this week, virtually guaranteeing an end to the
program unless and until lawmakers can agree on an extension.
Without the enhancement, unemployment payments will average

$383 per week, says CNBC’s Greg Iacurci, citing
figures from before the pandemic struck. The loss of the $600
payment will represent a 61% cut in income on average for the
roughly 32 million Americans currently receiving unemployment
benefits.

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