Pelosi and Schumer Make a Big Concession on Stimulus

Pelosi and Schumer Make a Big Concession on Stimulus

Printer-friendly version
Plus, Trump’s defense bill veto threat
Wednesday, December 2, 2020

Pelosi and Schumer Make a Big Concession on Stimulus

Coronavirus stimulus discussions saw some dramatic movement on Wednesday, but it’s not clear yet whether that will translate to real progress toward a deal.

House Speaker Nancy Pelosi (D-CA) and Senate Democratic Leader Chuck Schumer (D-NY) called on Senate Majority Leader Mitch McConnell (R-KY) to negotiate a new coronavirus relief package, using the $908 billion bipartisan stimulus plan proposed by centrist lawmakers on Tuesday as the starting point for talks. President-elect Joe Biden also endorsed the bipartisan proposal, saying it would be a “down payment” on larger bill to come once he takes office.

Pelosi and Schumer have previously pressed for a package of roughly $2.2 trillion and they reportedly offered up a $1.3 trillion plan in private on Monday. But in a joint statement released Wednesday, they embraced the narrower bipartisan proposal as a basis for compromise.

“While we made a new offer to Leader McConnell and [House Minority] Leader McCarthy on Monday, in the spirit of compromise we believe the bipartisan framework introduced by Senators yesterday should be used as the basis for immediate bipartisan, bicameral negotiations,” they said. “Of course, we and others will offer improvements, but the need to act is immediate and we believe that with good-faith negotiations we could come to an agreement.”

Why it matters:
“Wednesday’s announcement by Pelosi and Schumer appeared to be the first time that leaders from one party agreed to back a proposal that had substantial support of members of the other party,” The Washington Post said. “And the willingness to accept a potential bill totaling less than $1 trillion represents a significant step-down for the top Democrats, who had pushed for more than $3 trillion in new aid earlier this year.”

McConnell also noted the movement by Democrats. “In the last several days, the Democrats’ leaders have signaled a new willingness to engage in good faith," he said on the Senate floor, according to Roll Call.

Where a stimulus deal stands:
McConnell rejected the bipartisan plan after it was announced Tuesday. He reportedly circulated a revised, smaller proposal that he described as a stopgap measure, one that he and Treasury Secretary Steven Mnuchin said has the support of President Trump. (Before November’s elections, the president had called for a much larger package and his negotiators had offered up some $1.9 trillion, but congressional Republicans objected to a stimulus that size.)

“After the first of the year, there is likely to be a discussion about some additional package of some size next year, depending upon what the new administration wants to pursue,” McConnell said.

Biden said Tuesday that any relief package passed in the current lame-duck session of Congress would be “at best just a start.” But Democrats had previously blocked a $500 billion GOP plan similar to McConnell’s latest blueprint, calling it grossly inadequate, and they panned the revised version.

McConnell’s latest plan reportedly includes $333 billion in aid for businesses
along with money for schools, vaccines and agriculture. It would also make business meals and entertainment expenses 100% tax deductible and provide a liability shield for businesses against coronavirus-related lawsuits, a provision that Democrats have rejected. But the plan does not include the $300 in supplemental unemployment benefits that were in an earlier GOP proposal and does not provide the additional aid to state and local governments that Democrats have demanded. See the chart below from Goldman Sachs for a comparison of the various plans that have come out since May.

What’s at stake:
S&P Global Chief Economist Beth Ann Bovino warned Wednesday that the economy could fall into recession again and take almost a year longer to recover if Congress doesn’t pass a new stimulus bill.

The bottom line:
Time is running out, as lawmakers aim to have their legislative business done by December 11 – and lots of issues remain to be addressed, both on Covid relief and a $1.4 trillion annual spending package that’s likely to be the vehicle for any pandemic aid. The deadline could still change via a short-term government funding bill that buys a bit more time.

Congress Pushes Back on Trump’s Veto Threat on Defense Bill

In a pair of tweets late Tuesday, President Trump threatened to veto the National Defense Authorization Act unless lawmakers repeal certain legal protections for social media companies.

Trump claimed that the target of his ire — section 230 of the Communications Decency Act of 1996 — is a “serious threat” to “National Security & Election Integrity” in the U.S.

“Our Country can never be safe & secure if we allow it to stand,” the president said. “Therefore, if the very dangerous & unfair Section 230 is not completely terminated as part of the National Defense Authorization Act (NDAA), I will be forced to unequivocally VETO the Bill when sent to the very beautiful Resolute desk. Take back America NOW.”

Trump has threatened to veto the 2021 NDAA before, citing his opposition to a bipartisan provision that would require renaming military bases that honor Confederate leaders. The White House reportedly floated the idea last week of accepting the renaming provision in exchange for repealing section 230, but Trump made no reference to the military base issue in his veto threat Tuesday.

What’s going on:
Along with some fellow Republicans, Trump maintains that the law, which shields companies from liability for the content posted online by their users, allows big tech firms such as Facebook and Twitter to censor conservative voices. There is no evidence that this is true, and the annual NDAA, which defines the size of the Pentagon budget and establishes key defense policy issues, has no obvious, real-world connection to the issue of liability protections for tech companies.

Congress is critical:
Lawmakers from both parties pushed back against the president’s threat Wednesday. Senate Armed Services Committee Chairman James Inhofe (R-OK) said he told the White House that he would not include the repeal provision Trump wants in the final version of the bill. “230 has nothing to do with the military,” he said. “I agree with his sentiments ... but you can’t do it in this bill. That’s not a part of the bill.”

Another conservative Republican, Sen. John Thune of Wyoming, said that while he is sympathetic with the president’s criticism of the communications law, he does not support his current approach. “I don't think the defense bill is the place to litigate that,” Thune said.

Michigan Republican Rep. Paul Mitchell of the Armed Services committee was more pointed, saying in a tweet that “as a member of House Armed Services I am disgusted with these threats to veto the NDAA. It is a strong bi-partisan DEFENSE policy bill. Not the place for a rush job last minute whack at social media.”

Texas Republican Rep. Chip Roy also took issue with the president’s threat: “'Take it or leave it' legislating is why Congress is broken,” Roy tweeted. “Sec 230 should NOT be mixed with NDAA & used by @realDonaldTrump to veto.”

Not every lawmaker spoke against the president’s effort, however. Sen. Lindsey Graham (R-SC) said he was in favor of Trump “using all the leverage he can.”

Most Small Business Aid Went to Bigger Businesses: Report

The Paycheck Protection Program was meant to help small businesses keep employees on the payroll for up to eight weeks at the height of the pandemic last spring and summer, but larger businesses claimed a majority of the funds, according to data released late Tuesday.

More than 50% of the PPP money went to just 5% of the aid recipients, The Washington Post reported Wednesday, and 25% of the funds went to just 1% of the recipients. About 600 large companies — including national chains such as P.F. Chang’s and TGI Friday’s, as well as a law firm run by Marc Kasowitz, President Trump's personal lawyer — received loans for $10 million, the maximum amount allowed in the $525 billion program.

At the other end of the scale, loans of $150,000 and less accounted for 87% of the total loans made, but less than 30% of the total in dollar terms.

“The data shows that this program primarily benefited the well banked and well lawyered at the expense of the small businesses it was supposed to benefit,” Liz Hempowicz, director of public policy for the nonprofit Project on Government Oversight, told the Post.

The Small Business Administration, which ran the program, had sought to keep the loan data confidential, but a federal judge ordered it to be released. Judge James E. Boasberg of the U.S. District Court in Washington said last month that “the weighty public interest in disclosure easily overcomes the far narrower privacy interest of borrowers who collectively received billions of taxpayer dollars in loans.”

U.S. Health Spending on Pace to Fall This Year Due to Covid

U.S. health spending may actually drop this year — but it’s no cause for celebration, writes Drew Altman, president and CEO of the Kaiser Family Foundation, a non-profit focused on health issues.

In a new column, Altman says that spending on health services so far this year is about 2% lower than last year, and factoring in spending on drugs still leaves spending down by about 0.5%.

Spending on health care cratered early on in the coronavirus pandemic as elective medical procedures were put on hold and Americans stayed away from hospitals and doctors’ offices, putting off treatment for conditions other than Covid. It has since rebounded, but may drop again as Covid case counts surge higher.

“This is the first time expenditures for patient care have fallen year-over-year since data became available in the 1960s,” Altman writes. “It may be a long time before we see a reduction in health spending like this again.”

Quotes of the Day

“We are in a very dangerous place due to the current, extremely high COVID baseline and limited hospital capacity; a further post-Thanksgiving surge will compromise COVID patient care, as well as medical care overall.

– from a White House coronavirus task force report sent to states, according to The Hill.

“December and January and February are going to be rough times. I actually believe they’re going to be the most difficult time in the public health history of this nation. Largely because of the stress that it’s going to put on our health care system.”

– Centers for Disease Control and Prevention Director Robert Redfield, during a U.S. Chamber of Commerce event Wednesday.

Views and Analysis