Pelosi and Schumer Make a Big Concession on Stimulus

By Yuval Rosenberg

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.

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