McConnell Deals a Blow to Covid Relief Talks

By Yuval Rosenberg

McConnell Deals a Blow to Covid Relief Talks

Senate Majority Leader Mitch McConnell has called himself the
“grim reaper,” relishing his role in killing off the legislative
priorities of Democrats led by House Speaker Nancy Pelosi.

McConnell may have swung his scythe again, as his staff
reportedly
told congressional leaders Wednesday night that
Senate Republicans likely would not support the $908 billion
Covid-relief package being negotiated by a bipartisan group of
lawmakers.

Two issues have proved to be major sticking points in reaching
any deal on additional aid: money to help state and local
governments, which Democrats want but Republicans have resisted,
and legal protections for businesses, hospitals and schools against
coronavirus-related lawsuits, a priority for Republicans that
Democrats reject.

McConnell earlier this week suggested dropping both provisions
and proceeding with a narrower package, but Democratic leaders
quickly dismissed the idea and said that the ongoing bipartisan
talks on a compromise package represented the best hope for a
deal.

“What McConnell is putting forth in terms of liability is such
an assault on American workers that I hope that the group goes
nowhere near what he is presenting,” Pelosi told reporters.

Negotiators still working to finalize their plan:
Lawmakers working on the compromise package reportedly have reached
agreement on how to distribute $160 billion in aid to state and
local governments and continue to discuss a compromise on liability
protections. “The bipartisan group has tried to come up with a
middle-ground approach that, instead of blanket immunity, would
provide businesses with an ‘affirmative defense’ for fighting
lawsuits if they follow certain health standards, but the group has
struggled to nail down the language,” Roll Call
reports.

But even as negotiators work to finalize details of their plan,
McConnell’s staffers reportedly told leadership offices that the
majority leader did not see a path toward a deal that would be
acceptable to Senate Republicans.

“McConnell has repeatedly emphasized that he believes more
assistance is needed to help the economy, but he has framed the
emerging bipartisan package as unworkable,” The Washington Post’s
Mike DeBonis and Jeff Stein
report. “His staffers warned that Senate
Republicans would reject the group’s potential agreements on a
temporary liability shield for businesses, as well as on aid to
state and local governments.”

McConnell on Thursday again demanded a broad liability shield,
and he blamed Democrats for blocking a deal Republicans would
accept. “Our Democratic colleagues have not even let us pass
noncontroversial money to invest in vaccine distribution — not
unless the two parties settle a whole list of issues that are
controversial the way they want," he said.

What’s next: In a sign that prospects for a deal have
dimmed, House Majority Leader Steny Hoyer (D-MD) sent members home
Thursday and told them they won’t need to return until at least
Tuesday evening. That would leave Congress less than four days to
finalize a spending deal needed to prevent a government shutdown,
assuming the Senate can approve legislation already passed by the
House extending the current December 11 funding deadline by a week.
But lawmakers were reportedly
uncertain Thursday about how the Senate would get
that done.

Pelosi indicated that talks on the emergency relief
legislation could drag on beyond Christmas, even as several key aid
programs are set to expire by the end of the month, potentially
causing millions of Americans to lose unemployment benefits and
protections keeping them from being evicted.

Chart of the Day: Comparing the Relief
Plans

Treasury Secretary Steven Mnuchin on Tuesday offered Pelosi a
$916 billion relief package. Democrats called the offer progress
since it was similar in many respects to the $908 billion plan they
had endorsed as a framework for talks, but they objected to the
Mnuchin plan’s replacing a $300 weekly federal supplement to
unemployment benefits with a onetime direct payment of up to $600
per person for lower-income families.

The Committee for a Responsible Federal Budget on Thursday
analyzed the economic effects of the two plans. “Though the
packages differ in significant ways, we estimate both would boost
economic output enough to close almost half of the output gap over
the next three years – which would be equivalent to fully
closing the output gap for 2021,” the group said
in a
blog post.

CRFB’s estimates found that the Mnuchin plan would boost the
economy by about $640 billion, while the bipartisan plan would
provide a $660 billion boost. “Importantly, we do not account for
the effects the plans might have on expediting the end of the COVID
pandemic, nor the impact of other non-fiscal policies such as
changes to COVID liability rules,” the group said.

Quote of the Day

“We are in the timeframe now that probably for the next 60 to
90 days we're going to have more deaths per day than we had at 9/11
or we had at Pearl Harbor.”

– CDC Director Robert Redfield,
speaking Thursday at an event hosted by the
Council on Foreign Relations.

Jobless Claims Jump to 3-Month High

While lawmakers in Washington remain deadlocked over a new
fiscal package, the economy is sending signals that it needs more
help. New jobless claims rose sharply to 853,000 last week, the
Labor Department announced Thursday, the largest weekly number
since September. Another 428,000 people applied for Pandemic
Unemployment Assistance, the temporary federal program that aids
self-employed and gig workers, bringing the total of initial claims
to 1.3 million, an increase of 276,000 from the week before.

Some economists see the report as another sign that the economy
needs a boost. “The jump in claims is consistent with our
expectation that the next jobs report will likely deliver a
negative print, reinforcing the need for immediate fiscal stimulus
to support the economy,” Eliza Winger of Bloomberg Economics

said.

“[L]ayoffs appear to be rising, consistent with the resurgent
virus,” Heidi Shierholz of the Economic Policy Institute
wrote, while also noting that “last week was the
38th straight week total initial claims were greater than the worst
week of the Great Recession.”

Joseph Brusuelas, chief economist at the consulting firm RSM,

noted that while the data may be distorted to some
extent by the timing of the Thanksgiving holiday, “there is simply
no rational case to be made that the underlying condition in the
domestic labor market is improving as the pandemic intensifies. ...
There are officially 9.8 million unemployed people, 19 million on
some form of unemployment insurance and millions who have exhausted
their benefits.”

“If it was not clear before, it is very clear now that
this condition demands policy attention in the form of fiscal aid,”
Brusuelas added.

Rand Paul Delays Defense Bill, Increasing Risk of a
Shutdown

The House passed the $741 billion National Defense Authorization
Act on Tuesday with enough votes to overcome a threatened veto by
President Trump, and the Senate was expected to follow suit in
short order. But Sen. Rand Paul (R-KY) is delaying passage of the
bill, in a move that creates the risk of a government shutdown on
Saturday.

Paul
told Politico Thursday that he objects to a
provision in the NDAA that would limit the president’s ability to
remove troops from Afghanistan. “That amendment alone is enough to
make me object to it, as well as the amount of spending,” he said.
But that amendment can’t be removed without forcing lawmakers to
start from scratch on the overall agreement.

Paul’s filibuster is also delaying the Senate vote on the
one-week government funding bill that was passed by the House on
Wednesday. The Kentucky Republican has reportedly offered to allow
a quick vote on the funding bill in exchange for delaying the
defense bill vote to Monday, but his holding maneuver was still in
effect late Thursday afternoon, raising concerns that Paul could
once again force a government shutdown, however brief.

“Drama on the floor ahead of a deadline is nothing new to Paul,
who exerts major leverage over the Senate by seizing on imminent
deadlines and pushing his priorities,” Politico said. “Paul forced
a brief shutdown in 2018 over his moves to cut spending, and using
the shutdown deadline to try and get extra concessions on the
defense bill is vintage Paul.”

McConnell, who has broken with President Trump by supporting the
defense bill, said Thursday that while it could be delayed, he
expects the vote to occur before the shutdown deadline late Friday.
“For the information of all senators, we should expect the
potential for a late night tonight and the possibility of votes
tomorrow,” he said.

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