July 31, 2020
With Congress under increasing pressure to pass the next pandemic relief bill, Senate Republicans introduced a measure that constitutes their opening bid. Not only do the Democrats find fault with the Republicans' proposal, so do some Republicans.
Everyone’s a critic: Some budget hawks think the bill is too expensive. One Republican called the new bill a “mess.” President Trump called it “semi-irrelevant.” Majority Leader Mitch McConnell (R-KY) doesn’t like that funding for the new FBI building was slipped in.
Areas of agreement? In May, House Democrats passed a $3 trillion bill, which did not advance in the Senate. There may be some issues where agreement with the Republican bill is not far off. Although many details don’t marry up, both sides call for direct checks of $1200 for those making less than $75,000, an employee retention tax credit, and grants to help childcare centers.
Bridge the gulf: In addition to the Republicans’ proposed liability protection (see separate story), the largest gulf between the parties remains how to handle unemployment insurance and the $600 per week premium, which expires this week. Democrats wish to continue the policy passed early in the pandemic. Republicans, citing a disincentive for employees to return to work, would like to scale the premium down and institute a state-based formula. Some policy makers on both sides are calling for some type of extension of the enhanced UI benefits so the $600 doesn’t end abruptly. Indeed, Thursday Republicans hurriedly called votes on stop-gap extensions of federal unemployment insurance. Democrats objected to and thus stopped plans from Senator Ron Johnson (R-WI) to scale down the benefit and Senator Martha McSally (R-AZ) to continue the $600 payment for just one week.
Sooner or later: In other Presidential election years, the looming party conventions provide a hard stop on the calendar with nearly all members of Congress wishing to attend the big quadrennial party. The truncated and virtual conventions in mid-August provide no such lure to wrap the pandemic relief bill up sooner rather than later.
Prediction: Our best guess is Congress and the administration could extend the enhanced UI for a handful of weeks while continuing to hammer out a broader relief package well into August. It’s likely McConnell, Pelosi, and administration representatives present a bill that will get bipartisan support from all but the most ardent budget hawks.