"Red Lines" Conflict as Congress Considers More Relief

May 08, 2020

A crowded field of ideas have been floated for the next coronavirus relief package, with Congressional Republicans insisting on liability protections for companies returning to work and Democrats proposing a substantially larger package including funding for hazard pay and childcare for frontline workers.

House Democrats will likely also propose OSHA expansion, state and local government funding, bans on utility shutoffs, and continuation of foreclosure and eviction bans.

Red lines everywhere for the next bill:  Senate Majority Leader Mitch McConnell’s (R-KY) red line is liability protection for businesses.  House Speaker Nancy Pelosi (D-CA) requires at least a trillion dollars more in spending, much of it for state and local governments, and funding to conduct the November election by mail.  And President Trump is again demanding a payroll tax cut and floating infrastructure investment. 

Not so fast:  Republicans want to hit the “pause button” to allow time to see how previous rounds of aid are working before committing to more spending.  McConnell said infrastructure will not be included, the Democrats oppose liability protection, and both parties have questioned the effectiveness of payroll tax cuts.   

There is little agreement:  “Let me make it perfectly clear, the Senate is not interested in passing a bill that doesn’t have liability protection,” Leader McConnell said this week.  “The way you make a law is it has to pass the House and the Senate.  What I’m saying is we have a red line on liability.  It won’t pass the Senate without it.” 

Speaker Pelosi said, “We have every reason to protect our workers and our patients in all of this.  So, we would not be inclined to be supporting any immunity from liability.” 

Outlook:  Liability protection is a key issue for employers in this round, but Democrats are dead set against it.  Both sides have demands that are non-starters for the other side.  These disagreements seem difficult, if not impossible to square.  The next bill will not be like the previous relief packages where both sides—freed from any responsibility to find “pay-as-you-go” offsets to spending—were able to spend more than $2 trillion with relative ease and within weeks.  The phase 4 bill (a.k.a., CARES 2.0) could be months in the making, with the over/under among HR Policy staff at the July 4th recess.