Senate, White House Wrangle Over New COVID-19 Stimulus Bill

The week started with high expectations that the Senate Republicans would unveil their version of a Phase 4 coronavirus bill. (House of Representative Democrats passed their program in May and are waiting for the Senate and White House to come to an agreement on their offer so that negotiations could begin.) After a two-week break for July 4, the Senate returned last Monday and Senate Majority leader Mitch McConnell had promised a bill on Monday or Tuesday. No deal among Republicans and the White House, however, was reached. What went wrong?

I believe the biggest issue is the desire of McConnell to pass a bill in the Senate without any votes coming from Democrats in order to strengthen his negotiating position with Speaker of the House Nancy Pelosi and the House Democrats. With his narrow 53 to 47 majority, he can only afford to lose three of his Republican members, and several of the Tea Party Senators are threatening to vote against the bill that will cost at least $1 trillion.

McConnell is likely going to need the President to weigh in to get the needed Republican votes; but there are questions as to his enthusiasm with bipartisan rejection of his coveted proposal to waive the payroll tax for several months. However, with growing concern in the White House about the President’s declining poll numbers, next week he will give Senator McConnell the support he needs.

It is important to remember that this week’s delay was just to get Republicans on the same page, as whatever passes the Senate will need to be reconciled with the $3.5 Trillion House bill. It is hard to see how this gets done by the end of next week when the supplemental unemployment benefits expire.

At this point it looks like there is agreement on a new round of stimulus checks, money for schools and increased testing and virus research, renewal of the PPP small business lending program, and—while still being refined—some level of supplemental unemployment insurance benefits. Additionally, the Republican bill will have a legal liability provision giving businesses protection against coronavirus suits.

The target date for a final bill remains August 7, though that could slip by a week if Tea Party Republicans fight McConnell and the President on the trillion-dollar price tag.

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