November 27, 2020

Trump administration’s latest Covid relief proposal to Dems gets closer, but hurdles remain

WASHINGTON — Details of the Trump administration’s $1.8 trillion offer to House Speaker Nancy Pelosi for Covid-19 relief legislation obtained by NBC News reveal that they have moved closer to the Democrats’ position — but major hurdles still remain.

The new offer increases the topline number, adds money for food, mortgage, and rental assistance, increases the amount for federal response to the pandemic, unemployment insurance, and direct payments to Americans.

Pelosi, D-Calif., told her members in a letter Saturday morning that the proposal is “insufficient.”

And on the other side of the Capitol, Senate Republicans on Saturday expressed their deep displeasure with the administration’s price tag of nearly $2 trillion in a phone call with Treasury Secretary Steve Mnuchin and White House chief of staff Mark Meadows, according to three sources familiar with the phone call.

Any deal would have to pass the Republican-led Senate and time is running out with just over three weeks until Election Day.

The administration’s beefed-up offer comes after a week of contradictory and shifting comments from the president. After being unengaged in negotiations for months, he unexpectedly instructed Mnuchin via tweet to immediately stop negotiations with Pelosi, shocking both Republicans and Democrats and allowing Democrats to blame him for Americans not seeing relief, he tweeted two days later that he wants a “big” comprehensive bill.

The $1.8 trillion proposal presented by Mnuchin to Pelosi is not just an increase of $200 billion from his last offer but also includes an increase in some of the Democrats’ top preferences. It mirrors, in many ways, the bipartisan House Problem Solvers Caucus stimulus bill released during a period of stalled negotiations.

It also provides an increase of state and local funds to $300 billion. It’s an agenda item Democrats have demanded that President Donald Trump had previously opposed, calling it a bailout to Democratic states. Pelosi, however, calls it “sadly inadequate.”

The administration offers to expand federal unemployment insurance of $400 per week until mid-January, 2021, and retroactive to Sept. 12. The Democrats are still demanding $600 per week.

It adds $15 billion for food assistance, $60 billion for mortgage and rental assistance, and $25 billion for student loan forgiveness — all Democratic priorities.

“This proposal amounted to one step forward, two steps back,” Pelosi wrote to her members. “When the President talks about wanting a bigger relief package, his proposal appears to mean that he wants more money at his discretion to grant or withhold, rather than agreeing on language prescribing how we honor our workers, crush the virus and put money in the pockets of workers.”

While the administration has greatly increased the amount of funding for testing, vaccine development, vaccine distribution, and money for providers — totaling $175 billion — Pelosi has objected to the president’s allocation for a federal response to Covid-19, which she implies that the administration hasn’t altered in this proposal.

Some of the major sticking points revolve around the assistance for children and families. The current proposal provides $150 billion for education. Democrats have been wanting more and they want money to go to schools regardless of whether they are teaching students in classrooms, in a hybrid setting, or remotely. It’s unclear if the latest administration proposal offers distinctions for funding.

Democrats had been demanding an expansion of child-related tax credits

Instead of an expansion of the EITC, the administration proposed increasing the direct stimulus payments for children. For couples making $150,000, the administration is offering $1,000 per child, up from $500.

In her letter to her colleagues, Pelosi said the administration would eliminate the $4,000 refundable Child Tax Credit and Dependent Care Tax Credit that she is demanding and was part of the HEROES Act passed by House Democrats in May.

Pelosi also notes that the administration still hasn’t moved above $25 billion for direct assistance for child care, which Pelosi calls “totally inadequate.”

The administration offer includes $91 billion for an Employee Retention Tax Credit, which is meant to incentivize employers to keep their workers on payroll. And they are demanding liability protections for business, which Senate Majority Leader Mitch McConnell, R-Ky., said must be included in any legislation to be brought up in the Senate.

It also includes $10 billion of new funding for the postal service, $20 billion and $20 billion for the lodging industry.

There is, however, no direct funding for restaurants, which could be an issue of contention. Instead, it offers workers the ability to write off their restaurant meals while at work and it alters some of the requirements for the Paycheck Protection Program loan to make it more appealing to restaurants.

And in less controversial items, the measure provides $300 billion for PPP loans for small businesses, which includes $135 billion in previously unallocated money from the first tranche of the program.

While negotiations continue, Senate Republicans remain an obstacle. On a conference call with Mnuchin and Meadows, they expressed their opposition to the $1.8 trillion relief bill currently being negotiated. They don’t like either the top-line price tag or some of the policies, according to two sources whose bosses were on the call.

One of the policy issues the Republicans disagreed with is the Democrats’ demand to expand Obamacare in the relief bill, according to another source. They say the Democrats want to provide the maximum amount of subsidy to any new enrollee in the Affordable Care Act, which the Trump administration is trying to strike down entirely.

The members “hated” the bill, according to one of the sources.

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