WASHINGTON ― As lawmakers prepare to begin negotiations on another coronavirus stimulus bill, House Speaker Nancy Pelosi (D-Calif.) indicated Thursday just how far apart Republicans and Democrats are on the cost of the legislation.
“$1 trillion doesn’t do it for us,” Pelosi told reporters. “But we can negotiate from there.”
Pelosi said the next bill ― which would be Congress’ fifth coronavirus response measure ― needed $1 trillion for state and local funding, $1 trillion for expanded unemployment benefits and direct payments, and “something like that, probably not as much” for COVID-19 testing, contact tracing and treatment.
A roughly $3 trillion bill is far from the price tag that Senate Majority Leader Mitch McConnell (R-Ky.) is looking at. A senior GOP aide said Senate Republicans are pushing for $1 trillion overall, and McConnell himself has said the Senate won’t come close to the $3 trillion amount that the Democratic House passed in May.
“It won’t be a $3 trillion left-wing wishlist,” McConnell said at the end of May.
That Democratic bill would extend the extra $600 in unemployment benefits for the rest of the year ― currently, that extra money expires at the end of July ― and it would send out another round of stimulus checks to most Americans, in addition to approving $13 an hour in hazard pay for certain workers, paid sick leave, and $1 trillion for struggling state and local governments.
All of those items would help the economy. But Republicans seem increasingly intent on holding the line on spending, despite an unemployment rate above 11% and coronavirus cases spiking. And McConnell has said his top priority is tamping down a supposed “epidemic of lawsuits” that will result from people getting sick as economic activity picks up.
Part of the issue is that two consecutive jobs reports have beaten Wall Street’s expectations, with the economy adding back 2.5 million jobs in May and 4.8 million jobs in June.
President Donald Trump is already touting those increases as evidence that the economy is in the midst of a historic rally, and Republicans already seem to have forgotten that the United States lost more than 20 million jobs in April alone.
“The House bill set an unrealistic expectation for the next stimulus package,” a senior White House aide told HuffPost on Thursday. “Any thought that the proposal Democrats put forth was serious could be quickly dismissed by talking to thoughtful Democrats, let alone Republicans. One trillion properly allocated will take care of the outstanding needs.”
This senior aide added that there was a shared belief between the Hill and the White House that Republicans and Democrats could reach an agreement before the August recess.
But the distance between the two parties doesn’t exactly bode well for a deal in three weeks.
“This is like everything else: Trump just sees an alternate reality,” Rep. Jared Huffman (D-Calif.) told HuffPost on Thursday. “He’s in a complete denial about the severity of the pandemic and the depth of the economic crisis.”
Huffman said he’d be very surprised if Democrats were willing to throw state and local governments “under the bus” by not giving them significant funding, and he said the idea of Democrats settling for “stimulus-lite” ― say, $200 in extra unemployment benefits, a few hundred billion for state and local governments, and direct payments for only those making less than $40,000 ― was “crazy.”
“We’ll never go for that,” he said.
Huffman predicted there would need to be a lapse in benefits before Republicans came around to numbers that provide a sufficient response. “A lot of people would be hurt if we accepted their stimulus-lite proposal,” Huffman said.
But the major sticking point in any of these negotiations ― the extra unemployment money ― remains the one thing that could drive a deal.
“They’re gonna have to explain why $200 is enough for a family to survive.”
Republicans have already moved from earlier positions that there shouldn’t be any extra money for unemployment to the position that it should just be significantly reduced.
“If it’s moved from ‘whether’ to ‘what’s the right number,’ we’re winning that argument,” Rep. Dan Kildee (D-Mich.), one of the lead proponents for extending the extra $600 a week, told HuffPost on Thursday.
Kildee said the GOP would see the stimulative effect of the payments, and he argued that Republicans would face backlash from their own constituents if they tried to hold the line on spending.
“At that point, they’re gonna have to explain why $200 is enough for a family to survive,” he said.
Republicans have indicated they won’t extend the additional $600 a week in unemployment benefits, but there are indications that they may go along with a reduced amount ― like $200 or $300. Kildee, however, thinks that once Republicans concede the added benefits aren’t the thing that’s keeping unemployment above 10%, it would be difficult for them not to go along with an amount closer to the original $600.
Republicans also seem to generally support another round of direct payments in some form, but they want to significantly restrain who gets the money. That, too, is a concession. And so is the position that state and local governments need funding.
Some Republicans have said it’s “common sense” to bail out state and local governments. They’re just not close to the $1 trillion that Democrats want.
On all of these items, there’s a significant gap between the two parties. And that would seem to make it unlikely that Congress acts before the extra unemployment benefits expire at the end of July.
But the one thing Republicans and Democrats do agree on is that there should be another stimulus. And Democrats may be willing to accept less than all of their demands if it means extending some portion of the unemployment benefits, while Republicans may come around to the idea of spending more money than they initially wanted if it means juicing the economy in advance of the November elections.
As Kildee said Thursday, Democrats were willing to have a conversation about the appropriate number for unemployment benefits. “But it’s got to be a real conversation, and it’s gotta be a real number,” he said.
Arthur Delaney contributed to this report.