Close but not yet: Deal near on COVID-19 economic aid bill

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Senate Majority Leader Mitch McConnell of Ky., walks past reporters on Capitol Hill in Washington, Tuesday, Dec. 15, 2020. (AP Photo/Susan Walsh)

WASHINGTON – Congressional negotiators closed in Wednesday on a $900 billion COVID-19 economic relief package that would deliver additional help to businesses, $300 per week jobless checks, and $600 stimulus payments to most Americans. But there was no deal quite yet.

The long-delayed measure was coming together as Capitol Hill combatants finally fashioned difficult compromises, often at the expense of more ambitious Democratic wishes for the legislation, to complete the second major relief package of the pandemic.

A hoped-for announcement Wednesday failed to materialize as lawmakers across the spectrum hammered out details of the sprawling legislation and top negotiators continued to trade offers. But lawmakers briefed on the outlines of the aid bill freely shared them.

It's the first significant legislative response to the pandemic since the landmark CARES Act in March, which delivered $1.8 trillion in aid and more generous jobless benefits and direct payments to individuals. Since then, Democrats have repeatedly called for ambitious further federal steps to provide relief and battle the pandemic, while Republicans have sought to more fully reopen the economy and to avoid padding the government's $27 trillion debt.

President-elect Joe Biden is eager for an aid package to prop up the economy and deliver direct aid to the jobless and hungry, even though the package falls short of what Democrats want. He called the emerging version “an important down payment" and promised more help next year.

Republicans, too, are anxious to approve some aid before going home for the year.

“We’re still close and we’re gonna get there,” Senate Majority Leader Mitch McConnell of Kentucky told reporters Wednesday evening as he left the Capitol. And during a Senate GOP lunchtime call a day earlier, party leaders stressed the importance of reaching an agreement before the upcoming Georgia Senate runoff election.

The details were still being worked out, but lawmakers in both parties said leaders had agreed on a top-line total of about $900 billion, with direct payments of perhaps $600 to most Americans and a $300-per-week bonus federal unemployment benefit to partially replace a $600-per-week benefit that expired this summer. It also includes the renewal of extra weeks of state unemployment benefits for the long-term jobless. More than $300 billion in subsidies for business, including a second round of “paycheck protection" payments to especially hard-hit businesses, are locked in, as is $25 billion to help struggling renters with their payments and provide food aid and farm subsidies, and a $10 billion bailout for the Postal Service.

Democrats acknowledged that the removal of a $160 billion-or-so aid package for state and local governments whose budgets have been thrown out of balance by the pandemic was a bitter loss.

“It's heartbreaking for us," said Sen. Dick Durbin of Illinois, whose state has big fiscal problems.

The emerging package was serving as a magnet for adding on other items, and the two sides continued to swap offers. It was apparent that another temporary spending bill would be needed to prevent a government shutdown at midnight on Friday. That was likely to easily pass.

House lawmakers returned to Washington Wednesday in hopes of a vote soon on the broader package, which would combine the COVID-19 relief with a $1.4 trillion governmentwide funding bill and a host of other remaining congressional business, including extending expiring tax breaks and passing other unfinished legislation.

Negotiations intensified on Tuesday after months of futility. Before the election, with Democrats riding high in the polls, House Speaker Nancy Pelosi took a hard line for more aid. Now, McConnell is playing a strong hand after a better-than-expected performance in the elections limited GOP losses in Senate races.

The frightening, record surge in COVID caseloads and deaths, combined with troubling economic indicators, however, is mandating an agreement, though the emerging package contains less economic stimulus than the March aid bill.

“The case for fiscal policy right now is very, very strong,” Federal Reserve Board Chairman Jerome Powell said Wednesday. “I think that is widely understood now. It’s a very positive thing that we may finally be getting that.”

McConnell successfully pushed to get Democrats to drop their much-sought $160 billion state and local government aid package while giving up a key priority of his own — a liability shield for businesses and other institutions like universities fearing COVID-19 lawsuits. Democrats cited other gains for states and localities in the emerging deal such as help for transit systems, schools and vaccine distribution.

The addition of the $600 direct payments came after recent endorsements from both President Donald Trump and progressives including Sen. Bernie Sanders, I-Vt., who remains dissatisfied about the overall package.

“Everything that is in that package is vitally needed," Sanders said Wednesday on MSNBC. “The problem is that it is a much smaller package than the country needs in this moment of economic desperation."

A poisonous dynamic has long infected the negotiations, but the mood was businesslike in two meetings in Pelosi's Capitol suite Tuesday that resulted in a burst of progress.

Pressure for a deal is intense. Unemployment benefits run out Dec. 26 for more than 10 million people. Many businesses are barely hanging on after nine months of the pandemic. And money is needed to distribute new vaccines that are finally offering hope for returning the country to a semblance of normalcy.

The looming agreement follows efforts by a bipartisan group of rank-and-file lawmakers to find middle ground between a $2.4 trillion House bill and a $500 billion GOP measure fashioned by McConnell.

Their $908 billion proposal has served as a template for the talks, although the bipartisan group, led by Sens. Joe Manchin, D-W.Va., and Susan Collins, R-Maine, favored aid to states and localities instead of another round of stimulus payments. The CARES Act provided for $1,200 payments per individual and $500 per child.

“I think that the work that our bipartisan group did really helped to stimulate this," Collins said.

With Congress otherwise getting ready to close up shop, lawmakers are eager to use the relief package to carry other unfinished business.

A leading candidate is a 369-page water resources bill that targets $10 billion for 46 Army Corps of Engineers flood control, environmental, and coastal protection projects. Another potential addition would extend favorable tax treatment for “look through” entities of offshore subsidiaries of U.S. corporations. Meanwhile, thousands of craft brewers, wineries, and distillers are facing higher taxes in April if their tax break isn’t extended.

The end-of-session rush also promises relief for victims of shockingly steep surprise medical bills, a phenomenon that often occurs when providers drop out of insurance company networks. That measure, combined with an assortment of other health policy provisions, generates savings for federal funding for community health centers.

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AP Congressional Correspondent Lisa Mascaro contributed.