October 21, 2020

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Economic relief talks between White House and Pelosi suddenly resume as House Democrats make new offer

The two have negotiated extensively this year on economic relief bills. They initially found success but they have been at odds in recent months and talks have repeatedly broken down. They are running out of time to reach an agreement before the November elections, but their planned talks this week appear to be the most extensive engagement they have had in more than a month.

Democrats described their new offer as an updated version of the $3.4 trillion Heroes Act the House passed in May, which the White House and Senate Republicans dismissed as far too costly. Senate Republicans and Mnuchin have also said $2.2 trillion is too much to spend, but Mnuchin has said he is open to negotiations. It was not immediately clear if the talks would bear fruit or whether Democratic leaders would use the bill to provide political cover for moderate House Democrats, who have grown increasingly anxious over Congress’s recent inaction on pandemic relief legislation.

As the pandemic worsened earlier this year and many businesses shut down, Congress passed four bipartisan bills in March and April that pumped close to $3 trillion into the economy. But they have not passed an economic-relief law since then. Talks involving Mnuchin and Pelosi collapsed in early August and, before now, had shown little sign of reviving.

Mnuchin has said his priorities in a new round of spending would be aid for small businesses and children, among others. He has also talked about providing more assistance to the airline industry and approving another round of stimulus checks. There is some overlap in the White House’s goals with the things Democrats included in their new bill.

For example, the Democrats’ bill would extend the $32 billion payroll support program for the airline industry, which is scheduled to expire on Sept. 30, threatening tens of thousands of jobs. It would include another round of $1,200 stimulus payments as well as renew the expired unemployment benefits of $600 per week.

The bill would fund a range of other programs, including many that Republicans have supported. It would, for example, extend the Paycheck Protection Program for small businesses and provide $182 billion for K-12 schools and $39 billion for postsecondary schools. An additional $57 billion would go towards other child care costs.

The biggest budget item in the package would be $436 billion in aid to states, cities, territorial and tribal governments that have experienced a major budget crunch this year. That’s about half as much as the amount for cities and states that was included in the original Heroes Act, because the time period for funding state and local budgets was reduced. The White House has mostly opposed more funding for states and cities, and Trump has said that was one of the biggest sticking points in past discussions.

There would be an assortment of other programs supported by the bill, including $75 billion for coronavirus testing and tracing.

“Democrats are making good on our promise to compromise with this updated bill, which is necessary to address the immediate health and economic crisis facing Americas working families right now,” Pelosi wrote in a letter to House Democrats. “We have been able to make critical additions and reduce the cost of the bill by shortening the time covered for now.”

Pelosi had been under growing pressure from moderates in her caucus to take new action on economic relief, with millions still out of work and growing signs that the economic recovery could be stalling as the unprecedented stimulus Congress agreed to at the start of the pandemic dwindles.

Mnuchin has suggested the White House would be open to spending as much as $1.5 trillion on a new pandemic relief bill — leading some lawmakers on both sides to believe that a deal could be in reach somewhere between that figure and the $2.2 trillion Pelosi has embraced for months. Publicly at least, Pelosi has not budged from the $2.2 trillion figure — except to suggest last week that she might unveil a new bill costing even more than that.

A number of moderate Democrats in the House, including freshman lawmakers now running tough re-election races, have been urging Pelosi to compromise on a lower number.

“I cannot sit by and watch if we let standing by our number prevent anything from happening, and that happens too often here,” said Rep. Dean Phillips (D-Minn.), part of the bipartisan Problem Solvers Caucus that unveiled an approximately $1.5 trillion proposal earlier this month which was partially endorsed by Trump.

But some Senate Republicans oppose spending any more money at all. Senate Majority Leader Mitch McConnell (R-Ky.) struggled to get his conference united behind a much smaller bill that spent only around $300 billion in new money. Democrats opposed it when McConnell tried to bring it up for a vote earlier this month.

It’s unclear how that dynamic — coupled with the Senate’s focus on filling the Supreme Court vacancy — could impact chances for a deal.

In addition to reducing the time frames of some provisions in the original Heroes Act, the new bill excludes some items from that bill, including hazard pay for essential workers.

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