11th-Hour Stand-Off Could Sink Coronavirus Deal

Graham Scott Sasse
Getty Images
March 25, 2020

The Senate's long-awaited coronavirus bailout is once again at risk, as a trio of Republican senators vie with Sen. Bernie Sanders (I., Vt.) in a tug-of-war that could further upend the American economy.

After almost a week of negotiations, the Senate was expected Wednesday evening to finally pass a revised version of the plan hashed out between Senators Mitch McConnell (R., Ky.), Chuck Schumer (D., N.Y.), and Secretary of the Treasury Steven Mnuchin.

On Wednesday morning, however, Senators Tim Scott (R., S.C.), Lindsey Graham (R., S.C.), and Ben Sasse (R., Neb.) announced their opposition to the bill's unemployment provisions, which they argued could unintentionally pay workers more than their incomes, driving them out of the job market and on to the dole. Sanders, in response, announced that unless the trio drop their objections, he too would put a hold on the bill over its $500 billion bailout provision.

Now, at the 11th hour, the conflict between the four could further delay a $2-trillion lifeline to the millions of Americans laid off at work or sheltered at home in the face of the deadly coronavirus. That added stress could bolster the push by some to end the state-imposed shutdown in many communities, bringing to the fore a deadly tradeoff between public health and the lifeblood of the economy.

Before this hitch, Wednesday looked to be smooth sailing for the Senate. The bill, based on text seen by the Washington Free Beacon Wednesday afternoon, is broadly similar to the version hashed out by Senate negotiators over the weekend. Its $2-trillion total offers an all-of-economy approach, aimed at both shoring up payrolls and, when people are laid off anyway, pouring money into their pockets to keep them afloat until the crisis is over.

For taxpayers, the bill offers an advance rebate on 2020 taxes to the tune of $1,200 per adult plus $500 per child, capped at $75,000 for single filers and $150,000 for joint filers (a controversial "phase-in" provision has been dropped). To help the expected wave of unemployment, it pours cash into the unemployment insurance system, including a $600 per week payment to all recipients for the next four months.

The bill provides substantial support for employers as well. It creates a pot of $350 billion to provide loans to small businesses struggling to meet payroll. It also specifically earmarks $29 billion for a bailout of the airline industry, which has seen revenues plummet, and $17 billion for "businesses important to maintaining national security." Another $454 billion is earmarked for backstopping the Federal Reserve's bonanza of lending, aimed at shoring up banks and keeping liquidity flowing in a hunkered down system. All of this would be afforded congressional oversight—an addition on which Schumer insisted.

Although they had the assent of leadership, the details of the bill—which were still being finalized Wednesday afternoon—apparently did not fly well with Sasse, Scott, and Graham. They specifically objected to the bolstered unemployment provisions which, they said in an announcement, served as "a strong incentive for employees to be laid off instead of going to work," because the amount paid out by unemployment could exceed the amount paid by some employers. This, the trio said, could mean "life-threatening shortages in sectors where doctors, nurses, and pharmacists are trying to care for the sick, and where growers and grocers, truckers and cooks are trying to get food to families' tables."

The move seems to have fractured the delicate bipartisan accord that has kept Republicans and Democrats working together through a nearly unprecedented crisis. Sanders responded Wednesday afternoon with a volley of his own, promising that unless Graham, Scott, and Sasse backed off, he would place a hold on the legislation over his concerns about the $500 billion "corporate welfare fund."

"In my view, it would be an outrage to prevent working-class Americans to receive the emergency unemployment assistance included in this legislation," Sanders said.

The response, however, only emboldened the trio. As Graham put it Wednesday, "The reason I know I’m right is that Bernie Sanders has just threatened me."

The stand-off could explode an already dragged-out process. On Sunday evening, Senate Democrats blocked an initial version of the bill after House Majority Leader Nancy Pelosi (D., Calif.) returned from recess to pitch in on negotiating. Pelosi subsequently floated a 1,400-page version rife with diversity handouts. Few appear to be in the final bill, but the attempt prompted widespread criticism of Pelosi, who was perceived as using a crisis as pretext for her preexisting political agenda.

Even if the Senate does pass its bill Wednesday evening, Pelosi still stands between it and President Donald Trump's desk. The House will not take up the bill before Thursday, as Pelosi ended its pro forma session Wednesday after just two minutes. There is still the risk that she, or another member, will block it—leaving in the lurch those Americans desperately waiting on a check from the government.

Published under: Coronavirus