News & Media

Coronavirus May 11 Update: Aid Talks With White House Are on Pause, Democrats Build Tax Cuts Into Their Draft Bill, and Three Senators Propose Giving Americans $2,000/Month

Monday, May 11, 2020

Coronavirus aid talks on pause, top White House official says 

House Democrats were scrambling to produce their own version of a coronavirus relief package that could get a floor vote as early as this week. 

But producing a bipartisan bill that could actually become law is going to take a lot more time. "We're in no rush," President Donald Trump said at a White House meeting Friday with House Republicans. 

The administration is not yet negotiating with congressional leaders and an eventual deal may not emerge for a month, according to Larry Kudlow, the top White House economic adviser. "We've kind of paused as far as formal negotiations go," Kudlow told reporters Friday. "Let's have a look at what the latest round produces. You need a month or so to evaluate that." 

But House Democrats were racing ahead with their own bill nonetheless, saying the measure at least would serve as an opening bid from their party on future negotiations. "We have to start someplace and, rather than starting in a way that does not meet the needs of the American people, we want to set a standard," Speaker Nancy Pelosi, D-Calif., said at her weekly news conference. 

She and House Democratic committee leaders have been putting together another package that could rival a $2 trillion relief measure passed in March (PL 116-136), though it wasn't yet clear if the legislation would be ready for a vote this week. 

Proposals Democrats have pushed in earlier rounds of legislative aid that were rejected by the White House and top Republicans include aid to state and local governments, regulations to protect health care workers from virus exposure, nutrition assistance for low-income families and more. 

Kudlow said, however, the Trump administration was continuing to speak regularly with members of Congress from both sides of the aisle. "The president, as you know, has put out a number of his own policy ideas -- payroll tax cuts being one of them, and some kind of liability restrictions, COVID-19 liability restrictions for businesses," Kudlow said. 

The prospect of a payroll tax reduction or holiday has gotten a lukewarm reception even from key Republican senators, but limited coronavirus liability protection for health care entities and businesses is a top priority for the GOP, especially Senate Majority Leader Mitch McConnell of Kentucky. 

Kudlow on Friday also highlighted proposals to promote restaurant and travel spending, as well as allowing businesses to quickly write off expenses as they reopen. Niels Lesniewski has the full story here

The bottom line: Look for a Democrat-crafted relief bill before the real negotiations begin. 

Democrats expected to build more tax breaks into next relief bill 

The relief bill House Democrats are drafting will include tax breaks that likely amount to a partisan wish list. 

But since the Constitution grants the House sole authority to originate revenue legislation, Democrats' bargaining power on the next aid bill makes any wish list they put out difficult to ignore. 

Top Democrats have said the measure will focus mainly on tax policies directly related to the economic crisis precipitated by the COVID-19 pandemic, such as expanded employer tax credits to cover workers' wages and another round of direct payments that could top the $1,200 distributed to most Americans since mid-April. 

But some Democratic officials and lobbyists following the deliberations say they also expect provisions that were floating around prior to COVID-19 bursting onto the scene to make it into the package. 

Those include expansions of earned income tax credits for low-income childless adults, more generous tax credits for parents with very young children as well as beefed-up child and dependent care credits. Rolling back the 2017 GOP tax law's $10,000 cap on state and local tax deductions is also on the table, these people say, as is a rescue of failing union pension plans. 

Not everything in the bill, though, will be anathema to Republicans. 

A notable exception likely will be inclusion of something that's gotten a bipartisan push this week: Reversing the IRS' determination that businesses can't claim a tax deduction on expenses paid with forgivable Paycheck Protection Program loans. Doug Sword has all the details here

Harris, Sanders and Markey want to give every American $2,000 per month 

Two former Democratic presidential hopefuls and a Senate colleague have an aggressive new proposal to expand direct financial assistance to Americans during the coronavirus pandemic. 

Sens. Kamala Harris of California, Bernie Sanders of Vermont and Edward J. Markey of Massachusetts are joining in draft legislation that would provide monthly payments of $2,000 to most Americans, including children and others claimed as dependents. 

Sanders, an independent and two-time presidential candidate who caucuses with the Democrats, said in an advance statement that the economic crisis brought on by coronavirus-related closures will require far more than the one-time $1,200 checks provided to many Americans already. "If we can bail out large corporations, we can make sure that everyone in this country has enough income to pay for the basic necessities of life," he said. 

The draft legislation would provide a monthly $2,000 check to every adult with an income below $120,000. Married couples filing jointly would receive $4,000. Parents would receive $2,000 per child for up to three children. And the bill would be made retroactive to March, thereby allowing for extra payments for the past two months. 

The monthly payments would be made for as long as the pandemic endures and continue for three months after it. House Democrats are considering including some form of cash payments to families in relief legislation they are currently drafting. Niels Lesniewski has more on the bill here