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Senate Republicans take the lead on massive stimulus package, sidestepping Democrats for now

Senate Republicans take the lead on massive stimulus package, sidestepping Democrats for now

by Susan Ferrechio | Washington Examiner  |  Published on March 19, 2020

Senate Majority Leader Mitch McConnell has assigned his Republican conference with the task of drafting a massive GOP stimulus plan that can also satisfy the White House, shutting out Democrats, at least for now.

The plan gives Republicans the chance to stake out their position and set a price on a historically large stimulus plan that could amount to $1 trillion or more and provide direct cash payments to workers, loans to small businesses, and a bailout for the airline industry.

And it rejects a common practice of allowing the leadership in both parties to negotiate a bipartisan deal first and then sell it to their rank and file.

“Republicans hope shortly to have a consolidated position, along with the administration,” McConnell said Wednesday. “Then, we intend to sit down with our Democratic colleagues and see what we can agree to.”

McConnell plans to pass a bill in the Senate with bipartisan support and send it to the House, where Democrats who run the chamber will be under pressure to approve a deal that will have passed with Democratic votes in the Senate and is urgently needed to cushion the blow of the significant economic slowdown that has gripped the nation.

McConnell’s decision to allow Republicans to take the lead will help provide significant buy-in from GOP lawmakers who have historically opposed massive government stimulus proposals.

Every Republican and seven Democrats in the House voted against the American Recovery and Reinvestment Act signed into law by President Barack Obama in 2009 to respond to the financial crisis.

The stimulus measure, initially priced at $787 billion, garnered just one Republican vote in the Senate.

GOP lawmakers are now tasked with writing legislation with a much higher price tag, this time at the request of a Republican president.

Congress has already passed two measures — an $8.3 billion bill aimed at the medical needs associated with the virus and a $104 billion bill, cleared by the Senate Wednesday, which includes free coronavirus testing, unpaid sick leave, and paid family leave provisions.

The third measure is likely to dwarf those measures.

Treasury Secretary Steven Mnuchin, warning Senate Republicans of an unemployment rate as high as 20%, pitched a stimulus of more than $1 trillion that would include sending $500 billion in direct cash payments to many U.S. adults beginning next month. Mnuchin also pushed for aid for small and large businesses, including airlines and casinos hard hit by closures and a steep and sudden decline in travel.

Mnuchin’s plan failed to win enthusiastic support from many Senate Republicans who listened to him pitch it in a closed-door meeting and emerged looking grim.

“It’s a very fluid situation, and Republicans are having intense discussions,” Sen. Pat Toomey, a Pennsylvania Republican, said.

A small group of Republicans are advocating for the direct cash payments while many more support the small business loans.

The task of writing the legislation has been delegated to several GOP committee leaders.

Sens. Susan Collins of Maine and Marco Rubio of Florida are writing a measure provide loans to small businesses, Sen. Chuck Grassley of Iowa, who heads the Senate Finance Committee, is working on a plan to send the direct cash payments, likely through the IRS.

Health, Education, Labor, and Pensions Committee Chairman Lamar Alexander of Tennessee is constructing a proposal to meet immediate medical needs related to the spread of the coronavirus, including the development of therapeutics.

McConnell said the legislation “is moving rapidly” and told senators to “stay around, close” for an imminent vote.

The GOP proposal will have to first meet the approval of Senate Democrats and House Democrats, who control the majority in the lower chamber.

Senate Minority Leader Chuck Schumer, a New York Democrat, is unhappy with the plan to allow Republicans to write the initial proposal. He wants to negotiate the deal with McConnell, House Speaker Nancy Pelosi, a California Democrat, and House Minority Leader Kevin McCarthy, a California Republican.

Democrats are busy writing their own proposals and don’t like some of what Mnuchin is pitching, particularly the airline bailout.

“One of the reasons, let’s not forget, that many airlines are so short on cash right now is that they have spent billions on stock buybacks,” Schumer said Wednesday. “Money they had to send out when they should have been saving it for a rainy day, for their customers and workers. That issue should be addressed.”

Democrats want federal aid to go primarily to low- and middle-income workers, with provisions expanding paid sick leave, unemployment insurance, and protections for labor union workers.

The House is not in session, but Democrats are working on proposals, Pelosi said.

“The House and Senate are already hard at work on the third bill,” Pelosi said in a statement Wednesday, “which will take bold, historic action on behalf of America’s workers and families. This bill will be crafted in consultation with the public health, labor, non-profit and business communities, so that we can deliver the most effective, evidence-based response.”

And there could be more legislation.

Alexander on Wednesday suggested there would be a fourth stimulus bill, “to look to our state unemployment compensation system and make sure they are able to handle the large number of people losing their jobs.”

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