[NYAPRS Enews] State/Local Aid Come to Forefront of Federal COVID Relief Negotiations: BN

[Harvey Rosenthal]

NYAPRS Note: Negotiations on the next COVID relief package between the White House and Congressional Democrats remain contentious and unresolved as of this morning, particularly since funding for state and local governments, which has been the top priority for NYAPRS and our colleagues, has finally come to the forefront (see below). House Dems have continued to hold out for nearly $1 trillion in aid to state, local, territorial and tribal governments while Senate Republicans and the White House have historically opposed new funding.
Our groups have been working all 3 sides throughout and we're all hoping that negotiations resume today and reach a breakthrough on an issue that is critical to addressing Americans' steadily increasing health and behavioral health care needs

Here's a brief synopsis and today's news piece below:

  *   Deadline: While both sides originally pressed for an August 7th deal in advance of a planned Senate recess, that deadline has been extended by Senate leader McConnell and negotiators are saying that both sides could come back within 24 hours to close a deal.
  *   Total amount of the package: The Senate has been at a hard cap of $1 trillion while the House just jumped raised the cost of their proposal from $3.1 to $3.4 billion. Reportedly the Senate has expressed a willingness to approve more spending with some sources suggesting they could go up to as high as $2 billion.
  *   Unemployment benefit extension: There may have been movement on the most prominent source of the deadlock. It looks like the Senate may have moved up their cap for an extension in federal unemployment benefits up from their original $200/week limit. Yesterday, Newsweek reported that Senate leader Mitch McConnell has told reporters that he is 'prepared to support' a package that extends unemployment benefits by $600 per week if everyone else was on board with it." And CNN reported yesterday the White House has come up to $400 while House Dems are still holding out for the original $600/week level that had been in force but expired last week.
  *   White House orders? While the President has indicated a readiness to issue an Executive Order that force a deal on the unemployment and eviction moratorium extensions, neither the House nor the Senate appear to be taking that seriously and question his authority to do so.
  *   All sides essentially still agree on funding for schools, $1,200 in stimulus payments extension of a moratorium on evictions, an extension on telehealth, the Paycheck Protection Program and jobs.

Stimulus Talks Near Brink of Collapse After Rancorous Meeting
By Erik Wasson, Steven T. Dennis, and Laura Litvan  Bloomberg News August 7, 2020

Negotiations on a new coronavirus relief bill edged toward the brink of collapse after a meeting Thursday between White House officials and top congressional Democrats ended with each side accusing the other of being unwilling to compromise and the biggest issues far from resolved.

The four negotiators, House Speaker Nancy Pelosi, Senate Democratic leader Chuck Schumer, White House Chief of Staff Mark Meadows and Treasury Secretary Steven Mnuchin, emerged from a more than three-hour meeting with little to show and with no guarantee they would resume talks on Friday.

Mnuchin and Meadows said that while talks made progress on a few areas of possible compromise, there still are disagreements on the topline numbers for a stimulus bill and on the biggest individual provisions, including aid to state and local governments that Democrats want.

"The differences are still significant," Meadows said.

Pelosi said Republicans are not facing up to the gravity of the economic calamity confronting the U.S. Schumer said the meeting was "disappointing" because the White House wasn't willing to meet them in the middle.

"We are very far apart," Pelosi said. "It's most unfortunate."

The talks began under the pressure of expectations from financial markets and the threat from President Donald Trump that he'll act unilaterally to restore some of the stimulus measures that ran out during a stalemate in Congress.

Meadows and Mnuchin said they will consult with Trump and call Pelosi and Schumer Friday to determine if it makes sense to meet. Schumer made clear Democrats are willing to keep talking.

Friday's release of the Labor Department's July jobs report may influence whether talks resume. While high-frequency data have indicated a slowdown in economic activity in recent weeks, the report is forecast to show another positive, though modest, gain in jobs. Still, the unemployment rate is expected to remain higher than it was at the peak of the deep recession that followed the financial crisis in 2008.

If the jobs report comes in better than expected, it could stiffen the resistance of the White House to spending anywhere close to $3.5 trillion Democrats have been demanding in the talks. A worse than expected report could hasten them to a conclusion.

In the meantime, the $600 a week supplemental unemployment insurance payment from the last stimulus has run out for millions of jobless Americans and remains one of the biggest sticking points in the talks. Republicans want to cut the benefit, while Democrats are demanding it be extended. Other provisions of the March stimulus also have run dry or are about to...

Both parties continued to send brickbats each other's way all week, and that continued Thursday night with both sides assigning blame for the failure to make progress.

"They were unwilling to meet in the middle, they said it mostly has to be their way and they admitted that," said Schumer.

Meadows said Trump may go through with taking executive action after "coming to the realization that perhaps some of our Democrats both in the House and Senate are not serious about compromise and are not serious about trying to meet the needs of the American people."

Democrats have proposed a $3.5 trillion dollar package that passed the House in May, while Republicans countered last week with a $1 trillion proposal.

Aid for state and local governments was a major source of the antagonism Thursday night.

Mnuchin said Trump won't agree to a "bailout" of state and local governments with existing budget difficulties, though he is open to some aid related to Covid-19 and to help firefighters and police. Democrats are demanding nearly $1 trillion in aid and warn of massive public sector layoffs in revenue starved areas.

The rest of Congress is in a period of suspended animation waiting for a resolution. Senators jetted home Thursday afternoon, joining House members who departed Washington last week. Majority Leader Mitch McConnell is leaving the negotiating to the White House and Democrats, who control the House.

He said senators would subject to recall for any votes. House leaders have also said members would return with 24 hours notice once there's a deal to vote on.
- With assistance by Claire Ballentine, and Vildana Hajric

www.bloomberg.com%2Fnews%2Farticles%2F2020-08-07%2Fstimulus-talks-near-brink-of-collapse-after-rancorous-meeting<http://www.bloomberg.com%2Fnews%2Farticles%2F2020-08-07%2Fstimulus-talks-near-brink-of-collapse-after-rancorous-meeting>

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