Last updated 10/1/20 at 8:44 p.m. Seattle time.
House Democrats passed a $2.2 trillion relief bill Thursday night, October 1, 2020, after the parties failed to reach a deal during another day of negotiations. The bill is a negotiating chip that won’t make it through the Senate. Pelosi said the parties are still talking, but the odds of an agreement don’t look encouraging.
While the parties agreed some time ago on another round of $1,200 direct payments, more small business loans, and more aid to airlines, CNBC reports “they still need to resolve disputes over state and local government aid and liability protections for businesses, among other topics.”
Those issues, along with total cost, have been the sticking points all along, and the parties are still at impasse on at least some of them. On Thursday morning “Pelosi sounded frustrated” and complained that Republicans don’t “share our values,” according to CNBC’s latest reporting.
Still, there appears to be some movement. Republicans have resisted spending more than $1 trillion and Democrats have insisted on spending at least $2 trillion, but Mnuchin, negotiating for the White House, now appears willing to split the difference at $1.6 trillion. But even if Democrats accept that figure, the other issues remain hurdles.
Trump has adamantly opposed aid to state and local governments; Democrats have insisted on it. CNBC says the GOP’s $1.6 trillion GOP “includes $250 billion for state and local government relief,” which would be a major Republican concession and a breakthrough in principle on that issue, but Democrats are still holding out for $400 billion of such aid.
The parties agree in principle on extending federal enhanced unemployment benefits, but Democrats want $600 a week, while Republicans are offering $400 a week in their current proposal.
I don’t know how negotiable liability protection is; that basically involves shielding employers from lawsuits by employees who go back to work and get Covid-19 in the workplace. Possibly that could be resolved by the government guaranteeing the medical expenses and lost wages of those workers, but I can’t see the Democrats giving businesses legal immunity without some type of recourse for workers.
(Read that report here.)
Airlines are carrying about 30% of normal passenger traffic, so they have some revenue coming in, but not enough to keep furloughed workers on payrolls indefinitely. They were given money to pay those workers through September 30. That money has now run out, and United and American announced they will begin layoffs immediately; Delta says it can hang in a little longer.
Congress has until Friday to pass a relief bill. Then, everybody packs up and goes home to campaign for re-election. So it truly is the 11th hour. Wall Street some time ago assumed there won’t be a relief bill this year, and that’s my thinking, too. I think there’s some room for give-and-take, and both sides have a bit of wiggle room, but the Republicans would mostly have to cave in to settle this.