Senate Republicans released their proposal for a third coronavirus relief package Thursday as Washington pushes to try to head off economic disaster.
The 247-page legislation introduced by Senate Majority Leader Mitch McConnell, expected to cost at least $1 trillion, includes cash payments to Americans. The measure — the final form of which will be subject to talks with Democrats and the White House — also includes relief for small businesses and major industries hammered by the global pandemic.
“We’re here, and we are ready to act as soon as an agreement with our colleagues across the aisle can be reached,” the Kentucky Republican said in releasing the plan that aims to avert calamity as the outbreak grinds American life to a halt.
McConnell said the bill includes four major components: “direct financial help” for Americans, “rapid relief” for small businesses, “significant steps to stabilize our economy” and “more support” for health-care professionals and patients.
The bill extends $108 billion to ailing big businesses, including airlines, loans to small businesses with less than 500 employees and the potential for student loan deferral up to three months.
Here are some of the details of the plan, according to Senate Republicans:
- Cash payments of up to $1,200 would go to individuals, with up to $2,400 for couples. The sum would increase by $500 for every child. The check totals would start to phase out above $75,000 in adjusted gross income based on 2018 tax returns. People with no federal tax liability would get only $600.
- Extend the tax filing deadline to July 15 from April 15.
- The ability for corporations to delay estimated tax payments until Oct. 15. Employers and self-employed people could delay payroll taxes.
- Up to $50 billion for airlines, $8 billion for cargo air carriers, and $150 billion for other severely distressed businesses. The government has the right to “participate in the gains” of any business it lends money to.
- For two years, no executive at a company receiving a business loan making more than $425,000 in total compensation can get a raise. Executives whose salary has already been determined through collective bargaining agreements may be exempt from that restriction.
- Small business loans for any company with less than 500 employees. The cap of that loan is either $10 million or the average of monthly payments. Businesses use the loan to pay for payroll including paid sick leave, salaries, mortgages, rent, utilities or other debt obligations.
- Forgiveness of the parts of the loan used for payroll if companies do not fire workers before June 30.
- Private health plan coverage of testing without cost-sharing and increase funding for community health centers. It also aims to spur the hiring of more health care professionals to fight the pandemic.
- The potential to suspend federal student loan payments for up to three months.
Not long after its release, Democrats slammed the Republican proposal.
“We are beginning to review Senator McConnell’s proposal and on first reading, it is not at all pro-worker and instead puts corporations way ahead of workers,” said House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer in a statement.
Democrats have made clear they want the third legislative package to focus on workers and individuals battling the crisis.
The Republican bill allocates up to $50 billion for airlines, $8 billion for cargo air carriers, and $150 billion for other severely distressed businesses
While the Republicans’ plan does cap the salary of executives who work at companies accepting federal aid, it does not ban buybacks or forbid worker layoffs.
Meantime, an aid for the Democratic House Appropriations Committee said the committee is disappointed in the lack of supplemental funding for federal, state and local response. States have been funneling resources to funding the battle against the virus.
“The Appropriations Committee is working on robust funding for a strong federal, state, and local coronavirus response to include in the phase three bill. Supplemental appropriations are an essential part of a whole-of-government strategy to address this pandemic and it is irresponsible for Senate Republican leadership to omit these needed resources from its proposal,” he said in a statement.
The pushback from Democrats comes as Congress has been under immense pressure to get a deal done with the House and Trump administration as quickly as possible. The ailing U.S. airline industry, which is expecting financial relief from the package, has rung the alarm of the catastrophic impact the halt in travel has on business. It is unclear how much longer companies can stay afloat without federal relief.
Workers have lost jobs at shuttered restaurants and bars. Lawmakers have expressed particular concern about how the global pandemic will hit American small businesses.
Adding to the urgency, two congressmen have tested positive for the coronavirus, while others are in self-quarantine.
Key parts of the bill could change as Democrats and Republicans negotiate. Howard Gleckman, a senior fellow at the Urban-Brookings Tax Policy Center, expects Democrats will not support the direct payment proposal as currently structured.
Referring to the stipulation that individuals who paid no federal tax in 2018 would get only $600, he said “the idea that you would give low-income people less money than upper-income people just doesn’t make any sense as policy.” He said one potential alternative is giving everyone the same sum and then taxing it as income, so lower-income individuals will effectively end up with more than people with higher incomes.
Once the Senate strikes an agreement and passes a relief package, it will head to the House, which is on a temporary recess. House Majority Leader Steny Hoyer told members Thursday that the chamber would not return until it is “in a position to vote on the third piece of emergency legislation to respond to the economic impact of this crisis.”
Meantime, McConnell indicated that even this next legislative package, likely to top $1 trillion, may not be enough to offer sufficient government relief as business across the U.S. economy grinds to a halt.
“This may not be the last piece of economic legislation we pursue,” he said.
Graham acknowledged the importance of getting the third proposal done quickly — by early next week.
“If we don’t, we’re going get our ass kicked,” he said Thursday. “So that’s why I think we have to do it. I’ll be the first to kick myself.”