Senate GOP’s ‘opening offer’: too little, too late, and DOA in the House

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The total US death toll from the virus to more than 147,000 as of Monday, according to data from Johns Hopkins University.

Medical researchers project up to 175,000 deaths linked to the virus by August 15, according to an ensemble forecast published by the US Centers for Disease Control and Prevention.

Lockdowns and stay-at-home orders may be the only tools left in the tool box to get control of an out-of-control spread of the coronavirus pandemic.

This is the position of more than 150 prominent medical experts, scientists, teachers, nurses and other experts who signed a letter urging leaders to shut the country down and start over to contain the rampant spread of the virus.

“Right now, we are on a path to lose more than 200,000 American lives by November 1st. Yet, in many states people can drink in bars, get a haircut, eat inside a restaurant, get a tattoo, get a massage, and do myriad other normal, pleasant, but non-essential activities,” read the letter, which was sent to the Trump administration, members of Congress and state governors.

Shutting down the economy again will require Congress to “go big” to meet the size and scope of the economic challenge.

Unfortunately we have the “Grim Reaper” of the Senate, Mitch McConnell, and his Republican cohorts who do not see the coronavirus pandemic as big a problem as it is, and they do not want to spend any more money on an economic rescue for you “takers” who are drawing more unemployment benefits than your wages at your former job which was shut down by the government – and may never come back.

After allowing the “safety net” provisions of the CARES Act enacted in March to expire on Friday, Senate Republicans are only now putting forward their opening offer in negotiations today, a bill that has no support among Democrats and has no chance of passage in the House. They aren’t serious.

NBC News reports, Senate Republicans move to cut $600 weekly jobless benefit by two-thirds:

Senate Republicans are moving to cut the expiring $600 weekly federal unemployment bonus to $200 per week in a new coronavirus aid package that they released Monday.

The $200 flat benefit would last for about two months as states transition to a system that grants unemployed people 70 percent of their wages prior to losing their job.

This plan goes from bad to worse. Relief payments could take months or more to adopt a White House proposal for modifying the benefits, according to memos obtained by NPR. State Unemployment Agencies Could Take Months To Adapt To WH Proposal, Memos Show:

Such a lag could mean that the roughly 30 million people currently collecting pandemic-related unemployment benefits would see their income drop from a weekly average of $900 to an average of $300 per week.

The proposal would cut emergency unemployment benefits to roughly 70% of a person’s lost wages — a more complicated calculation than the current, flat $600.

Critics have warned since March that such a proposal would undermine efforts to speed relief to millions of people out of work due to the coronavirus. The potential delays are so significant that the U.S. Department of Labor told Congress in May that it “strongly” opposed such a change because states would find it “exceedingly difficult if not impossible to implement.”

The National Association of State Workforce Agencies told lawmakers on Capitol Hill that it would take most states eight to 20 weeks to move to a system of awarding weekly benefits on a sliding scale based on the worker’s wages before losing their job, according to a copy of the memo obtained by NPR.

“States would find it exceedingly difficult, if not impossible to implement a unique payment amount in addition to the various benefit payments to which the [Federal Pandemic Unemployment Compensation] applies,” the department told the House Ways and Means Committee, according to a document obtained by NPR.

What effin’ genius is responsible for this damn fool idea?

To mitigate concerns that a wage replacement structure is too complicated to set up, the GOP proposal is expected to let states apply for a waiver with the Department of Labor to continue the flat payments for up to two additional months if they cannot meet the deadline to switch the formula.

“They can all do this transition, will just take some time, so we are giving them time,” one of the aides said. All three spoke on condition of anonymity to describe unreleased details of a bill.

CNN provides some additional details. Stimulus negotiations: GOP’s $1 trillion opening bid would cut unemployment benefits:

The Senate Republican proposal will sit around $1 trillion [too small] and include $105 billion for schools, a second round of direct payments to individuals and families [Kudlow says $1,200], $16 billion in new money for testing, a second, more targeted round of forgivable small business loans from the Paycheck Protection Program, a myriad of tax incentives for employers to rehire, retain and retrofit their offices for employees. It will also include Senate Majority Leader Mitch McConnell’s redline: liability protections for businesses, schools, hospitals and non-profits.

This is a deal breaker for Democrats who want an OSHA regulation for employee safety tied to a safe harbor provision for employers, rather than a blanket liability exemption.

One thing there hasn’t been much talk about on the GOP side in recent weeks has been what they planned to do about the federal eviction moratorium that expired last week. Well, CNN’s Jake Tapper got White House economic adviser Larry Kudlow, the director of the National Economic Council, to tip their hand on that Sunday.

“We will lengthen the eviction” moratorium, Kudlow said. “We will lengthen it.”

Hey genius, the federal eviction moratorium has already expired on Friday. I have no doubt that in states without a state eviction moratorium, landlords are in court today evicting tenants right now. What are you doing to help them?

Both Mark Meadows, the White House chief of staff, and Treasury Secretary Steven Mnuchin used appearances on Sunday news talk shows to float the idea of moving forward on a narrow set of issues, most notably an extension of the federal unemployment benefit, while saving the broader issues for future legislation.

“Perhaps we put that forward, get that passed, as we can negotiate on the rest of the bill in the weeks to come,” Meadows said on ABC News’ “This Week.”

This was planned, sources tell CNN. Over the last several days, they have made clear in talks with Senate Republicans that they don’t view a broad deal as feasible given where Democrats stand at the moment. The Sunday comments were meant to test the waters and lay the groundwork for moving forward on a scaled-back deal this week.

The goal is two-fold — first, try and get something done before the Friday deadline on unemployment benefits, and given the scale of the proposals, narrowing to a few key issues can help spur talks.

Second is to try and jam Democrats, either through messaging or bringing a narrow proposal up for a vote, by saying they are trying to block the unemployment extension.

Excuuuse my French, but these motherfuckers pissed away ten weeks after the House passed the Heroes Act and they did nothing last week as the safety net provisions expired, and now they want to play games trying to “jam” Democrats on the provisions they want and then pretend to negotiate in good faith for weeks on provisions that will never come up for a vote in the Senate? These people are pure evil.

Where Democrats stand

House Speaker Nancy Pelosi has made crystal clear Democrats will not settle for moving piece by piece on this round of relief legislation.

“This is a package,” Pelosi told reporters last week. “We cannot piecemeal this.”

Pelosi’s point is — like the $2.2 trillion CARES Act that passed almost unanimously in March — the pieces of this measure are designed to be interconnected. Direct payments tie in with unemployment benefits, which are bolstered by the small business loan program, which are all connected incentives for employers to try and retain or rehire workers.

Split one or two pieces off and it creates a hole — one that’s unlikely to be filled. McConnell himself has made clear this will be the final relief package, and his members grow less and less amenable to new spending by the day.

NBC News adds:

Senate Minority Leader Chuck Schumer, D-N.Y., blasted Republicans for being “content to do nothing for three long months” and releasing a bill that some Republicans remains the object of internal GOP disagreement.

“The White House and Senate Republicans couldn’t get their act together and wasted precious time,” he said, accusing them of operating with a “lack of any urgency or empathy” for struggling people and saying their emerging plan “ignores” multiple crises in America.

CNN continues:

Graham’s astute point

If you’ve paid attention to this note the last two months, you’d recall regular mentions about how drastically things have shifted inside the Senate Republican conference in terms of this relief package. Week after week, senators and aides have told CNN just how divided the conference is in their closed-door lunches about new spending, and what the next bill should look like. It’s the primary reason McConnell took so much time in crafting the GOP’s opening offer and there is no sense Republicans will be lining up behind any final deal in large numbers in the days or weeks ahead.

Sen. Lindsey Graham, a South Carolina Republican who has been in those lunches, put it bluntly (and fairly accurately based on my back-of-the-envelope math) on Fox News: “Half the Republicans are going to vote no to any Phase 4 package. That’s just a fact.”

* * *

To make it all more complicated: Democrats are opposed to this GOP proposal.

Topline rundown of what is in the GOP proposal

      • Second round of direct payments [$1,200]
      • Some form of an extension, at a reduced rate, to the federal enhanced unemployment benefit [$200, to be reduced to 70% of wages]
      • Second round of Paycheck Protection Program loans, targeted toward the hardest hit small businesses based on lost revenue and expanded to include more flexibility to forgive money used for operational and supplier costs
      • $105 billion in education funds, split as $70 billion for K-12, $30 billion for colleges/universities, $5 billion for governors to utilize
      • $16 billion in new funds for state testing grants, plus an administration commitment to designate $9 billion in unused funds from the CARES Act (making the total $25 billion)
      • $26 billion for vaccine research and distribution
      • $15.5 billion for the National Institute of Health
      • Increased flexibility and time window for states to utilize initial CARES Act funds, but no explicit new funds
      • Liability protections to create a safe harbor for businesses, schools, health care providers and nonprofits
      • Enhanced employee retention tax credit
      • Deductions for employer purchases of testing, PPE and other supplies
      • Increase in business meal deduction to 100%, from 50% [This is a Donald Trump thing]
      • Extension of federal eviction moratorium.

UPDATE: The Republican Senate bill also includes $1.75 billion for the design and construction of a new FBI headquarters at the request of the Trump administration, CNN reports. “The Justice Department’s inspector general said last year that it would probe a decision to scrap plans to move the FBI headquarters out of Washington to the district’s suburbs, a decision that may have benefited Trump’s nearby hotel.”

This is the Senate GOP’s “opening offer”: too little, too late, and dead on arrival in the House. Republicans are completely incapable of governing or responding to a crisis.

Eric Levitz writes at New York Magazine, The GOP’s Procrastination on COVID Relief Is Inexcusable (excerpt):

Mitch McConnell’s Senate caucus has had four months to prepare for the possibility that the U.S. economy would not be strong enough in late July to withstand the sudden cessation of enhanced unemployment benefits. It has had two months to prepare an answer to House Democrats’ blueprint for the next coronavirus relief package. Instead, it botched its attempt to unveil such a bill this week and now appears unlikely to pass a new one before 30 million unemployed Americans see their weekly incomes suddenly crater.

When it passed the CARES Act in March, the congressional GOP insisted on having the bill’s $600-a-week unemployment-benefit bonus phase out at the end of July. Since then, the party has refused to approve any additional fiscal aid to states, households, or other needy constituencies on the grounds that a V-shaped recovery might soon obviate the need for further federal largesse.

[E]ven if we postulate that it was reasonable for the GOP to wait until the last possible minute before extending benefits, there would be no excuse for the party’s failure to have a relief bill ready to go just in case. Even the most bullish economic forecasters didn’t rule out the persistence of double-digit unemployment this August as a significant possibility. So why then did McConnell wait until federal unemployment benefits were about to expire to start crafting another stimulus package? And why did Republicans fail to rally behind his outline this week, forcing the majority leader to abandon the bill’s rollout on Thursday morning?

The answer to both questions appears to be this: Many congressional Republicans earnestly believe that the reason unemployment is high — in the middle of an uncontained pandemic that is killing 1,000 Americans a day — is that the excessive generosity of federal benefits has rendered the unemployed unwilling to work.

McConnell’s procrastination has been widely interpreted as a means of gaining leverage over House Democrats: Since the Donkey Party cares more about the unemployed than the GOP, best to conduct negotiations while the calendar is slowly lowering the jobless into a pit of molten lava. And this may have been part of the intention. But the majority leader doesn’t just need leverage over Nancy Pelosi to get his preferred bill enacted; he also needs leverage over his own party’s anti-spending fanatics. Given McConnell’s failure to rally Republicans behind a package this week, it seems quite likely that his procrastination was born partly out of the hope that proximity to a fiscal cliff might chasten his caucus’s anti-Keynesian true believers.

Alas, they remain unchastened.

* * *

“Let’s allow the monthly incomes of 30 million unemployed people to collapse — even as much of the economy remains inoperable — just months before Election Day” appears to be a minority position among congressional Republicans. McConnell could easily find the votes for a relief package of some kind without appeasing Paul, Johnson, and Cruz. Doing so would require securing Democratic buy-in, of course, but that will be a necessity regardless; the legislative filibuster still exists, and Democrats control the other branch of Congress. Nevertheless, McConnell would ostensibly prefer to allow federal unemployment benefits to temporarily expire than to enter negotiations with Democrats without a consensus GOP plan in tow. Thus he must find a way to talk sense into conservative hard-liners.

That’s easier said than done.

* * *

Whatever COVID-19’s ultimate impact on GDP, tens of millions of Americans will see their take-home pay fall next week if Congress does not extend existing benefits. This much we know. We also know that, absent federal aid to states and cities, public-sector job losses will accelerate in the coming months, a development that will not only increase unemployment among government workers but also sap demand for private-sector businesses. Cuts to state-level public investment will further erode economic demand at a time when private firms are cutting capital expenditure. Furthermore, withholding fiscal aid from states may also undermine public-health efforts to contain the virus. There is some evidence that U.S. states have opened prematurely out of a desperate desire to restore sales and income-tax revenues to compensate for a dearth of federal support. All of this will deepen the recession and weaken the recovery.

[T]he CARES Act provided states and cities with $0 in unconditional fiscal aid. A wide variety of business leaders have advised Congress that $1 trillion in such aid is needed to keep the economy afloat. Meanwhile, more than 20 million Americans are poised to be thrown out of their homes by late fall, when a moratorium on evictions in federally subsidized buildings will expire.

Even if that moratorium is extended, millions of tenants will have accumulated thousands of dollars in back rent that they have no means to repay.

* * *

McConnell must reason with colleagues who genuinely think the party can revive the economy by removing all fiscal life support.

The consequences of this madness will be most dire for America’s least enfranchised. But the harms wrought by the conservative movement’s ideological delusions will be felt by virtually all Americans — including the movement’s own congressional dogmatists.

As Alex Shepard says at The New Republic, Trump and the GOP Are About to Push the Economy off a Cliff.

Remember, the GOP “Plan B” is to do nothing, and let it all burn down.




1 COMMENT

  1. While White House economics adviser Larry Kudlow said the eviction moratorium will be extended – he lied – the actual Senate bill, dubbed the HEALS Act, will not reinstate the eviction moratorium. “Senate Republican coronavirus aid plan excludes evictions moratorium”, https://www.nbcnews.com/politics/congress/senate-republican-coronavirus-aid-plan-excludes-evictions-moratorium-n1235108

    “The moratorium was not included in a series of bills unveiled by Senate Majority Leader Mitch McConnell that constitute the party’s $1 trillion proposal, known as the HEALS Act. An aide to the Kentucky Republican confirmed that the policy isn’t part of the package.

    The exclusion of the policy sets up a showdown with Democrats, who passed a $3.4 trillion bill in the House that would extend the moratorium on evictions and foreclosures for up to one year, and expands it to cover all renters and homeowners.”

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