money Bipartisan group splits stimulus proposal into two parts, calls it 'a Christmas miracle'
Bipartisan lawmakers split their initial $908 billion stimulus framework into two parts — one with provisions that Republicans and Democrats agree on and one that marries their two sticking points — in a final effort to get a deal done before the end of the year.
“We've had a Christmas miracle occur in Washington,” said Sen. Susan Collins (R-ME), who supports both bills. “I want to thank my Democratic and Republican colleagues in the Senate for working so hard to bring us to this day.”
A $748 billion stimulus bill includes provisions both parties support, including the extension of two expiring unemployment programs, an additional $300 a week in jobless benefits, a second round of the Paycheck Protection Program, rental assistance, student loan forbearance, and funding for testing, tracing and vaccine distribution, among others.
The second bill includes just two provisions: Liability protections for businesses that some Democrats characterize as a “poison pill” and $160 billion for state and local government aid, which Republicans — including Senate Majority Leader Mitch McConnell (R-KY) — have called a “blue state bailout.”
Neither proposal includes a second round of stimulus checks, a provision supported by Democrats, Republicans and the White House in earlier negotiations.
“The split could help Leader McConnell with the process,” Mark Harkins, a former congressional staffer and senior fellow at Georgetown’s Government Affairs Institute, told Yahoo Money. “But it is unclear what happens if the Senate passes the smaller bill and the House adds back in the state and local aid.”
‘If we can get that, we want to get it’
The new $748 billion is what McConnell proposed as a compromise between the two parties last week.
“What I recommend is we set aside liability and set aside state and local and pass those things that we can agree on,” McConnell told reporters then. “We'll be back at this after the first of the year.”
While Democratic leaders initially turned down McConnell’s proposal, some key Democrats may be ready to agree to a slimmed-down deal. Majority Leader Steny Hoyer (D-MD) signaled he’ll take a deal without the state and local government funding to “to get the essential done,” he told CNN on Sunday.
“We think state and local is important, and if we can get that, we want to get it,” Hoyer said. “But we want to get aid out to the people who are really, really struggling and are at grave risk.”
Up to 12 million Americans are expected to lose unemployment benefits coverage when two programs enacted under the CARES Act expire on December 26. The federal eviction moratorium, paid sick leave, aid to state and local governments, among other relief, also will lapse.
The $784 billion bipartisan proposal has a much lower price tag than the $2.2 trillion version of the HEROES Act Democrats were pushing throughout the most recent phase of talks, as well as the $908 billion that the bipartisan group initially proposed.
Whether Democrats agree to the $748 billion proposal may be key to whether Congress reaches a deal in the lame-duck session. But it’s unclear if they’ll agree to a package that has only $188 billion in new funding.
“Impossible to predict with any level of confidence,” Harkins said. “This could be what kills the entire effort.”
Denitsa is a writer for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova.
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