Details of the White House’s counteroffer to Democrats’ updated Heroes Act emerged last night. Treasury Secretary Steven Mnuchin proposed a $1.62 trillion relief bill, which included more funding for state and local governments as well as an extension of federal unemployment benefits at a rate of $400, according to Lindsey McPherson of Roll Call, who first reported on the details. The size of the offer and movement on key sticking points helps explain why there is a modicum of new hope that a bipartisan agreement could be achieved. “The president instructed us to come up significantly, so we have come up from the trillion dollar deal,” Mnuchin said.
Here’s What The White House’s $1.6 Trillion Stimulus Package Offer Includes:
- $250 billion for state and local governments: This was one of the first times that a Republican proposal increased the potential funding for state and city governments whose budgets are hemorrhaging due to the increased costs and reduced revenues of the pandemic. The $250 billion still falls short of the $436 billion Democrats had included in the updated Heroes Act, but the gap between the two is significantly smaller with a demonstrated willingness to compromise.
- $400 extension of federal unemployment benefits: The other major spending sticking point had been the level of federal aid for the millions of unemployed workers. Mnuchin offered $400 in weekly benefits, which would be retroactive to September 12 and last through the end of the year. The proposal differs from Pelosi’s updated Heroes Act, would continue benefits at a rate of $600 a week; however, it is higher than the $300 that Senate Republicans had proposed.
- $1,200 Second Stimulus Checks: Mnuchin’s offer appears to include another round of direct payments to Americans. According to a source familiar with the offer, there is directional consensus on continuing the framework used for the first round of payments with $1,200 for qualifying adults and $500 for qualifying dependents. “We have reached an agreement that if there is a deal, there are direct payments similar to last time that are in the package,” Mnuchin said on Fox Business last night.
- $150 billion for education funding: The White House’s new proposal included $150 billion in education funding. While this is lower than the $225 billion the Democrats proposed, this is a gap that should be easier to reconcile. “There’s general agreement needs have increased as schools across the country at are different phases of reopening for in-person learning,” wrote Roll Call’s McPherson.
- $75 billion for coronavirus testing and tracing: In a critical concession, Mnuchin fully matched Democrats, offering $75 billion for Covid-19 testing and tracing expansion. This is a $59 billion increase over the prior offer by Republicans and a tacit acknowledgement that the original amount was not in line with the scale of expansion needed.
- $50 billion for vaccine production and distribution; $50 billion for hospitals and health care workers: Coupled with testing and tracing, the total health care spend in the new White Offer is $175 billion. This is $74 billion lower than what Democrats would like to offer, but also appears to be an easier gap to reconcile.
- $15 billion for food assistance: Mnuchin’s counter offer appears to be in line with Democrat’s to provide additional nutrition aid to low-income Americans via the Supplemental Nutrition Assistance Program (SNAP).
- $10 billion for the U.S. Postal Service: Mnuchin proposed $10 billion in direct aid to the U.S. Postal Service. This is $5 billion lower than what Democrats had proposed in the updated Heroes Act. (The bill passed by House Democrat back in May proposed $25 billion.)
Additional details of the White House offer include:
- $160 billion for the Paycheck Protection Program (PPP) to help small businesses
- $10 billion targeted at helping minority-led businesses
- $120 billion in aid to restaurants and live ventures, with $20 billion earmarked specifically for airlines
- $28 billion in student loan relief
- $60 billion in rental and mortgage assistance
- $25 billion in help for child care providers
- $20 billion in aid for farmers
White House Still Needs To Convince Senate Republicans
While the White House offer is closer to what Democrats most recently proposed, it still needs to convince Senate Republicans to agree to a final plan. Republican leaders had publicly stated opposition to the cost of the updated Heroes Act. Senate Majority Leader Mitch McConnell said that asking Senate Republicans to approve up to $2.2 trillion “is outlandish.” and told reporters, “It’s safe to say we’re far apart.” His sentiment was reinforced by Senator John Thune, who said that any bill over $1 trillion would risk fragmenting the GOP. “As the price goes up, the Republican vote total goes down,” he said.
Following his meeting with Pelosi on Wednesday, Mnuchin updated McConnell. “McConnell signaled he could begrudgingly get enough votes to pass the plan Mnuchin laid out if Democrats sign off on it,” according to Roll Call’s source who described Mnuchin’s offer; however, this was disputed by a spokesman for McConnell.
Senate Republicans had initially offered $1 trillion for the next stimulus package, but then reversed course and voted on a $300 billion deal in an effort to unify the caucus. White House pressure may help McConnell pitch a higher cost plan and gain additional votes, while Democratic support would allow some wiggle room to ultimately pass a bill. It is hard to imagine Republicans agreeing to any proposal higher than $2 trillion, but that would still leave opportunity for a bipartisan deal.
Another opportunity is to incorporate automatic stabilizers that would provide additional aid if certain milestones in fighting the virus aren’t hit. For example, extending federal unemployment aid could be directly tied to certain macroeconomic conditions, like the unemployment rate. Automatic boosters were a key component of a $1.5 trillion bipartisan plan put forward by the House’s Problem Solvers Caucus. They could prove critical by keeping the headline cost of a bill down, which may placate Senate Republicans, while still leaving a direct avenue for additional aid.
The time to strike an agreement is starting to run short. The White House’s latest offer is a meaningful movement towards compromise. If there is any chance at a bipartisan agreement, it should emerge later today when Mnuchin and Pelosi resume talks.
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