Bipartisan group splits stimulus proposal into two parts, calls it 'a Christmas miracle'
The bipartisan legislature split its initial $ 908 billion incentive framework into two parts - one containing provisions that Republicans and Democrats agree on, and one that tied their two sticking points - to before the end of the year get a deal.
"We saw a Christmas miracle in Washington," said Senator 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 package contains provisions that are mutually supportive, including the extension of two expiring unemployment programs, additional $ 300 per week unemployment benefits, a second round of the paycheck protection program, rental assistance, student loan forbearance, and Funding for tests. Tracking and distribution of vaccines, among others.
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The second bill contains only two provisions: corporate liability protection, which some Democrats refer to as a "poison pill," and $ 160 billion in state and local government aid that Republicans - including Senate Majority Leader Mitch McConnell (R-KY) - have referred to as a "Blue State Bailout."
Senator Joe Manchin (D-WV) speaks with a non-partisan group of Democratic and Republican Congressmen as they announce a proposal for a Covid-19 relief bill on Capitol Hill on December 1, 2020 in Washington, DC. (Photo by Tasos Katopodis / Getty Images)
None of the proposals include a second round of economic reviews, a provision that has been supported by Democrats, Republicans and the White House in previous negotiations.
"The split could help Leader McConnell in the process," Mark Harkins, a former congressional officer and senior fellow at the Government Affairs Institute in Georgetown, told Yahoo Money. "But it's unclear what will happen if the Senate passes the smaller bill and the House rebuilds state and local aid."
The $ 784 billion proposal contains the provisions that Republicans and Democrats agree on. (Source: Office of Senator Joe Manchin (D-WV))
"If we can get that, we want to get it"
McConnell proposed the new $ 748 billion last week as a compromise between the two parties.
"What I recommend is that we get rid of liability and put state and local regulations aside and pass on the things we can agree on," McConnell then told reporters. "We'll be back after the first of the year."
While the Democratic leaders initially rejected McConnell's proposal, some key Democrats may be ready to approve a stripped-down deal. Majority Leader Steny Hoyer (D-MD) signaled that without funding from the state and local government, he would strike a deal to "get the essentials done," he told CNN on Sunday.
"We think state and local are important, and if we can get that, we want to get it," said Hoyer. "But we want to help people who are really, really struggling and who are at great risk."
Both the Unemployment Pandemic Support Program (PUA) and the Pandemic Unemployment Compensation Program (PEUC) will expire on December 26, unless Congress enters into a business cycle agreement.
Up to 12 million Americans are expected to lose unemployment benefit coverage when two programs passed under the CARES Act expire on December 26th. The federal eviction moratorium, paid sick leave, aid to state and local governments, and other facilities will also no longer apply.
The $ 784 billion bipartisan proposal comes at a much lower price than the $ 2.2 trillion version of the HEROES Act that the Democrats pushed forward in the final stage of the talks, as well as the $ 908 billion that the bipartisan group had originally proposed.
Whether the Democrats approve the $ 748 billion proposal may be critical to whether Congress reaches an agreement in the Lame Duck session. However, it is unclear whether they will agree to a package that includes just $ 188 billion in new funding.
"It's impossible to predict with any degree of confidence," said Harkins. "This could be what kills all of the effort."
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Denitsa is a writer for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova.
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