September 23, 2020

Republicans, Deeply Divided on Virus Aid, Near Agreement on Opening Offer

WASHINGTON — Conservatives are apoplectic about its $1 trillion cost. Embattled mainstream Republicans are desperate to act quickly and aggressively to show voters they are doing something about the pandemic and resulting recession. And President Trump keeps insisting on proposals, like a costly payroll tax cut, that will do nothing to help tens of millions of jobless Americans and even members of his own party do not support.

The debate over the next round of coronavirus relief has exposed deep divisions among Republicans over spending and policy, leaving the fate of a huge economic rescue package in limbo as the virus surges around the country and posing an election-year dilemma for a party already facing a grim political landscape.

After three marathon days of talks, Senate Republican leaders and White House officials expressed confidence on Wednesday evening that they had reached an agreement in principle on a proposal that would dole out more than $100 billion to schools, send additional checks directly to Americans and provide $16 billion for states to conduct testing and contact tracing. But some of the biggest issues, including what to do with enhanced unemployment insurance and Mr. Trump’s payroll tax cut idea, were not finalized.

In a sign of their differences, some Republican senators suggested at one point Wednesday that they might pursue a short-term extension of the enhanced unemployment benefits expiring next week to buy more time to reach a final agreement. Even that idea sparked infighting: Conservatives loathe the extra $600-per-week benefit, regarding it as a disincentive to work, and the White House chief of staff panned it.

And Republicans have not even begun to negotiate with Democrats, who are pushing for a rescue package three times as large.

“Nobody’s stabbed anybody or anything,” said Senator John Kennedy, Republican of Louisiana, describing the dynamic inside of his party as lawmakers bicker over the bill. But, he said, “I don’t think you can say there is a consensus.”

Democrats, who have hammered Republicans for not acting on a $3 trillion recovery measure the House passed in May, have refused to budge from their starting position until Republicans produce an opening bid.

“The Republican Party is so disorganized, chaotic and unprepared that they can barely cobble together a partisan bill in their own conference,” said Senator Chuck Schumer of New York, the minority leader.

Republicans had hoped not to find themselves here at all. After passing the $2.2 trillion stimulus law, they hit pause — as Senator Mitch McConnell of Kentucky, the majority leader, repeatedly said — on another economic rescue package, predicting that the virus would subside and a far less expansive measure would be needed this summer.

Now, with the coronavirus surging, jobless aid set to expire in 10 days, and their re-election races less than four months away, they are stuck assembling a $1 trillion measure that they privately concede will probably grow substantially before their negotiations with Democrats conclude, ideally before both chambers are scheduled to leave Washington in August.

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Updated 2020-07-23T01:20:15.569Z

“Everyone assumed months ago schools would be reopening, the economy would be re-engaging. That is not necessarily true in many places,” Senator James Lankford, Republican of Oklahoma, said Wednesday. “So while I understand ‘hey, you have had months and months of time,’ every week the ground shifts on us and you have to be careful with other people’s money.”

Republicans spent Wednesday trying to finalize their opening bid. In a nod toward fiscal hawks, Senate leaders were discussing the possibility of including deficit-reduction measures in the bill, such as a bipartisan commission championed in a recent op-ed by Senator Mitt Romney, Republican of Utah.

The measure is taking shape as Mr. Trump’s unpopularity drags down Republicans’ electoral fortunes, putting their Senate majority in peril and sharpening a debate over how the party should define itself.

In the House, too, Republicans have been feuding among themselves, embittered by their political situation and competing to shape their party’s message. In a private meeting on Tuesday, a group of Trump loyalists heaped criticism on Representative Liz Cheney of Wyoming, the No. 3 House Republican, for being insufficiently supportive of the president. Ms. Cheney, a staunch conservative, has questioned Mr. Trump’s national security policies and broken with him at times on his approach to the coronavirus.

In the Senate, Republicans were discussing a rescue package that would send additional checks directly to families, provide more assistance for small businesses and allocate $105 billion for schools. Of those funds, $70 billion would go to elementary and secondary schools, with half reserved for schools that are holding in-person classes, and another $30 billion for colleges and universities.

The proposal, which is to be presented as soon as Thursday, is also expected to include $16 billion for states to conduct testing and contact tracing, according to a person familiar with the discussion, as well as $4 billion to assist with the global distribution of a vaccine. Republicans had initially proposed substantially more money for those items, and the administration at first balked at including any.

At lunch on Tuesday with Treasury Secretary Steven Mnuchin and Mark Meadows, the White House chief of staff, Senator Bill Cassidy, Republican of Louisiana and a doctor, said he thought he was on acid when he heard the administration’s view, according to people familiar with his remarks.

But on Wednesday, Mr. Mnuchin said there was broad agreement.

“We’ve now had three days of meetings, and we are now completely on the same page,” he said Wednesday evening as he and senior lawmakers announced the contours of the agreement. “We are all in good shape.”

They would not discuss how they planned to address the looming expiration of the unemployment benefits and the administration’s demand for a payroll tax cut. Many lawmakers oppose including a payroll tax cut because it is costly and would only help employed people at a time when the pandemic has displaced millions of workers.

Mr. McConnell, who not only is battling to maintain his narrow Senate majority but is on the ballot himself this fall in a state badly hit by the virus, will shoulder most of the burden of trying to pull together his fractious conference.

“We’re hopeful we’ll be able to get there,” Mr. McConnell said earlier Wednesday when asked about the political effects of a failure to reach agreement. “This discussion has just really begun in earnest.”

Mr. McConnell, whose meticulous maintenance of his majority has been a hallmark of his time as leader, also has a keen sense of the political stakes. Scott Jennings, a longtime adviser to Mr. McConnell, said polling suggests the position of archconservatives arguing for Congress to do nothing would not fly with voters.

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“This isn’t solved,” Mr. Jennings said. “The pandemic is still here. The carnage is still real, and the voters are still keenly aware of what their incumbents are doing.”

One of those vulnerable senators, Thom Tillis of North Carolina, said Wednesday that he would support delaying the August break until lawmakers pass something “helping people that are hurting.”

Another, John Cornyn of Texas, downplayed concerns about the effect of the package on the nation’s deficit.

“People are concerned about that, but I also tell them in World War II, while we were fighting Hitler, we weren’t thinking about how much it costs,” he said. “We were thinking about survival, and that’s my first priority here.”

ImageA coronavirus testing site in Miami on Wednesday.
Credit…Saul Martinez for The New York Times

The risk to the nation’s health and economy is real. Death counts are again on the rise. And the economic rebound has stalled while infections surged across the South and the West. After climbing rapidly in late April and May, small-business openings and revenue plateaued in June and have fallen in recent weeks. Improvements in hotel occupancy, air travel and restaurant diners have also flatlined or turned negative.

Still, conservatives, including the party’s most outspoken firebrands like Senators Ted Cruz of Texas, Rand Paul of Kentucky and Mike Lee of Utah, are threatening to lay themselves down on the tracks to stop any bill they see as fiscally imprudent. They worry that if they get into a spending war with Democrats, voters will give Republicans little credit for supporting the aid while conservative voters will be furious with them.

“I am not going to authorize a dime until I understand what we’ve done,” Senator Ron Johnson, Republican of Wisconsin, told reporters on Wednesday.

Conservative activists, and some conservative economists, are particularly focused on cutting off emergency federal economic assistance like the expanded unemployment benefits. They argue that the additional benefits discourage Americans from returning to work and are sounding the alarms over the trillions of dollars in new federal borrowing that have financed the crisis response.

Mr. Lee invited one such group, the Foundation for Government Accountability, to share polling with Republican senators over lunch on Wednesday.

Republicans have said they want to scale back the unemployment benefits, which amount to more than some workers earn in wages. That would result in a severe cut to the benefit received by millions of jobless Americans.

Many Republicans feel that Mr. Trump has dispatched two flawed negotiators in Mr. Mnuchin, whom they regard as a former Democrat willing to spend vast sums of money, and Mr. Meadows, who spent his years in Congress thwarting large spending deals of the kind now under discussion.

“We’re optimistic that we can continue to find a real solution,” Mr. Meadows told reporters at the Capitol on Wednesday, “and hopefully, reach a compromise with Democrats.”

Luke Broadwater contributed reporting.