The White House is offering a $ 916 billion stimulus proposal as talks intensify

WASHINGTON – The White House on Tuesday offered Democrats a $ 916 billion pandemic stimulus proposal aimed at fulfilling their calls for some relief for state and local governments and corporate liability protection for top priority companies by Republicans.

The offer from Treasury Secretary Steven Mnuchin to Speaker Nancy Pelosi marked the first time since the November elections that the Trump administration held talks on Capitol Hill on how to sustain the nation’s ailing economy. It came as lawmakers tried to reach an agreement on another round of coronavirus relief before closing this year’s session, which is now set to take place next week.

The plan does not provide for a planned revival of $ 300 weekly unemployment benefits as it is anticipated that other federal unemployment programs that are due to expire in the coming weeks will be extended. Instead, there would be another, smaller round of direct payments to Americans of $ 600 per person.

“The president’s proposal must not hamper ongoing bipartisan congressional talks,” said Ms. Pelosi and New York Senator Chuck Schumer, the minority leader, in a statement saying they would cut unemployment insurance benefits from the proposed $ 180 demanded billions to 40 billion US dollars “unacceptable”.

In a statement made after speaking with the speaker on Tuesday, Mr Mnuchin revealed few details other than his intention to partially offset the cost of the package through repurposing $ 429 billion of funds from previous laws and regulations to offset the use of unspent funds from a popular federal program for small businesses that expired this year.

The proposal came about when a bipartisan group of moderate lawmakers practically met to work towards an agreement on the details of their $ 908 billion compromise plan. It was unclear how Mr Mnuchin’s proposal would affect the discussions on this package. Democratic leaders said Tuesday, “are the best hope for a bipartisan solution.”

The two provisions Mr Mnuchin singled out in his bid – what he described as “robust” liability protection for businesses, schools and hospitals, and a resource for state and local governments – were the main sticking points in the compromise effort.

The administration’s proposal also included funding for vaccine distribution and the revitalization of the Paycheck Protection Program, the small business loan program.

“It’s a very good deal,” said Republican Kevin McCarthy, Republican and minority leader. “It focuses on the things that need to be there.”

Earlier on Tuesday, Kentucky Republican Senator Mitch McConnell and majority leader had signaled openness to a deal and removed the ability to suspend liability and funding for state and local governments. He argued that removing the top priorities of both parties could pave the way for a closer deal to fund the distribution of vaccines, schools and small businesses.

“We know the new administration will ask for another package,” said McConnell on Tuesday, implicitly confirming the victory of President-elect Joseph R. Biden Jr .. “What I recommend is that we release liability, the state and pick up the local authorities and pass on the things we agree on. We know full well that we’ll be back after the first of the year. “

The idea was the first major concession in months from Mr. McConnell, who had previously referred to legal protection as the “red line” in business negotiations. But Democrats mocked it after months of insisting that any economic stimulus deal includes funds to strengthen state and local governments that have lost hundreds of billions of dollars during the pandemic and are facing devastating budget cuts. Republicans have called the provision a “blue state bailout,” despite civil servants from both parties advocating additional relief.

“He sabotaged bona fide bipartisan negotiations because his party-political efforts are not well received,” said Schumer. In her own statement, Ms Pelosi stated that “Leader McConnell’s efforts to undermine bipartisan negotiations in good faith are appalling”.

Mr Schumer said the Democrats’ proposals to fund state and local government had “broad bipartisan support,” in contrast to Mr McConnell’s liability proposal. The move would provide five years of legal protection from coronavirus-related lawsuits to businesses, schools, hospitals and nonprofits that make “reasonable efforts” to meet government standards.

But many Democrats have rejected what Senator Bernie Sanders, the independent Vermonter, derided as “a no-jail card for companies that put the lives of their workers and customers at risk.” And while Mr McConnell has warned of a wave of litigation related to the pandemic, economic data shows that the number has been relatively small to date.

The bipartisan group of lawmakers is discussing liability protection in their draft of the $ 908 billion compromise, as well as the $ 160 billion allocation currently earmarked for state and local governments.

“I hope we can reach an agreement,” Republican Senator Susan Collins of Maine told reporters when asked about McConnell’s proposal. “If we can’t, I see some logic in saying goodbye to whatever we’re okay with, as another round of PPP is largely supported by helping our schools, our health care providers, with more money for testing and distribution of vaccines. ”

The heads of state and government of both parties have agreed that some form of relief must be approved before Congress departs later this year and work towards having it included in an overall government spending package.

Both chambers are expected to approve a week-long stopgap in the coming days to prevent the government from closing on Friday and to gain additional time for the negotiators.

The coverage was contributed by Luke Broadwater, Nicholas Fandos, Jim Tankersley and Alan Rappeport.