A package containing ricin poison that was addressed to US President Donald Trump has been intercepted before it reached the White House, officials told US media.

The letter was discovered at a screening facility for White House mail earlier this week, the officials said.

They said a substance found inside the envelope was identified as ricin, a poison found naturally in castor beans.

The Trump administration is yet to comment on the reports.

The Federal Bureau of Investigation (FBI) and the Secret Service are investigating where the package came from and whether others have been sent through the US postal system.

“At this time, there is no known threat to public safety,” the FBI told CNN in a statement on Saturday.

One official told the New York Times that investigators believe the package was sent from Canada. Reports say the presence of ricin was confirmed after tests by the FBI.

The Royal Canadian Mounted Police (RCMP) said on Saturday it was working with the FBI to investigate the “suspicious letter sent to the White House”.

Ricin is produced by processing castor beans. It is a lethal substance that, if swallowed, inhaled or injected, can cause nausea, vomiting, internal bleeding and ultimately organ failure.

No known antidote exists for ricin. If a person is exposed to ricin, death can take place within 36 to 72 hours, depending on the dose received, according to the US Centers for Disease Control and Prevention (CDC).

The CDC said the poison – which has been used in terror plots – can be manufactured into a weapon in the form of a powder, mist or pellet.

The White House and other federal buildings have been the target of ricin packages in the past.

In 2014, a Mississippi man was sentenced to 25 years in prison for sending letters dusted with ricin to former President Barack Obama and other officials.

Four years later, in 2018, a former Navy veteran was charged with sending toxic letters to the Pentagon and White House.

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WASHINGTON – The discussions over another stimulus package turned testy Friday as Democrats and Republicans each blamed the other for their inability to come to an agreement just hours before a $600 weekly unemployment benefit for Americans officially ends.

In dueling press conferences, White House Chief of Staff Mark Meadows laid into Democrats for rejecting a short-term deal to continue the bolstered unemployment benefit for one week, while House Speaker Nancy Pelosi railed against Republicans and the Trump administration for attempting to take a piecemeal approach to helping Americans as COVID-19 cases continue to surge nationally. 

“What we’re seeing is politics as usual from Democrats up on Capitol Hill,” Meadows said from the White House podium. “The Democrats believe that they have all the cards on their side, and they’re willing to play those cards at the expense of those that are hurting.”

Pelosi, D-Calif., criticized Republicans for waiting months before attempting to take up another emergency package, noting the surge of coronavirus cases and high unemployment rate. 

“They do not understand the gravity of the situation,” she said of Republicans. “We don’t have shared values. That’s just the way it is.” 

$1,200 checks? Money for schools?: Breaking down what Republicans and Democrats want in the coronavirus stimulus plan

She argued a deal to extend the unemployment benefit by one week would only be meaningful if a larger bill was nearly worked out, noting the time it would take for the measure to pass and for money to reach families. Pelosi also said the Senate, which has remained divided on unemployment, likely would not have the votes to approve a continuation of the $600 weekly benefit, which bolsters state benefits that average nationally about $370 a week.

Though the back-and-forth attacks signal a deal is still far off, both Meadows and Pelosi said they plan to meet again to continue talks. 

Friday’s news conferences cap off a week filled with negotiations over another stimulus bill, talks that have all but stalled as Republicans are divided over what should be included in the measure and Democrats remain against a smaller bill to keep unemployment flowing for a short period. 

On Thursday, Meadows and Treasury Secretary Steven Mnuchin met with Pelosi and Senate Minority Leader Chuck Schumer, D-N.Y., for a lengthy meeting where both sides attempted once more to come to a deal before millions saw their unemployment benefits rolled back significantly. 

Hong Kong election delay: White House ‘condemns’ election delay in Hong Kong after Trump raised idea of postponing US vote

Meadows said Democrats were given four separate offers throughout the day but rejected all of them.

“We’re going in the wrong direction. They’re going in the wrong direction because of partisan politics. It is very disappointing,” Meadows said. “It surprises me that when we talk about compassion and caring about those that truly are in need, that a temporary solution to make sure that unemployment, enhanced unemployment continues has been rejected not once but multiple times.”

House Democrats passed their version of the next stimulus package in May, a $3 trillion measure that would have extended the $600 boost in weekly unemployment compensation until at least January. The proposal has not been taken up by the Republican-held Senate.

Democrats, including Pelosi, have balked at taking up unemployment assistance as a separate measure, arguing Republicans should come to the table for a larger deal on a host of pressing policy items, including more funds for local and state governments. House Democrats’ bill included not only an extension of unemployment but also another round of $1,200 stimulus checks and increased funds for state and local governments. 

Senate Republicans, meanwhile, have had trouble negotiating their demands as the conference remains divided on what the next stimulus package should include. Some even expressed doubt that another bill is needed. The divisions remained even after Republicans unveiled their own proposal this week that included $1,200 stimulus checks, funds for schools and small businesses, and a scaled-back unemployment benefits of $200 per week.

Many Republicans have spent weeks railing against the $600 unemployment benefit, which is paid to Americans in addition to state claims. They argue it should be changed or replaced with a back-to-work incentive in hopes of jump-starting the economy and getting shuttered businesses to rehire laid-off workers. 

Senate Majority Leader Mitch McConnell started the process on Thursday for the Senate to take up a measure that could tackle unemployment, meaning boosted unemployment could be approved by the chamber early next week, though currently the House is not expected to approve such a proposal. 

While unemployment benefits have remained a point of contention, both sides have butted heads over a number of proposals, including Republican demands that companies be shielded from coronavirus-related lawsuits and Democratic requirements that state and local governments be given more funds to offset their budgets after the pandemic. 

But both sides appeared mostly opposed to a request from the administration for $377 million to modernize the West Wing along with more than a $1 billion to keep the new FBI headquarters in Washington, D.C.

On Friday, White House Press Secretary Kayleigh McEnany defended the requests. While pointing out previous coronavirus relief bills had “plenty of other things” that were unrelated to the pandemic, McEnany insisted the FBI funding “is not a red line for us.”

“It was part of the initial bill but it is certainly not a red line priority,” she said.

Read or Share this story: https://www.usatoday.com/story/news/politics/2020/07/31/coronavirus-stimulus-trump-pelosi-cast-blame-unemployment-ends/5554365002/

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The Senate returned last Monday after weeks of speculation about what could be in the next stimulus bill, we have our first concrete signs of what Senate Leader Mitch McConnell (K-KY) is calling CARES 2.

To set the stage, remember that the Democrats in the House of Representatives passed the Heroes Act in May. It was largely seen as too expensive, costing over $3 trillion. The bill to be presented by Senator McConnell is expected to be around $1 trillion.

That’s a big gap they need to cross during a short window for negotiations. Early in the negotiation process, there was dissent between even the White House and Senate Republicans over many aspects of the bill.

For example, President Trump had been very supportive of a payroll tax cut and a second stimulus check. Senate Republicans concerned about the price tag of the bill have insisted that including both a payroll tax cut and a second stimulus check would be too high.

But in the first week of negotiations, it appears that an agreement has been reached in principle including financial assistance to schools, funding towards testing and tracing, and favoring a stimulus check over a payroll tax cut.

This, however, does not include the support of the Senate or House Democrats… yet.

The Proposal To Be Presented by 8 Senators

In a floor speech last week, Senator McConnell named eight of his fellow Senators and explained who would be presenting each component of the bill. It’s not clear if these will be separate bills or different parts of a single bill. Breaking up the stimulus package into multiple bills something that House Speaker Nancy Pelosi (D-CA) has said she opposes.

In fact, on ABC’s “This Week” on Sunday, White House Chief of Staff Mark Meadows suggested that they would try to pass unemployment insurance, a retention credit, liability shield, and additional funding for schools first and then negotiate on the rest of the bill “in the weeks to come.”

As for tomorrow, Senator Chuck Grassley (R-IA), Chairman of the Committee on Finance, will spearhead the aspects of the proposal that deal with jobs and the economy – including the next round of stimulus checks. This will also include how the next round of federal unemployment benefits will be implemented.

Senator Marco Rubio (R-FL), Chairman of the Small Business Committee, and Senator Susan Collins (R-ME) are expected to present a “sequel” to the Paycheck Protection Program (PPP). They previously proposed the Keeping American Workers Paid and Employed Act in March and that could give us a preview of what would be in a sequel to the PPP.

Senator Lamar Alexander (R-TN), Chairman of the Committee on Health, Education, Labor and Pensions, along with Senator Roy Blunt (R-MO) and Senator Richard Shelby (R-AL) would present the funding package for schools and universities.

Senator Mitt Romney (R-UT) would include a bill that would “help a future Congress evaluate bipartisan proposals for protecting and strengthening the programs that Americans count on.” This bill was recently sponsored by Senator Romney and is the S. 2733 – TRUST Act which establishes “congressional rescue committees to develop recommendations and legislation to improve critical social contract programs.”

Senator John Cornyn (R-TX) was named in the speech but Senator McConnell did not elaborate on his role in the proposals. He recently sponsored S. 4290 – A bill to provide much needed liquidity to America’s job creators but the text is not yet available.

If you want to watch along, the Senate broadcasts all its floor proceedings online. You listen to Senator McConnell discuss this package on July 23rd at the 6 hour and 38 minute mark of the archived video footage.

What could we see in each of these proposals?

These are not the official proposals. This is what I believe will be proposed tomorrow based on all the publicly available information. I will update these sections with the official proposal when they are made available.

Second $1,200 Stimulus Check

The President promised the check would be generous, economists urged it should be recurring and direct, and Senate Leader Mitch McConnell (R-KY) suggested that it should only go to those earning under $40,000 – what is expected to be offered in the bill tomorrow?

Treasury Secretary Steven Mnuchin confirmed that the stimulus check in CARES 2 will match the stimulus check in the first Cares Act.

If so, the next stimulus check will be a $1,200 one-time payment to all Americans who earn less than $75,000 including $500 for each dependent. This would be structured similar to the first one, as an advance on a refundable tax credit.

Joint filers would get $2,400 for those who earned less than $150,000. If you earn more than those amounts, your stimulus check will be reduced by 5% of your adjusted gross income above those limits.

For insight on how Democrats would respond to this proposal, we can turn to the Heroes Act that was passed by the House of Representatives in mid-May.

The Heroes Act offered a similar check to the Cares Act – a $1,200 per person payment ($2,400 for joint filers) to those who earned less than $75,000 ($150,000 for joint filers) with a 5% phase out for those earning more than the limit. It increased the amount for dependents to $1,200 and included all dependents, up to three per household.

It appears that the stimulus check in this bill is not “more generous” than the Heroes Act but is more generous than only giving one to those who earned less than $40,000.

Reduced Unemployment Benefits

The enhanced federal unemployment benefits of $600 per week that were set to expire at the end of the month are now guaranteed to expire in their current form. The Heroes Act extended the same federal unemployment benefits until January of 2021 but it appears that is too much for some Republican lawmakers.

Previously, Treasury Secretary Steven Mnuchin said that the White House was open to replacing the benefit with a smaller one. Most recently, White House economic advisor Larry Kudlow said that would be capped at 70% of the worker’s usual pay.

I expect the bill to propose a flat unemployment benefit of $100-$200 per week with the benefits lasting through the end of the year. After that, the benefit would drop to better align with the person’s actual lost income but capped at 70%. The challenge with this proposal is that it’s difficult to administer benefits capped at a percentage of previous income.

This is significantly lower than the $600 per week benefit offered in the Heroes Act, which was an extension of the unemployment benefits created in the Cares Act.

Moratorium on Evictions

The Cares Act put a moratorium on evictions that applied to buildings with a mortgage backed by the government. Landlords of those buildings were also not allowed to initiate eviction proceedings or charge additional fees or penalties for nonpayment of rent. Renters are still required to pay rent during the eviction grace period and may face repercussions for nonpayment, including eviction after the moratorium ends.

That moratorium expired on July 24th and on CNN’s “State of the Union,” Kudlow also said that moratorium would be extended in the next package.

It’s unclear how long it would last but it could extend until the end of the year. The Cares Act had a 120 day moratorium and Cares 2 could repeat that figure or extend it even longer.

Additional Aid to States

I expected the proposal will not add additional funding to state and local governments but instead offer flexibility to the funds already allocated by the Cares Act. It may allow state and local governments to use Cares Act funding to make up for those lost revenues with some restrictions – such as states cannot use the funds for pensions or retirement benefits, to replenish a “rainy day fund.”

This is what was included in a draft proposal shared by the New York Times – the proposal also said that they “expect to get some added in negotiations.”

In the Heroes Act, House Democrats included approximately an $1 trillion aid to state and local governments impacted by the coronavirus. With so many areas shut down, tax revenues have gone down sharply and this funding was meant to help deal with that shortfall.

Adding more funding was a top priority of Democrats and so this sets up a big showdown in the final bill.

5-Year Liability Shield

Senator McConnell has said he wants to see a five-year liability shield for businesses, non-profits, schools, medical providers and professionals dating back to the start of the year. This would protect them from “frivolous” lawsuits arising from the pandemic.

The law would require that a plaintiff prove that the defendant was “grossly negligent” or “willful in their misconduct.” The plaintiff would also have to show that the defendant violated the relevant local public health guidelines at the time of the incident.

This won’t necessarily have a direct financial impact for many Americans but it does create a point of contention with Democrats, who called for more OHSA regulation in the Heroes Act, and is another speed bump in getting the bill passed.

Return to Work Bonuses

Several Republican lawmakers proposed “return to work” bonuses, including Senator Rob Portman (R-OH) and Representative Kevin Brady (R-TX). They saw enhanced unemployment benefits as a disincentive to return to work and a “return to work” bonus was seen as a way to add stimulus without the moral hazard. Both proposals would pay the employee a bonus for returning to work.

Larry Kudlow mentioned “retention bonuses” and “tax credits to small business and restaurants” on CNN’s “State of the Union” but didn’t expand either. If it’s like the Cares Act, then the bill will create tax credits for business and not direct payments to returning workers.

The Cares Act created an Employee Retention Tax Credit equal to 50% of qualified wages paid to an employee until January 2021 with a limit of $10,000 in wages per employees. This means the tax credit is limited to $5,000 per employee.

If we look at the Keeping American Workers Paid and Employed Act one-page summary, we see that it’s structured similarly to the first PPP. It does help businesses retain their employees with low cost loans that could be forgiven if used for payroll but nothing directly to employees returning to work.

There was no mention of a retention bonus paid directly to employees so we will have to wait and see what is proposed.

Payroll Tax Cut

President Trump had repeatedly called for a payroll tax cut and in a recent interview with Chris Wallace on “Fox News Sunday,” he said that he may not sign a stimulus bill if it doesn’t include a payroll tax cut.

The payroll tax cut was a priority for the White House but it didn’t have a lot of support from Republicans. It will not be included in the next stimulus package.

On CNBC on last Thursday, Treasury Secretary Mnuchin said that the payroll tax cut will not be included in the base bill. President Trump followed up with a tweet that blamed Democrats for its exclusion:

This sets up a scenario in which he can sign a bill without the payroll tax and still blame it on the Democrats – a positive development.

What’s The Timeline?

There wasn’t much time when Congress returned to work last week – there is even less time now after a week of negotiations between Senate Republicans and the White House.

The Senate is set to recess on August 7th and the House of Representatives is set to recess on July 31st. House Speaker Nancy Pelosi has said she is willing to delay the recess to pass a stimulus bill but Senator McConnell has not. This leaves them with a deadline of August 7th. That’s only 10 business days to get a deal done.

If they cannot come to an agreement by then, and Senator McConnell does not extend the Senate work period, neither chamber is set to return until after Labor Day at the beginning of September.

Treasury Secretary Mnuchin seemed confident a deal could be made. On Saturday, he told reporters at the Capital that he expects that the majority of the checks would be out by August.

Additional Resources

Next Stimulus Package Showdown: The Three Key Conflicts In The Next Stimulus Bill

How Soon Could You Get A Second Stimulus Check?

Second Stimulus Check Income Limit Will Likely Be Higher Than $40,000

Next Stimulus Bill Will Likely Have These Three Major Changes

Second Stimulus Checks Should Be Recurring And Direct, Urge 156 Top Economists

The Next $600 Federal Unemployment Benefit Will Likely Be Smaller

Second Stimulus Check Update: Here’s Everything We Know Right Now

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Senate Republicans were expected to unveil their stimulus package proposal today after a whirlwind week of intense behind-the-scenes negotiations among themselves and with key White House officials, including Treasury Secretary Steve Mnuchin and Trump Chief of Staff Mark Meadows. Mnuchin emerged optimistic from a meeting this morning with Meadows and Senate Majority Leader Mitch McConnell. “We just had a very productive discussion with the leader. We do have a fundamental agreement between the White House and the Republicans in the Senate,” he told reporters.

However, as the day wore on, it became evident that the GOP still had not reached consensus. “The [Trump] administration has requested additional time to review the fine details, but we will be laying down the proposal early next week,” McConnell said. “We have an agreement in principle on the shape of the package.” Republicans will spend Friday and the weekend trying to hammer down details with the White House.

Given the fluidity of discussions, much could change between now and Monday, which is one reason why no one should bank on specific provisions or their magnitude, even if an official had previously signaled that they would be included. This includes a potential second stimulus check. Here’s why.

Three Interdependent Variables:

Republicans have coalesced around a second stimulus check in recent days, a marked departure from their stand only two months ago. On Tuesday, McConnell officially endorsed another stimulus check. “We want another round of direct payments – direct payments to help American families keep driving our national comeback,” he noted.

However, the size and income eligibility of the second stimulus payment have been more ambiguous. Originally, McConnell had signaled that the income cap may be lower, presumably as a way to keep the cost of the bill lower. Republicans have been relatively quiet about whether the size of the check would be the same as the first round of payments under the CARES Act, where single filers received $1,200. Most have now voiced general support, but appear to have deliberately avoided specific mention of an amount.

MORE FROM FORBESStimulus Package Update: Republicans Unite On Second Stimulus Check, Balk Over Payroll Tax CutBy Shahar Ziv

The one exception was Mnuchin, who told reporters earlier today that Republicans were “talking about the same provision as last time, so our proposal is the exact same proposal as last time.” Many seized on Mnuchin’s comments today as “confirmation” that $1,200 is a fait accompli; just like several other comments by Mnuchin, the $1,200 amount may not come to fruition.

Is A Payroll Tax Cut Back On The Table?

In recent days, Trump and administration officials indicated that inclusion of a payroll tax cut was a red-line issue for the next bill, with Trump telling Chris Wallace during an interview that he “would consider not signing it if we don’t have a payroll tax cut.” Mnuchin again erred in his initial prediction, mistakenly saying as late as Monday that a payroll tax cut was “in the bill.” Fierce Republican opposition led to the White House agreeing to scrap the payroll tax cut from the draft version of the proposal. “Mnuchin and Meadows were met with so much blowback to the idea at the Senate GOP lunch Tuesday that Mnuchin didn’t try to persuade anyone to reconsider,” according to The Washington Post.

However, after Republicans delayed release of the proposal today, Stephen Moore spoke to Washington Post reporter, Jeff Stein, and insisted that the payroll tax cut was back on the table. “Stephen Moore just called to say: ‘We’re not giving up on the payroll tax cut. We’re going to pound the pavement to get this back in the bill,” Stein shared on Twitter. “We’re working w/ Republicans to go to [Trump] to say, ‘We cant support a bill w/o a payroll tax cut.’ It’s premature to say this is dead.”

While one should take Moore’s comments with the same grain of salt as Mnuchin’s, the potential resurrection of a payroll tax cut could imperil the size or income cap of a second stimulus check.

How Rigid Is The Republican’s $1 Trillion Cap?

Republican’s have been under immense pressure to keep the cost of the next stimulus package down. McConnell has anchored on a cost of $1 trillion. Some in the GOP have worried that staying at a $1 trillion price tag might mean having to “pick between the two priorities, both of which have vociferous supporters and detractors,” according to The Hill.

“I think it gets complicated to try and do both, for sure, because you’ve got a limited amount of head room that you’re trying to work with here,” said Senator John Thune (R-South Dakota). “I think in the end it’s probably going to come down to where the votes are and maybe picking and choosing.” That could prove worrisome with the White House taking a few days to look over the proposal and advisors like Moore whispering in Trump’s ear, especially given Trump’s predilection towards a payroll tax cut.

Something Has To Give

If Trump forces a payroll tax cut back up for discussion – and let’s be clear, this is a big if given strong Republican and Democratic opposition – then something has to give. Here are a few scenarios that could play out:

• If the Republican priority is to keep bill at $1 trillion: An analysis by the Committee for a Responsible Federal Budget estimated that a three month payroll tax holiday would cost $300 billion. This would potentially occupy a substantial amount of the $1 trillion budget, leaving less room for other items like second stimulus checks. If Republicans want to keep the bill under that amount and are forced, perhaps by Trump, to include a payroll tax cut, they may need to reduce the size of a second stimulus check to offset the cost of the payroll tax cut. This could mean reducing the amount of the check from $1,200 or perhaps imposing a stricter income cap on eligibility.
• If Republicans are content going above $1 trillion: In this case, the proposal may be able to accommodate both a payroll tax cut and a $1,200 stimulus check. However, the critical question will be: How high Republicans are willing to go? Given vociferous opposition to overspending by Tea Party members, there is still a chance that they may need to slightly reduce the cost of a second stimulus check. “I think conservatives are unhappy with all the money we’re spending up here on the virus. They would rather the economy open,” said Senator Rand Paul (R-Kentucky).
• If Republicans want to use a loophole: McConnell is the master of procedural tactics and could use a budgetary loophole to accommodate both a payroll tax cut and a $1,200 second stimulus check. As reported a few days ago in The Washington Post, “the administration is considering structuring the payroll tax cut in the legislation as a deferral rather than an outright cut, which would keep down the technical cost of the overall bill.” This deferral would require Americans to pay back the tax cut savings at a later date. While this maneuver could be used to keep the official cost of the bill down, fiscal conservatives may cry foul, knowing that there is a high likelihood that Congress could decide to waive the repayment in the future, which would simply kick the debt can down the road.

The Upshot

A payroll tax cut may creep back into the conversation given the delay in unveiling the Republican stimulus proposal, which could jeopardize the size of a second stimulus check. “I think both the direct payments and the. . . elimination of payroll taxes would be a pretty big part of the package, either one would be. Both of them would be, my guess is, challenging to do and do much else under [a] trillion dollars,” said Senator Roy Blunt (R-Missouri).

Yes, Mnuchin indicated that the parameters of a second stimulus check would be the same as the last round, which implies a $1,200 payment; however, you shouldn’t take his word as gospel. After all, ironically, earlier this week he was the one who said a payroll tax cut would be in the proposal.

Further Related Reading:

Stimulus Package Update: Republicans Unite On Second Stimulus Check, Balk Over Payroll Tax Cut

Is Trump Using Next Stimulus Package To Undermine Funding Of Social Security And Medicare?

Trump Threatens Stimulus Package; Insists On Including Payroll Tax Cut

Trump’s Payroll Tax Cut Is An Ineffective Way To Help The Economy

Second Stimulus Check And $600 Benefit Extension May Be Delayed; Here’s Why That Might Be A Good Thing

Expect $600 Federal Unemployment Checks Slashed To $400 Or Less

Second Stimulus Check Income Eligibility May Be Capped At $40,000

Second Stimulus Check Odds Improved By White House Officials’ Comments

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Senate Republicans are expected to introduce their long-awaited, proposed stimulus package Thursday—and here’s what’s likely inside.

Here’s what you need to know.

Second stimulus checks

How much is the second stimulus check? According to the Associated Press, Senate Majority Leader Mitch McConnell (R-KY) wants second stimulus checks of $1,200 included in this proposed stimulus package. However, McConnell and White House negotiators, Treasury Secretary Steven Mnuchin and Chief of Staff Mark Meadows, have not confirmed the amount of the second stimulus checks or the criteria to receive a second stimulus check.

The first stimulus check under the Cares Act was up to $1,200 for each individual, $2,400 for married/joint filers and up to $500 for dependents. If you earned less than $75,000 (individuals) or $150,000 (married/joint filers), you could receive $1,200 for the first stimulus check. The first stimulus check phased out above those income limits until $99,000 of adjusted gross income for individuals and $198,000 for married/joint filers. Since the Cares Act, there have been countless proposals about second stimulus checks, including keeping the same $1,200 one-time stimulus check to $2,000 a month second stimulus checks. Previously, McConnell suggested that second stimulus checks may only be available to Americans who earn up to $40,000 a year. However, that $40,000 threshold likely won’t be the in the proposed stimulus.

Unemployment benefits / return-to-work-bonus

The Associated Press reports that Senate Republicans are leaning toward a proposal of $200 per week for unemployment benefits, rather than the $600 a week that Congress authorized under the Cares Act. Why? Many Republicans have believed that the $600 a week unemployment benefit creates a disincentive for recipients to return to work. They also argued that some recipients can earn more than unemployment benefits than from employment. So, Republicans settled on extending unemployment benefits without creating a disincentive to return to work. Unemployment benefits would be extended through December 31, 2020 in this stimulus proposal. Without congressional intervention, unemployment benefits expire this weekend. Congress may use a stop-gap measure while they finalize terms for unemployment benefits after July. Will there also be a return-to-work bonus? Senate Republicans and the White House had rallied around Sen. Rob Portman (R-OH), who proposed a $450 a week cash return-to-work bonus.

Payroll tax cut

President Donald Trump said he would consider vetoing the stimulus package if it does not include a payroll tax cut, which he believes is a pro-growth strategy to stimulate the economy. A payroll tax cut would reduce or eliminate Medicare and Social Security tax. Both employees and employers can benefit, since employers contribute as well. The payroll tax cut may be structured as a payroll tax deferral (rather than an upfront tax cut). A payroll tax deferral could mean the payroll tax could be owed at a later date, which would provide upfront savings. It’s unclear if legislators eventually would forgive the payroll tax before it’s due, or if Americans would be required to pay it in the future. Senate Republicans appear to be leaning toward direct payments to Americans rather than a payroll tax cut. However, Republicans could propose other financial incentives or tax breaks to businesses in lieu of a payroll tax cut.

State and local aid

Republicans plan to propose $105 billion to open schools and $15 billion for child care centers, according to the Associated Press. This includes $70 billion for K-12 schools to reopen, $30 billion for colleges and universities and $5 billion for governors to spend at their discretion. The funding will be available to schools that open for both in-person and remote instruction. In contrast, Democrats are targeting approximately $1 trillion for state and local aid, and $430 billion to open schools. Both parties in Congress understand that state and local governments have been adversely impacted by the Covid-19 pandemic. However, Senate Republicans are not proposing any new state or local aid. Why? They believe that authorization in prior stimuli is sufficient. Without federal support, however, many Democrats argue that some states and localities will face dire financial circumstances, budget cuts and potential bankruptcy.

Liability protections for businesses

McConnell made liability protection his top issue for the new stimulus. Businesses, hospitals and schools would receive five-years of liability protection, retroactive to 2019. Liability protection is expected to be included in the Republican stimulus proposal.

Student loan forgiveness

Don’t expect student loan forgiveness in the new stimulus. House Democrats passed a weakened student loan forgiveness plan in the Heroes Act that would provide $10,000 of student loan forgiveness only for borrowers who are “struggling financially.” While the Heroes Act provides for an extension of these benefits, Senate Republicans (or Senate Democrats) have not made student loans a top issue of the next stimulus.

Payroll Protection Program

The new stimulus legislation is expected to extend the Paycheck Protection Program (PPP), which is scheduled to expire on August 8. Republicans propose to use the unspent $134 billion that was previously authorized to make PPP loans.

Coronavirus testing

Senate Republicans plan to propose $25 billion for Coronavirus testing and contract tracing. According to the Associated Press, the $25 billion is equal to the $9 billion already authorized in a prior stimulus plus $16 billion of new spending.

Final Thoughts

McConnell says he will introduce the stimulus package in multiple bills, rather than a single legislative proposal. The total amount could increase as Democrats demand higher funding for their legislative priorities, such as extending unemployment benefits and increasing aid to states and localities, among others. What is the timeline for the new stimulus? Congress has until August 7 to reach a deal on the new stimulus when members leave for summer recess until September. House Democrats proposed $3 trillion for the Heroes Act (their proposed stimulus bill which hasn’t passed the Senate) and is more than double McConnell’s proposed legislation. Senate Republicans hold 53 seats in the U.S. Senate, and will need Democrats to secure a bipartisan stimulus package. If Congress does not finalize legislation in July or August, then the new stimulus could be delayed until after Labor Day. However, if Congress finalizes the new stimulus before August 7, it’s possible that second stimulus checks could be sent as early as late August.

Related Resources

Second stimulus checks may be less than $1,200

Second stimulus checks: your questions answered

Don’t expect a second stimulus check

15 secrets to refinance student loans

5 student loan changes for 2020

What Trump and Biden think about your student loans

Trump wants at least $2 trillion for next stimulus

Don’t expect student loan forgiveness in next stimulus bill

Navient settles lawsuit — what it means for your student loans

Student loan refinancing rates are incredibly cheap

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Republican and White House leaders are struggling to gain internal consensus on an initial stimulus package proposal. During a lunch meeting on Tuesday, Senate Republicans repeatedly clashed with each other as well as with Treasury Secretary Steve Mnuchin and Trump Chief of Staff Mark Meadows over the bill. One lawmaker recounted the lunch as “messy,” and Senator Roy Blunt (R-Missouri) noted that “about 15 different members wanted to make a point, and they made them.”

Republicans balked at various aspects of a potential relief bill including the overall cost, the inclusion of a payroll tax cut, and the exclusion of funding for coronavirus testing. Senators were, however, coalescing around other provisions, including sending a second stimulus check to Americans, although details on the size and scope were still hazy. Senate Majority Leader Mitch McConnell, who is spearheading the legislation, told a news conference on Tuesday, “I’m going to introduce a bill in the next few days that is a starting place, that enjoys fairly significant support among Republican senators – probably not everyone.”

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Republicans Now Support A Second Stimulus Check

Republican support for a second stimulus check is a marked departure from their opposition several months ago. In May, Republicans were unified and vocal in arguing against a second payment. However, a worsening economic outlook, coupled with a dramatic rise in coronavirus outbreaks, is the likely impetus of the Republican about-face.

On Tuesday, McConnell officially endorsed another stimulus check for the first time. “We want another round of direct payments – direct payments to help American families keep driving our national comeback,” he said during a press briefing on the Senate floor. There is still some lingering reticence to include another stimulus check. “There was some support and some opposition, both, to the direct payments,” said Senator John Cornyn (R-Texas); however, McConnell’s strong push should be able to corral a majority.

While it is now more likely than not that a second stimulus will be included in the Republican relief proposal, many details still need to be worked out. For example, McConnell did not offer particulars on whether a second payment would be as large as the first round of checks or if the eligibility criteria would differ. Individual filers earning less than $75,000 were eligible to receive a full $1,200 stimulus check when the CARES Act was passed, but McConnell has indicated some interest in reducing the income eligibility for a second stimulus, presumably to keep the overall cost of the new relief bill down.

Leaving some of the details ambiguous will also provide McConnell with additional levers to pull during upcoming negotiations with Democrats.

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Republicans Balk At Trump Payroll Tax Cut Demand

Aligning on a second stimulus check may have been the easy part for Republicans. Discussions over the inclusion of a payroll tax cut were much more contentious. In recent days, Trump and administration officials indicated that a payroll tax cut was a red-line issue for the next bill, with Trump telling Chris Wallace during an interview that he “would consider not signing it if we don’t have a payroll tax cut.”

Republicans Resist Payroll Tax Cut

Mnuchin had initially indicated that a payroll tax cut would be included, going so far as to say it was “in the bill on Monday”. However, Senate Republicans steadfastly refused to rally around it, indicating during Tuesday’s briefing that they were not onboard with the idea. “Mnuchin and Meadows were met with so much blowback to the idea at the Senate GOP lunch Tuesday that Mnuchin didn’t try to persuade anyone to reconsider,” according to The Washington Post.

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High-ranking Senate Republicans voiced their concerns publicly. “I’m not a fan of that,” said John Thune (R-South Dakota), the second-ranking senator, speaking of a payroll tax cut. “If it’s a choice between doing checks and payroll tax cut, I think it’s pretty clear the checks actually have a more direct benefit to the economy.” Senate Finance Committee Chairman Charles E. Grassley (R-Iowa) also spoke against the provision, arguing that the extra money wouldn’t reach voters quickly.

A small group of Senate Republicans does support including a payroll tax cut, mainly because of the perceived ease of implementation. “This doesn’t require any action, it requires less, it requires doing less of something not doing more of something,” said Senator Kevin Cramer (R-North Dakota).

White House Walks Back Red-Line

The White House appeared to walk back its insistence on the payroll tax cut after the onslaught of resistance from Senators. “I don’t know that in any negotiation that there are red lines but there are certainly high priorities and it will remain a very high priority for the president,” Meadows said. Mnuchin added that they were still “in discussions” about the payroll tax, although he indicated to reporters that the White House had not dropped the issue.

Notably, McConnell did not mention a payroll tax cut when describing the stimulus package to reporters on Tuesday, indicating the fluidity of the situation. “There are some differences of opinion on the question of the payroll tax cut and whether that’s the best way to go,” he remarked during a press briefing. “And so, we’re still in discussion with the administration on that.” 

The Upshot

Republicans will need to reach internal consensus and draft a proposal before negotiations with Democrats can begin in earnest. The intra-party infighting will mean a delay not only in releasing an initial version of the bill, but also in engaging in discussions with Democrats, a process that will be equally, if not more, complex. Senator Chuck Grassley (R-Iowa) summed it up best, remarking the “only thing I can say is this whole process is the art of compromise.” Let’s hope Congress can compromise quickly.

Further Related Reading:

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