Senate Leaves Congress Until September Without Reaching A Stimulus Deal

Without reaching a deal on a fifth COVID-19 stimulus package, the Senate left Congress today for August recess until September 8th. For weeks, since senators first unveiled their proposal, top Democrats and Republicans have been arguing about the size of the stimulus, with Democrats envisioning a budget of over $3 trillion while Republicans wanted $1 trillion. Democrats have offered to cut their proposed budget by $1 trillion, which Republicans have refused.

The primary negotiators — Speaker of the House Nancy Pelosi, Senate Minority Leader Chuck Schumer, Treasury Secretary Steven Mnuchin, and White House Chief of Staff Mark Meadows — haven't met in person to continue talks since last Friday.

If talks resume and a deal is reached before Congress officially reconvenes, Senators would have 24 hours notice to return. The negotiations are stalling as millions of Americans are at risk of not being able to pay rent and facing evictions. The $600 federal unemployment boost expired in late July.

President Trump signed a series of executive orders this past Saturday in lieu of a stimulus bill; it included a payroll tax deferral and, originally, a $400/week federal unemployment boost. But states would be on the hook to fund $100 of that $400 boost, and many currently don't have the money to do so — a part of stimulus package negotiations revolved around how much more funding to give to states and local government budgets. On Tuesday, the White House reduced their planned unemployment boost to $300 a week. There are also questions around whether the president has the legal power to enact these executive orders. Because the executive order doesn't apportion new funding for unemployment, instead redirecting funds from elsewhere, the money for this temporary boost is expected to dry up within 5 weeks or so.

The House passed their more generous version of the fifth stimulus bill back in May.

At long last, after months of frustration as we wondered whether more coronavirus relief was coming, Senate Republicans revealed yesterday a $1 trillion dollar stimulus proposal called the HEALS Act — standing for “Health, Economic Assistance, Liability Protection and Schools.” Here’s what’s included in it, and what Democrats are likely to push back on.

Yes. Republicans are proposing that Americans receive a second direct payment, and it’s going to be another $1,200. The income thresholds are staying the same, too; individuals with an adjusted gross income of $75,000 or less based on their most recent tax return will receive the full $1,200, while those with an income of over $99,000 will not receive anything. For joint filers, the income limit for a full payment is $150,000 and is phased out at $198,000. Previously, it was reported that Senate Majority Leader Mitch McConnell was considering a much lower income limit of $40,000, and possibly even a lower payment amount, but thankfully, that’s not the plan.

The next stimulus payment will also address an oversight in the first one. In the previous CARES Act, people were supposed to get an extra $500 of stimulus money for each dependent they claimed on their 2019 taxes. But a loophole meant that dependents 17 years old and up weren’t eligible for the $500, leaving many college students excluded. The HEALS Act removes all age limits for dependents.

To ensure that the IRS doesn't send another $1 billion to deceased Americans, the bill also specifies that people who died before January 1st, 2020 can’t receive the payments, as well as “any individual in prison at the time Treasury processes the rebate.” It is not yet known when people will start receiving their next stimulus checks, but some estimates say they could start arriving in late August — only if Congress passes legislation as quickly as possible, though.

Federal unemployment insurance was expanded in the CARES Act to give people whose jobs have been affected by COVID-19 an extra $600 a week on top of their regular state unemployment benefits. This was called the Federal Pandemic Unemployment Compensation (FPUC), and technically this past weekend marked the last week of benefits before it expires. 

Many economic experts have talked about the widespread hardship that the end of FPUC could bring, especially as eviction moratoriums have expired and many Americans face homelessness. The sudden income cliff may result in millions of people suddenly being unable to pay rent and bills.

Thankfully, the HEALS Act doesn’t completely do away with supplemental federal unemployment altogether — but it’s a lot less than what it was. If this bill passes in its current form, Americans on unemployment will receive a maximum of 70% of lost wages starting October. That’s including state unemployment, and generally, state unemployment replaces less than 50% of lost wages. So if you usually made $500 a week and your state unemployment gives you $200, you’d get an extra $150 in federal unemployment. The federal unemployment benefits also can’t exceed $500. Until October, when this scheme would kick in, Americans would receive $200 a week as part of federal unemployment, just a third of what they were receiving up until last week.

Republicans have proposed $16 billion in funding for COVID-19 testing, as well as $26 billion to help develop a vaccine. It also provides $105 billion for schools and extends the Paycheck Protection Program (PPP), which initially set aside $669 billion in forgivable loans for small businesses. But the GOP has said that the next round of PPP loans would be limited to businesses who have lost at least 50% of revenue and have 300 employees or fewer, after data revealed that many not-so-small businesses had received the loan. There’s also a measure that allows people to deduct 100% of business meal expenses now, instead of just 50%. Speaker of the House Nancy Pelosi has criticized its inclusion, pointing out that meanwhile, there had been nothing provided in terms of “food stamps or nutrition assistance.”

A key part of the HEALS Act is its broad protection of corporate liability. It’s something McConnell has been especially insistent on — it’s even in the bill’s name — and over 20 conservative groups have been lobbying for it over the past several months. The provision shields companies from lawsuits brought by workers who claim that their employer did not adequately protect them from the coronavirus. According to the Associated Press, businesses would only be found liable in cases of “gross negligence or intentional misconduct,” which it notes is a high legal standard. It means that an employer wouldn’t be responsible for failing to “take reasonable precautions,” though what that exactly entails is hard to determine as of now. Such lawsuits have already become commonplace — as of early May, there were almost 800 COVID-19-related lawsuits filed. Amazon is currently being sued by three employees in New York who claim the company did not implement adequate safety measures.

One of the most notorious examples of COVID-19 spread at work has been in meat processing facilities. CDC data says that about 9% of meat and poultry plant workers in 14 states have gotten COVID-19 so far. As of late June, according to the Food & Environment Reporting Network, over 8,000 Tyson employees were diagnosed with the virus. The families of three Iowa Tyson employees who died are currently suing the company, alleging that Tyson knew COVID-19 was spreading in its facilities and did not inform employees, in some cases even allowing sick or exposed employees to continue working. In the past few months, some of the biggest meat processing companies have lobbied politicians to pass federal liability protection, making large donations to lawmakers and interest groups.

Many states, including Iowa, have already passed some form of COVID-19 immunity for businesses. In New York, Governor Andrew Cuomo inserted a sweeping provision protecting nursing home operators, including executives and board members, into his annual budget that passed in April. According to the New York Times, 40% of COVID-19 deaths in the U.S. have been linked to nursing homes. New York’s law is particularly relevant now because, as reported by journalist and former Bernie Sanders campaign advisor David Sirota, the language in the HEALS Act is lifted almost word-for-word from the New York law. In May, Republicans said they would refuse to pass any stimulus bill without liability protection. The conservative groups pushing for the law wrote a letter to McConnell and Pelosi back in April, condemning trial lawyers taking up COVID-19 lawsuits. “Their greed is hurting America in this time of crisis,” it read. Proponents of corporate liability protection have claimed that holding businesses responsible for spreading COVID-19 kills jobs and hurts the economy.

The Democrats have already begun negotiations on the HEALS Act, but The Hill reports that Senate Democratic Leader Chuck Schumer called the plan “pathetic.” Schumer and Pelosi are reportedly disappointed by the lack of state funding, rent assistance and eviction protections, as well as more targeted aid for low-income Americans. Their volley will probably be more expensive than $1 trillion. The Heroes Act, which was introduced by House Democrats in April, was budgeted at $3 trillion. The next stimulus bill has to pass by the end of next week, or Congress will go into August recess.