White House, House Democrats reach deal on coronavirus economic relief package

The White House and House Democrats reached agreement Friday on a coronavirus relief package to spend tens of billions of dollars on sick leave, unemployment insurance, food stamps and other measures to address the unfolding crisis.

House Speaker Nancy Pelosi, D-Calif., announced the agreement in a letter to fellow House Democrats. “We are proud to have reached an agreement with the Administration to resolve outstanding challenges, and now will soon pass the Families First Coronavirus Response Act.”

A vote to pass the legislation was expected later Friday in the House, and in the Senate next week.

The development came after a roller-coaster day that started with a deal seeming imminent, before it looked like it was unraveling over successive hours. House Republicans voiced concerns and President Donald Trump himself voiced opposition, complaining at an afternoon news conference that Democrats were “not doing what’s right for the country.”

At one point Pelosi announced that Democrats would be moving forward with a vote, with or without Republicans on board.

But behind the scenes, Pelosi and Treasury Secretary Steven Mnuchin continued negotiations that began earlier this week, By early Friday evening they had spoken by phone 13 times that day alone.

Pelosi praised the legislation in a televised address Friday afternoon. “Put families first—today, we are passing a bill that does just that,” she said, laying out provisions of the legislation such as free coronavirus testing, paid sick and family leave, and food assistance for poor families.

“Our nation, our great nation, has faced crises before,” she said. “And every time, thanks to the courage and optimism, patriotism and perseverance of the American people, we have prevailed. Now, working together, we will once again prevail, and we will come out stronger than before.”

House Republicans had appeared uneasy about some provisions in the package, which would expand federal spending on Medicaid and provide for federal reimbursement for paid sick leave as well as family and medical leave.

Compounding the GOP concern was Trump’s insistence on instituting a broad payroll tax cut to stimulate the economy. He said in a morning tweet that such a cut, increasing paychecks by 7.65 percent for most wage earners, was essential to any recovery package. “Only that will make a big difference!” he wrote.

Lawmakers in both parties have reacted coolly to the proposal, expressing qualms about its cost and the fact that it is not targeted to those directly affected by the pandemic. The legislation negotiated between Pelosi and Mnuchin did not include a payroll tax cut, and that omission emerged as one of the obstacles to reaching a deal, according to the senior administration official.

Last week, Congress passed an $8.3 billion emergency spending plan to address public health needs arising from the crisis. But as the crisis mushroomed through the economy, with schools closing, planes and trains half-empty and major sports and entertainment events canceled, lawmakers increasingly saw the need for a major economic relief package—probably a series of them. Thursday’s massive stock market sell-off rattled lawmakers, although stocks were back up on Friday.

There are now over 1,200 confirmed coronavirus cases in the United States and more than three dozen deaths, numbers that are expected to exponentially rise. Trump declared a national emergency Friday to free up funds, and lawmakers themselves have been announcing plans in growing numbers to shut down their offices and self-quarantine after brushes with infected individuals. For the second day in a row on Friday, McCarthy convened a conference call with House Republicans rather than meeting with them in person, a step he said helped with health concerns.

The emerging agreement builds upon a bill House Democrats released late Wednesday that included a number of provisions Republicans opposed, setting off hours of frenzied negotiations on Capitol Hill to reach bipartisan consensus.

A final hang-up was over a provision for paid family and medical leave, with Republicans pushing to structure it in a way so it could be implemented quickly and avoid undue burdens on employers.

As originally introduced, the House bill included a $2 billion boost to state unemployment insurance programs, more than $1 billion in nutritional aid, a new paid-leave benefit for employees affected by the outbreak and an increase in federal Medicaid spending, as well as a guarantee of free coronavirus testing.

Republicans viewed the initial legislation as overly broad, and through hours of phone calls and staff-level negotiations Thursday, Pelosi and Mnuchin agreed to narrow the legislation to focus more squarely on impacts from the coronavirus and those hurt by it.

The initial proposals underwent significant changes over the hours of talks, and toward the end negotiators were haggling over a less ambitious proposal for family and medical leave from Rep. Robert Scott, D-Va., that would expand the number of workers who can take up to 12 weeks of job-protected leave under the Family and Medical Leave Act while drawing down wage replacement. Employees would get two-thirds of their salary replaced up to $4,000 a month, and employees would be reimbursed by the federal government. Separately, employees would also be able to take 14 days of paid sick leave, with the government reimbursing employers for part of the cost.

Another controversial provision in the original bill would have increased the percentage of Medicaid spending borne by the federal government by eight percentage points through Sept. 30, 2021. That would be a welcome relief to states, which could see an influx of Medicaid enrollees in a time of economic crisis. But the price tag for the federal government could have been vast—stretching easily into the tens of billions of dollars.