Congress strikes historic $900bn Covid relief deal for stimulus checks, unemployment, and small businesses

Congressional leaders finally come together on deal that has eluded them for nine months

After nearly nine months of mostly stalled negotiations and bickering, Democratic and Republican congressional leaders have finally reached agreement on another sweeping Covid relief package.

The deal, worth an initial estimate of around $900bn, is the eleventh-hour culmination of talks that abruptly intensified last week between Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer on one side and Senate Majority Leader Mitch McConnell, House Minority Leader Kevin McCarthy, and Donald Trump’s Treasury Secretary, Steven Mnuchin, on the other.

“For the information of all senators and more importantly for the American people, we can finally report what our nation has needed to hear for a very long time: More help is on the way,” Mr McConnell announced on the Senate floor on Sunday.

Lawmakers have “finalised an agreement” on a package that is the second-largest bailout in US history, behind the $2.2trn CARES Act from March, the majority leader said shortly before 6pm on the East Coast, although negotiators had not yet released the full text of the bill.

The bill includes another round of direct payments to most Americans, this time worth only $600 instead of the $1,200 taxpayers received in the spring.

Mr Trump, congressional Democrats (led in the Senate by Bernie Sanders) and even some Republicans (headlined by Missouri Senator Josh Hawley) have been pushing hard for a renewal of the full amount.

As lawmakers negotiated late into the night on Saturday to work past differences on when to draw down federal lending programmes for businesses reeling from the pandemic, Mr Trump tweeted that he wanted Congress to give Americans “more money in direct payments.”

While $1,200 stimulus checks have not been included in the package, it is expected to pass with bipartisan support when it receives a vote in each chamber this week.

“The great news is that Congress is not going to be the Grinch,” Democratic Senator Mark Warner of Virginia said on ABC’s “This Week” on Sunday, as it became clear the parties were hurtling towards a deal.

“We’re going to get this package done,” said Mr Warner, one of several moderates in the chamber who have been intimately involved in striking the bipartisan Covid accord.

Another boon for struggling Americans is the bill’s reauthorisation of a crucial Covid-era programme supplementing recently laid-off workers’ state unemployment cheques. Democrats had been pushing to keep that federal unemployment subsidy at $600 per week, but at Republican negotiators held the line to reduce it to $300. The unemployment programme was set to expire on 26 December, the ultimate deadline for getting another Covid deal across the finish line.

The bill also unlocks hundreds of billions of dollars in funding for key small- and medium-sized business lending programmes, including Treasury’s Paycheck Protection Programme (PPP) that has been credited with keeping millions of Americans employed at small businesses throughout the pandemic.

Republican Senator Pat Toomey of Pennsylvania had been holding up the Covid package over concerns that the CARES Act from March gave the Federal Reserve too much freedom to keep lending money to businesses even when the pandemic tails off.

He and Democratic negotiators agreed to compromise language on Satureday placing limits on the Fed’s lending capacity.

“The good outweighs the bad, and it is my intention to vote for [the package],” Mr Toomey told Politico. 

Billions more in funding will go towards the federal government’s nationwide vaccine distribution programme that launched earlier this week.

The Covid package is expected to ride alongside the long-awaited, $1.4trn omnibus government appropriations package.

The House is expected to vote first on Monday, Democratic Majority Leader Steny Hoyer told members of his caucus on Sunday, with the Senate following either later Monday or the following day.

Lawmakers will have to pass a third stopgap appropriations measure by midnight on Sunday to keep the government funded and avoid a shutdown.

“At long last, we have the bipartisan breakthrough the country has needed. Now we need to promptly finalise text, avoid any last-minute obstacles and cooperate to move this legislation through both chambers,” Mr McConnell said on Sunday, urging maverick lawmakers not to erect any unforeseen legislative obstacles.

An imperfect deal

Not included in the Covid package agreed to on Sunday are any provisions addressing Democrats’ and Republicans’ top respective priorities.

Since April, Democrats have called for an injection of hundreds of billions of dollars for states and localities to help those governments on the frontlines of the pandemic response.

Mr McConnell has been equally insistent on including a legal shield for businesses, health care providers, and school systems against liability lawsuits related to Covid exposure.

Leaders appear to have kicked the can down the road on both issues to break the months-long impasse and ensure they can get home to their families for Christmas.

During discussions last week, Democrats had been trying to funnel money to states and localities through the Federal Emergency Management Agency (FEMA) that provides resources to targeted parts of the country hit by national crises. It was not immediately clear whether they managed to work such language into the final package agreed to on Sunday.

The roughly $900bn Covid bill that emerged is a far cry from the $2.2trn bill House Democrats passed on a party-line vote in October that set the baseline for their negotiations with Republicans.

The Democratic bill included massive state and local cash infusions as well as provisions loosening marijuana laws, investing in universal internet broadband infrastructure, and renewing the full $1,200 stimulus cheque programme, among several others.

Democrats will be eager to negotiate another deal when Joe Biden takes office, but Mr McConnell, who adopted a wait-and-see approach to pandemic legislation throughout the summer months of 2020, could once again frustrate the pace of negotiations.

“Democrats would have liked to go considerably further,” Mr Schumer admitted as early as Wednesday, as it became apparent Republicans would not budge for higher dollar amounts.

“But this won't be the last time Congress speaks on Covid relief. Right now, we must address this emergency over the short term,” he said.

The progressive question

A final product less than half the size of Democrats’ final pre-election offer will be a tough sell to progressives who grumbled that even $2.2trn was not enough.

They have taken to calling the $1,200 stimulus cheques “survival cheques”. Their spirit animal, Mr Sanders, has been threatening to shut down the government if that programme was not re-upped in full.

As the details of the Covid bill were emerging, the Vermont Independent did not immediately say how he would approach the Covid package vis-à-vis an impending government funding lapse at midnight. He and other hardliners have been reluctant to actually force a government shutdown in the middle of a pandemic where millions of Americans are relying on federal programmes for their survival.

While the emerging Covid package has some encouraging elements, Mr Sanders has said previously, he believes it falls far short of what Americans need to make it through the coming months.

The menu of Covid provisions is expected to be bolted onto the massive $1.4trn government appropriations package to fund federal operations through fiscal year 2021.

Government funding zeros out on Sunday at midnight, and due to the convoluted nature of Senate voting procedures, Mr Sanders could single-handedly delay a vote until after that deadline as leverage for the full $1,200 direct payments instead of the pared-down $600-per-cheque proposal.

Mr Schumer indicated last week that Democrats would have other chances in the future to negotiate a Covid deal.

“Make no mistake, we will work in the future to provide additional relief, as the country requires,” he said. “But we need to provide a platform to build on. We need to address this emergency right now. At the end of one of the most difficult years in recent American history, a vaccine has given us all a reason for hope. Let's give the country another reason. The finish line is in sight.”