Senate negotiators near agreement on keeping rebates in coronavirus stimulus package

In a major victory for President Trump, Senate negotiators are nearing a deal to provide $1,000 cash rebates in the phase three stimulus deal and match the cost of the program with a major expansion of unemployment benefits. 

The emerging deal being hammered out by Senate negotiators would provide one round of $1,000 checks to eligible adults at a cost of approximately $250 billion and match that with a similarly costly expansion of unemployment benefits — in the ballpark of $250 billion, according to two sources familiar with the talks. 

As a result, the entire cost of the stimulus package is expected to swell well above the $1 trillion proposed by Trump, possibly to more than $1.2 trillion. The projected cost of the package is not yet certain, as negotiators are waiting for a cost estimate from the Congressional Budget Office (CBO), said a person familiar with the talks.

The total cost of expanding unemployment benefits remains uncertain until the CBO issues a budgetary projection, negotiators said.

The partisan disagreement over whether to provide direct economic assistance in the form of rebate checks or unemployment insurance was a major sticking point heading into the talks.

The progress both sides made on the issue signals that a deal is possible this weekend, even though negotiators failed to meet Senate Majority Leader Mitch McConnell’s (R-Ky.) Friday midnight deadline to get a deal in “principle.” 

Treasury Secretary Steven Mnuchin initially proposed providing two rebate checks of $1,000 to eligible individuals at a cost of roughly $500 billion to boost the economy in the midst of the coronavirus crisis; however, senate Republicans shaved down that amount, instead proposing a single payment of $1,200 to eligible adults and $500 for claimed dependents.

But Senate Democrats objected and said the relief to individuals would be best distributed through the unemployment benefits system.

“One-time payments are not what people need. What people need is a paycheck. They need ongoing income until this is done. That’s what they need,” Sen. Debbie Stabenow (Mich.), a member of the Democratic leadership team, told reporters Friday morning.

By 10:30 p.m. Friday, negotiators were sounding more optimistic about the possibility of a deal. 

“I think we made good progress,” Sen. Ron Wyden (Ore.), the senior Democrat on the Finance Committee, said after nearly 11 hours of negotiations with Republicans.

But Wyden warned that negotiators need to vet the emerging deal with members of their respective conferences.

“Both sides now have issues that they have to go back and check with [their colleagues],” Wyden said.

Eric Ueland, the White House legislative affairs director, said negotiators “are much closer at the end of today than we were when we started this morning.” 

Ueland said negotiators “made tremendous progress today on unemployment insurance.” 

He also said that the Democratic proposal to significantly ramp up unemployment insurance benefits requires “some technical work that needs to be done overnight” and added that the CBO “needs to give us some answers on dollars and cents.”

As the disagreement over direct rebate checks and expanded unemployment benefits nears resolution, another major sticking point has emerged on the question of providing financial assistance to the states.

A Republican source familiar with the talks said Democrats are demanding a “very high” number for financial assistance to the states, a reflection of Senate Minority Leader Charles Schumer’s (D-N.Y.) desire to provide assistance to his home state, where more than 7,000 people have been diagnosed with the coronavirus.

The Democratic governors of New York, New Jersey, Connecticut and Pennsylvania wrote a letter to Trump, Schumer, McConnell and House Speaker Nancy Pelosi (D-Calif.) Friday requesting direct cash assistance of $100 billion “for our region alone.”

They said the money would be needed to “account for the devastating impact of COVID-19 on our four state budgets.”

“We do not have the luxury of waiting for federal reimbursement — we need a cash infusion now,” they wrote.

A Republican source said the Democratic request for state aid was well in excess of the $100 billion requested by those four states and had created an impasse in the talks. 

The Democratic request for a massive infusion of financial aid to states caught GOP lawmakers somewhat by surprise; they had fully anticipated giving ground to Democrats on boosting unemployment benefits, which was a key piece of a $750 billion Democratic stimulus plan Schumer unveiled earlier in the week.

Schumer’s $750 billion stimulus proposal, unveiled to the press on Monday and Tuesday, made no mention of a $100 billion-plus injection of federal aid to the states.

Instead, it was broken down into a $400 billion emergency appropriation to fund programs designed to support a pandemic response and $350 billion to bolster the social safety net designed to help working class Americans.

The initial Democratic proposal would have allocated the $400 billion in pandemic response funds to paying for hospital beds, ventilators, masks and other protective equipment; child care services; and low-interest loans and loan forgiveness. 

Democrats proposed spending an additional $350 billion on expanding unemployment insurance, increasing federal Medicaid contributions to states, increasing contributions to the Supplemental Nutrition Assistance Program and canceling monthly student debt payments.

Jordain Carney contributed to this report.