Senior GOP senators object to direct payments at caucus meeting

President Trump’s signature proposal to send $1,200 direct payments to the public received pointed pushback from senior Senate Republicans at a meeting Thursday where GOP negotiators unveiled their version of a $1 trillion stimulus plan.

The most controversial element is a plan to send out $1,200 checks to people earning up to $75,000 and couples earning up to $150,000, and to phase out the subsidies quickly after those thresholds.

Despite the pushback, GOP senators still expect Senate Majority Leader Mitch McConnell (R-Ky.) to unveil the GOP plan on Thursday.

That timeline, however, could be jeopardized by the internal disagreements over direct payments.

Once the GOP agrees to its own proposal, McConnell will negotiate with Senate Democratic Leader Charles Schumer (N.Y.). 

Schumer may use GOP divisions over direct payments to shift resources to his priority: expanding the nation’s unemployment benefits program.

Senate Appropriations Committee Chairman Richard Shelby (R-Ala.) and Judiciary Committee Chairman Lindsey Graham (R-S.C.) raised objections to the direct-payment proposal after the meeting.

“I personally think that if we’re going to help people, we ought to direct the cash payments maybe as a supplement to unemployment not to the people that are still working every day, just a blanket cash check to everybody in America that making up to $75,000. I don’t know the logic to that,” Shelby told reporters after the meeting.

Graham made a similar argument to GOP colleagues.

“I’d rather take that $250 billion and put it in a system that will give people sustainable income,” Graham said. “Direct payments make sense when the economy is beginning to restart, makes no sense now because it’s just money.”

 “What I want is income, not one check. I want you to get a check you can count on every week, not one week,” Graham added. “Here’s what I’m focused on: You have unemployment insurance that is totally inadequate, let’s beef it up.”

Graham said he supports a small-business relief plan that Senate Small Business Committee Chairman Marco Rubio (R-Fla.) is working on with Sen. Susan Collins (R-Maine) to provide loans to businesses that would be forgiven if they avoid layoffs.

Graham noted there isn’t anything in the GOP plan to beef up unemployment benefits, a top priority of Democrats, and said he would favor that approach over simply sending people checks.

He said the Democratic proposal makes “perfect sense to me” because the maximum unemployment benefit in South Carolina is $326 per week.

“I am willing to supplement that up to, let’s say, $80,000 in income. Say 75 percent of $80,000 should get everybody through the two or three months, whatever time period we got, then we’ll re-evaluate,” he added.

Graham said he doesn’t know whether direct payments will be included in the final bill although some GOP senators say it has little chance of being removed from the Republican proposal given Trump’s strong support.

He predicted the GOP plan would probably come out Friday though other colleagues offered more optimistic timelines. 

Other GOP senators have raised objections to direct payments.

Sen. Rand Paul (R-Ky.) on Wednesday said, “I think the best way to help people who are out of work from quarantine and the coronavirus is through unemployment benefits.”

“I think it should be related to employment or unemployment,” he added. “If you’re still employed and doing well, why would we want to send you $1,000? It just seems to me fiscally irresponsible just to send everybody money.”

There’s more Republican consensus on providing $250 billion to $300 billion in liquidity to small businesses and approving a series of business tax-relief measures.

Sen. James Lankford (R-Okla.) said the small-business component of the stimulus package “has the greatest bang for the buck,” adding “a one-time check that comes to someone is not as significant as knowing my job’s going to be there and I’m going to be able to maintain my job.”

Rubio has proposed giving businesses forgivable loans to pay for payroll, business, rent and mortgage expenses. They would not have to be repaid if employers keep workers employed. The loans would be handled through local banks and credit unions to eliminate excess government bureaucracy.

Another controversial topic is how to help U.S. airlines, which spent tens of billions of dollars in recent years on stock buybacks to juice up share prices but now face the possibility of bankruptcy. Airlines earlier this week requested $30 billion in grants from the administration but GOP lawmakers have rejected the idea.

Lankford acknowledged that some industries such as airlines “are going to need some loans at this point” but said he’s “not supportive of individual dollars and grants being targeted toward this industry or this industry.”   

While not in the current GOP stimulus plan, some Republicans are rallying around a proposal floated Thursday by Sen. Steve Daines (R-Mont.) to provide a federal backstop for COVID-19 vaccine research.

Under his proposal, pharmaceutical companies would be reimbursed for unsuccessful research efforts, which would incentivize them to devote more resources to developing a vaccine, according to GOP lawmakers who heard his plan at Thursday’s meeting.

Even though there are serious divisions over the direct payments, GOP senators are under intense pressure to get a bill passed as soon as possible.

“If we don’t, we’re going to get our asses kicked,” Graham said.