Negotiations to craft a massive stimulus package slowed to a crawl Sunday amid sharp partisan disagreements over worker protections, corporate bailouts and how many hundreds of billions of dollars need to be pumped into the faltering U.S. economy.
The impasse was laid bare when Democrats blocked a motion to proceed to a $1.8 trillion Senate GOP stimulus package on a party-line vote of 47 to 47.
The setback left Senate Majority Leader Mitch McConnell (R-Ky.) fuming, as it now appears less likely negotiators can reach a deal before financial markets open Monday morning.
McConnell blamed Speaker Nancy Pelosi (D-Calif.) for pouring “cold water on the whole bipartisan process” after she declared during a leadership meeting Sunday morning that she was not part of any Senate deal.
The GOP leader vowed to force Democrats to vote again on a motion to proceed to the bill at 9:45 a.m. Monday, 15 minutes after markets are due to open.
While the vote dealt the talks a serious setback, senators are feeling pressure to get a deal quickly, as failure to reach an agreement could cause markets to plunge even further.
Stock futures dropped by 5 percent on Sunday evening before hitting a down limit that stopped trading.
Treasury Secretary Steve Mnuchin and Senate Democratic Leader Charles Schumer (D-N.Y.) met throughout the day Sunday, late into the evening.
Mnuchin told reporters the two sides were “close” but with each passing hour, a deal had yet to emerge.
Lawmakers are also feeling increasingly anxious about their own health as they hang around the Capitol.
“I don’t touch anything without this,” said Sen. Pat Roberts (R-Kan.), holding up a Clorox wipe.
The 83-year-old senator said he’s been careful not to go near his grandkids.
For many senators, the announcement Sunday that Sen. Rand Paul (R-Ky.) tested positive for the coronavirus was a frightening wakeup call. He had used the Senate gym only hours before.
A total of five Senate GOP senators are now in self-quarantine.
Two other Republicans, Sens. Mike Lee (Utah) and Mitt Romney (Utah), announced Sunday they would isolate themselves out of caution, joining Sens. Cory Gardner (R-Colo.) and Rick Scott (R-Fla.).
Lawmakers are eager to leave town but know McConnell will keep the Senate in session until they pass stimulus legislation.
The negotiators appeared to be cruising toward a deal on Friday and early Saturday after Republicans gave Democrats key concessions on hospital funding and unemployment insurance.
GOP leaders claimed there was broad agreement on the basic principles of the bill, and National Economic Council Director Larry Kudlow told reporters during negotiations that “the children are playing well with each other.”
The sense of comity and cooperation shattered Sunday morning when Schumer and Pelosi told reporters they had not signed off on the Senate bill.
Democrats said Republicans backtracked on a tentative agreement to substantially increase unemployment insurance.
“We had an agreement last night that they cut back today,” said Sen. Debbie Stabenow (D-Mich.) after the failed procedural vote.
Schumer later panned the Senate legislation as “a highly partisan bill,” even after it was drafted following hours of bipartisan talks on Friday and Saturday.
“The legislation has many problems. At the top of the list, it includes a large corporate bailout with no protections for workers and virtually no oversight,” he said on the Senate floor after Democrats blocked the bill.
Sen. Joe Manchin (W.Va.), a Democratic centrist, on Sunday afternoon said the two sides were “miles apart,” defying McConnell’s prediction around noon that the bill would win bipartisan support.
Now the Senate talks are in limbo, giving House Democrats more time to draft their own bill to counter the Senate GOP plan.
Republicans think Senate Democrats blocked the bill to give Pelosi more leverage in the negotiations. They accused Democrats of trying to cram the stimulus bill with long-sought liberal priorities that wouldn’t otherwise have a chance of becoming law.
“One House Democrat, for example, said this is a tremendous opportunity to restructure things to fit our vision,” McConnell said, making reference to House Majority Whip Jim Clyburn (D-S.C.), who recently told fellow Democrats the stimulus could be a vehicle for their policy priorities.
As the hours passed, each side ramped up its demands and backtracked on earlier offers.
Negotiators at one point had agreed to a tentative deal to provide $250 billion in rebate checks — $1,000 for every adult and $500 for each child — matched by $250 billion in expanded unemployment insurance.
But by Sunday, Republicans reverted to their initial call to mail out $1,200 rebate checks at a total cost of $300 billion.
Democrats said the GOP offer on unemployment insurance was inadequate.
The Senate bill as drafted would provide three months of unemployment insurance. Democrats want at least four months, according to a person familiar with the talks.
Republicans said they were stunned that Democrats would not accept what they called a “generous” plan.
“It’s the most generous unemployment insurance plus-up by far ever in the history of our country. It actually adds more money to unemployment insurance than the current system has,” Sen. Rob Portman (R-Ohio) said on the floor.
Disagreements also blossomed over corporate loans to distressed industries and economic relief for state and local governments.
Senate Republicans on Saturday asked for $500 billion for the Treasury Department to expand a Federal Reserve corporate bailout fund to help airlines, hotel chains, energy companies and other industries facing a credit crunch because of the economic crisis.
While the money would be used for loans and not cash grants, Democrats balked because Mnuchin would have broad latitude to distribute the relief and CEOs wouldn’t be required to keep workers on payroll in exchange for help.
Democrats also objected to what they called “weak” restrictions on corporate stock buybacks, which Mnuchin could waive.
Democrats upped their requests by asking for $450 billion to go to an emergency supplemental spending bill to fund hospitals and variety of federal departments and agencies.
The request was nearly double the $242 billion Senate Republicans proposed putting in the supplemental spending package and nearly 10 times the amount the White House requested on Tuesday.
Another impasse is over how much money to send to states.
Senate Democrats initially asked for a whopping $750 billion for a state stabilization fund, a request that stunned Republican negotiators.
Democrats also asked for additional Occupational Safety and Health Administration funds for workers and for the Department of Education to take over monthly payments for student loan borrowers and to cancel $10,000 in student debt for each borrower.
Despite the partisan fighting, there are solid areas of agreement, particularly on the area of small-business relief.
Both sides have agreed to provide at least $350 billion and perhaps more for a small-business relief fund that would provide federally guaranteed loans to small businesses and forgive the debts if employers keep their workers on payroll.