On The Money: Battle heats up for phase-four coronavirus relief bill | McConnell pumps the brakes, says he’s OK if states go bankrupt | Coronavirus oversight lags as trillions in relief head out the door

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THE BIG DEAL— Battle heats up for phase-four coronavirus relief bill: The Senate’s passage of a $484 billion coronavirus relief bill on Tuesday is setting the stage for negotiations on an even bigger package that could rival the $2.2 trillion CARES Act passed by Congress last month.

The legislation would funnel tens of billions if not hundreds of billions to state and local governments and could address infrastructure spending and election security.

Speaker Nancy Pelosi (D-Calif.) and Senate Democratic Leader Charles Schumer (N.Y.) on Tuesday called for Congress to begin thinking about “CARES 2,” while Senate Majority Leader Mitch McConnell (R-Ky.) warned of the growing amount of debt the U.S. is adding, previewing the battle to come. The Hill’s Alexander Bolton brings us up to speed here.

What’s on the table: While the main focus of the proposal would be aid for states, Democrats are also pushing  for federal assistance for people having trouble paying rent. funds for election reform, hazard pay for essential workers, including doctors, nurses and grocery store clerks, and funding for the U.S. Postal Service.

McConnell pumps the brakes, says he’s OK if states go bankrupt: “I think it’s also time to begin to think about the amount of debt we’re adding to our country and the future impact of that,” McConnell said. “Let’s weigh this very carefully, because the future of our country in terms of the amount of debt that we’re adding up is a matter of genuine concern.”

McConnell also said that he supports letting states declare bankruptcy as they face falling revenue and soaring unemployment claims caused by the coronavirus.

“I would certainly be in favor of allowing states to use the bankruptcy route. It saves some cities. And there’s no good reason for it not to be available. My guess is their first choice would be for the federal government to borrow money from future generations to send it down to them now so they don’t have to do that. That’s not something I’m going to be in favor of,” McConnell said.

• State governments are staring at budget shortfalls that will substantially exceed what they faced during the great recession, even before the full scope of the economic damage caused by the coronavirus pandemic is known.
• Budget analysts, governors and legislative leaders around the country are already holding regular meetings to assess the damage, watching in real time as their revenue estimates fall short of worst-case scenarios mapped for a recession.
• In increasingly urgent pleas to Congress, states have asked for $300 billion to $1 trillion to bail them out, and that may not even be enough to replace their lost revenue.

The Hill’s Reid Wilson explains here.

Read more: Treasury Secretary Steven Mnuchin on Wednesday said that there’s a desire to “spend what it takes to win the war” against the coronavirus crisis, though he also said he was sensitive about adding to the national debt.

LEADING THE DAY

Coronavirus oversight lags as trillions in relief head out the door: Democrats are struggling to monitor the Trump administration’s handling of coronavirus relief funding at a time when Congress is poised to provide an additional $500 billion in emergency aid and watchdogs warn of massive fraud and abuse.

While party leaders have demanded strict accounting of the trillions of dollars Congress has approved to address the pandemic, they’ve faced hurdles setting up oversight mechanisms, even as the massive outlays start flowing out the door. The Hill’s Mike Lillis and Scott Wong explain here.

Kudlow: Businesses shouldn’t be held liable if employees, customers contract coronavirus: White House economic adviser Larry Kudlow said he supports protecting businesses from coronavirus-related lawsuits as the Trump administration eyes reopening the economy.

Kudlow, the director of the National Economic Council, said on CNBC Wednesday that companies and small businesses should not have to deal with “trial lawyers putting on false lawsuits.”

“You’ve got to give the businesses some confidence here that if something happens, and it may not be their fault — the disease is an infectious disease — if something happens, you can’t take them out of business,” Kudlow said.

“You can’t throw big lawsuits at them. And I think liability reforms and safeguards are going to be a very important part of it,” he continued.

The remarks come as business groups frantically lobby Congress to shield corporations from liability lawsuits if customers or employees contract the coronavirus when businesses reopen.

Five threats to US food supply chains: The coronavirus pandemic has upended food supply chains, led to closures of meat producing plants and left Americans with the unsettling experience of seeing empty shelves at supermarkets.

Experts say that by and large, Americans don’t need to worry about food running out, but that does not mean all food will be readily available. Here are five of the major challenges facing food supply chains.

• Virus outbreaks at food plants: One vulnerable spot in the nation’s foods supply chains is processing plants, where workers often stand in close quarters as they prepare food to be delivered to grocery stores and wholesale customers. 

• Agricultural reliance on guest workers: The pandemic and some of the policies surrounding it could be a problem for farmers and their workers.

• Supply chain mismatches: Even as some grocery store aisles are empty and food banks clamor for donations, some agricultural businesses are resorting to spilling or throwing away huge quantities of food.

• Increased food insecurity: Even before the pandemic began, 37 million people were considered food insecure, according to Monica Hake, a senior research manager at Feeding America, a hunger-prevention group.

• Crunch on delivery capacity: As more and more cities have locked down, the problem of how to get food into people’s homes has grown.

GOOD TO KNOW

• Stocks closed with gains Wednesday for the first time this week as oil prices rebounded from a historic drop into negative territory.
• Nobel Prize-winning economist Joseph Stiglitz is ripping the Trump administration’s response to the coronavirus pandemic, cautioning that the U.S. could be headed toward a second Great Depression as a result.
• Harvard University will no longer accept funding allocated to it through a federal coronavirus aid package after President Trump questioned why the school needed assistance.