COVID relief negotiations stumble near finish line. What’s next?

With two weeks until expanded unemployment benefits run out for millions of Americans and days until their next funding deadline, a frustrated and fractured Congress departed for the weekend Friday, leaving critical coronavirus relief in limbo.  

Lawmakers have worked feverishly and have nearly reached a deal, but the final points of disagreement, over COVID-related lawsuits and funding for state and local governments, have proven to be treacherous for compromise.

The impasse has shifted the timeline itself, with leaders now threatening that Congress may work through Christmas. Many believe a deal could come at almost any day or hour. But that optimism is sloshing around with icy concern that any COVID relief package may slip into next year.

“It doesn’t look too good,” said Sen. Pat Roberts, R-Kansas. “We have a history here now of going to the 11th hour and 59th minute on all of this. And that’s very unfortunate. That’s where we are.”

What exactly is Congress negotiating?

Lawmakers are facing two massive deadlines at once.

• Funding the government. Currently, the funding that keeps most of the government operating is set to run out Dec. 18, after lawmakers passed a stopgap funding bill Friday that bought them an extra week to negotiate. Leaders in both parties hope to pass a mega spending bill, called an “omnibus,” to fund and designate the spending for the next year. This is seen as a must-pass issue.
• COVID relief. Congress is under pressure to pass another coronavirus relief package and the easiest way to do this would be to attach it to an omnibus funding bill, essentially hitching a ride to become law. Members know that communities are facing increased hardships because of the virus right now and that several key parts of the CARES Act, the original relief bill, are expiring around the end of the year.  

What is the conflict?

Senate Republicans are divided and do not seem to have enough votes on their own for any one relief plan. Thus, anything that passes the Senate will need bipartisan support. 

Where both parties agree

The starting problem was straightforward: Republicans did not want to spend as much money as Democrats — on COVID relief or the budget. Where Democrats saw rising need and struggle, Republicans saw the potential for run-amok government spending.

But a bipartisan collection of senators, who call themselves “the dinner group,” whittled down their must-haves list on COVID relief to a package costing somewhere around $908 billion, with much of that coming from unused funds from previous relief packages.  

“We’ve solved a whole series of elements,” said Sen. Mitt Romney, R-Utah, who is among the senators trying to forge a deal. “Everything from broadband, to vaccine, to health care support for hospitals, the [Paycheck Protection Program], unemployment insurance — we’ve laid all these things out,” he said Thursday.

The bipartisan “dinner group” package would include:

• Extended and added unemployment benefits of an additional $300 per week for four months
• Another round of the Paycheck Protection Program, which offers forgivable loans for small businesses so they can pay their employees 
• Funding for food and housing relief
• Funding for COVID-19 vaccine distribution

Lawmakers have spent weeks negotiating these concepts, each of which had its challenges.

“I think that the bipartisan group has made real progress in putting together a robust framework that addresses a very wide range of issues,” Sen. Chris Coons, D-Del., said. Then, he noted the problem.

“We have an eight-month impasse around liability issues, and it’s proving to be extremely difficult to close it,” he said.

The liability problem

After navigating weeks of choppy waters, negotiators have found themselves on jagged rocks over the issue of how to balance protections for essential workers, who run the risk of contracting COVID-19 because of their jobs, with those of businesses, which have argued that they had no warning or time to prepare for a pandemic and there is no guaranteed way to protect all individuals from getting sick, other than to have them not work at all.

Senate Majority Leader Mitch McConnell, R-Ky., has repeatedly insisted that without anything protecting businesses from lawsuits, they could face another economic disaster in the courtroom. But Democrats are resistant to his proposals.

“About seven in 10 small business owners said a second pandemic of lawsuits was a major concern,” McConnell said on the Senate floor Friday.  “University administrators told us liability is, quote, ‘a national problem requiring a national solution’ that could produce ‘a chilling effect’ on American education if not addressed.”

But Democrats argue relatively few businesses are at risk for these lawsuits and that potential legal action is an important incentive that keeps employers conscious of safety needs and allows workers compensation if harmed.

Senate Minority Leader Chuck Schumer, D-N.Y., has called McConnell’s push a “poison pill” and conveys it as a help for big business.

“It’s an unconscionable position: no relief for the American people unless corporations receive blanket immunity from lawsuits,” Schumer charged in his own floor remarks Friday.

On this question alone, the bipartisan “dinner group” has spent the most time.

Several ideas are on the table, per sources in both parties:

• Freeze lawsuits based on COVID-19 exposure for three to six months in order to give states the time to come up with their own laws on this. Leave it to them to set the bar for legal action.
• Set some kind of “affirmative defense” for businesses — clear criteria they can meet that show they tried to keep workers safe and should be protected from lawsuits.
• Set a different standard for lawsuits regarding work in 2020, given that businesses had little to no warning of the pandemic and faced challenges beyond their responsibilities, including shortages of protective equipment. 

None of these proposed solutions have led to a clear handshake from either side. Instead, both parties accuse the other of refusing to accept any compromise. Republicans now question if a deal can be made at all on liability.

So what now?

The path forward is unclear. The bipartisan group of senators continue to meet — largely by Zoom — in hopes that they could land on a deal at any moment. But that would require compromise on the liability issue.

Republican leaders are for now suggesting that the issue be dropped altogether, but with it, they suggest also dropping proposals to send $160 billion in aid to state and local governments.

“My sense is that they’re not going to get there on the liability language,” Sen. John Thune, R-S.D., said Friday. “So my view is that the best thing that could happen is the pieces of this that everybody agrees on, take that out, take the funding for state local governments out, and pass the rest of it.”

But state and local government funding is a key demand of Democrats, including House Speaker Nancy Pelosi, D-Calif. The $160 billion in the bipartisan deal is a fraction of their original demand.

“State and local governments face the biggest cash crisis since the Great Depression,” she said in October. 

Without the state and local government money, the total package of relief in the “dinner group” deal comes to about $748 billion. 

While losing state and local aid would run the risk of losing Democratic support for the bill, it could also open up an opportunity: It could allow some form of direct stimulus checks to American citizens to re-enter negotiations. 

Sens. Josh Hawley, R-Mo., and Bernie Sanders, I-Vt. have pushed to send out another round of $1,200 checks as part of this relief package, and Republican sources in particular have said the concept of trading state and local funding for stimulus checks has gained traction in the past two days. 

“This ought not to be difficult,” Hawley said Friday.  “So I’m hopeful we can get it done. But we’ll see.”