Politics

Congress’ Race to Pass COVID-19 Relief Package

The clock is ticking as Congress attempts to reach bipartisan agreement on a COVID-19 relief bill before Christmas. After multiple failed attempts to agree upon what should be included in a new aid package, House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Mitch McConnell, R-Ky., are trying one more time to pass the package before year’s end. 

Garrett Bess, vice president of government relations and communications at Heritage Action for America, the grassroots partner organization of The Heritage Foundation, joins the show to break down what you need to know about the proposal and how much it may add to the national debt. 

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Virginia Allen: I am joined by Garrett Bess, the vice president of government relations and communications at Heritage Action for America, the grassroots partner organization of The Heritage Foundation. Garrett, welcome to the show.

Garrett Bess: Thank you, Virginia. Appreciate you having me on.

Allen: So this week Congress is in negotiations over a COVID-19 relief bill that they hope to pass before the end of the year. Congress has really struggled to have a bipartisan agreement with one another on this aid package on what should and shouldn’t be included.

So as we’re quickly approaching Christmas, Republicans and Democrats, they’re talking right now about the possibilities of what should be in this package. So can you just give us a few quick highlights, big picture, what do we know right now about this bill?

Bess: Sure. And there’s basically two separate debates that are sort of being conflagrated together. You have the end-of-year spending bill that has to get done. Government funding runs out December 11th at midnight, and this is something that we’ve known about for months. This is something that tends to happen every year about this time.

But on top of that, this year, you have work going on to attach to that spending bill an additional COVID spending package. And there’s several main components to the debate, while not necessarily all of them are being included in this first proposal that I’m sure we’ll talk about in a second.

The first one is basically relief and help assistance for businesses and particularly small businesses that took the form of the Paycheck Protection Program earlier this year, and there’s an effort to revive that program.

Additionally, there’s sort of health expenditures. So things that are directly targeted at COVID relief, such as money for vaccinations, money for therapeutics, etc.

Then there’s sort of what I would categorize as sort of economic stimulus-type stuff, designed to bolster the economy sort of post-COVID or deal with the economic downturn of COVID. And this is where a bulk of the debate is occurring.

Many people on the left want to backfill the coffers of state and local governments’ budgets from decreased tax revenue due to lockdowns. And there’s also an effort to include another round of stimulus checks of some kind directly to individuals and families.

And then there’s an unemployment insurance provision that was included in CARES Act that, in addition to the expanded unemployment insurance program that generally is functioning in sort of normal times, there was an additional $600 per week payment lumped in on top of that unemployment insurance payment.

And this resulted in people actually being paid more on unemployment than they were in their jobs. That was reduced in July to $300 a week, and that is set to expire. So that’s part of the conversation as well.

Allen: All right. So, we’re going to dive in a little bit deeper to kind of a number of those elements that you mentioned here in just a second. …

So our audience knows, we’re having this conversation on Tuesday afternoon, things are changing quickly. But do we know right now how much this bill is proposing? How many billions?

Bess: Yeah, so, just to back up slightly from this week for a second, there’s been several proposals that have floated around. Primarily the two main proposals were, one from sort of the Democrats led by [House Speaker Nancy] Pelosi. That was roughly $2.5 trillion of additional spending.

And then [Senate Majority Leader Mitch] McConnell and Senate Republicans sort of floated a much narrower, more targeted COVID relief bill that roughly scored about $500 billion.

So … those have been the two, basically, competing visions for how to deal with COVID relief over the preceding months.

About this time last week, maybe a couple of days sooner, there was a bipartisan group of senators led primarily by Sen. [Mitt] Romney from Utah and a couple other Republican senators who teamed up with some Democrat senators, who came up with a proposal that is sort of the base for a lot of the discussions this week. It scores about $908 billion. So roughly about a trillion-dollar spending bill. And that is sort of the base framework for the discussions this week.

What ended up happening was [former] Vice President [Joe] Biden, from what we understand, called Speaker Pelosi and [Senate] Minority Leader Chuck Schumer, and said, “You should take that deal. And then we can go back later next year and get another round of spending under our belts.”

So that was kind of the conversation that occurred that broke the log jam on the left. And from what we understand now, it’s essentially House and Senate Democrats agreeing that this is a bipartisan proposal that they would support.

Supposedly the White House is involved in talks about the only remaining sticking point is House and Senate Republicans who have basically not signed off yet on this bill.

Allen: All right. So as it stands right now, one of those elements that has potentially, maybe sort of been tossed out in order to get that bipartisan agreement is around those specific stimulus checks that, of course, with the CARES Act, the majority of employed Americans were sent and many unemployed, obviously unemployed, a $1,200 stimulus check.

So that’s something that Democrats really wanted, again, but that’s something that they’re laying down and saying, “OK, we can wait until next year to do that.”

Bess: That’s an interesting debate that’s going on because you actually have a wing of Republicans in Congress that want it as well, and they’re not necessarily teaming up with the progressive wing of the Democrat Party, but they are based sort of on their own, angling for the same goal. And that is direct relief to American individuals and families.

It’s widely sort of discussed that there’s another round of $1,200 payments, that that’s what they’re sort of pushing for. Whether they’re successful or not, I don’t know. I think that President [Donald] Trump is inclined to agree with that argument. And so it’ll be interesting to see how much he leans into it.

Right now, they are not included in this bipartisan proposal. The main components of the proposal being reauthorizing the Paycheck Protection Program at sort of roughly the $300 billion mark, aid to state and local governments at roughly a $250 billion mark, and then the reauthorization of this additional supplemental unemployment insurance payment at a $300 per week amount.

So those are the three main components and there’s, of course, ancillary components, but currently the direct payments are part of the discussion.

Allen: OK. So let’s chat about that aid for small businesses and businesses as a whole. I know for my own family, a number of whom run small businesses, this has been an incredibly challenging year. And the Christmas season is full of lots of expenses. People are really, by this time, kind of scraping the bottom of the barrel.

So for small business owners, is this going to be really critical relief? What does this relief look like coming out of this aid package potentially?

Bess: I’m going to be careful on how I answer this because there’s definitely a health component of sort of the spread of COVID that is impacting small businesses.

And there’s probably a warranted discussion we could have around making sure that those small businesses can survive short-term downturns, but a lot of the pain being afflicted on small businesses have to do with lockdowns that are not necessarily based on good sound science and public health policy.

And so I think there is sort of an initial amount of relief and assistance that should be provided to small businesses. And that’s something that [The] Heritage Foundation has supported, even going back to March with an employee retention tax credit, while the employee retention tax credit was not the base program that ended up being formed.

Instead, Congress came up with the Paycheck Protection Program. We’re not sort of fundamentally opposed to the Paycheck Protection Program. We agree with its general merits. And we agree with the general way in which it was trying to solve a problem. But small business owners have had a lot of sort of mixed reviews about how well the program has functioned.

We still believe that the best way to help small businesses and their employees is to maintain the connection between the employee and the employer, and to limit lockdowns to localized situations for short durations of time, as COVID spikes in a particular small region.

These massive lockdowns … really have a negative impact on small businesses. In our view, the way to help small businesses is to reopen, allow them to reopen safely, as quickly as possible. There’s no amount of government spending that can replace the private sector economy.

Allen: Yeah, I know that’s definitely an issue that we have covered closely here at The Heritage Foundation. Couldn’t have said it better. That’s such a priority to make sure that that connection, like you say, is remaining between business owners and their employees, and that allows for sustainability moving forward.

But I wanted to ask you, you brought up earlier as we were chatting … one of the controversial elements of this bill being funding for state and local government bailouts.

Many Republicans oppose this, they say, “All right, well, if we’re giving money to these struggling states, to these struggling cities, what is often the case is you’re just bailing out Democratic-run states and cities.” Their budgets have been mismanaged for years already, $150 billion worth of aid was provided to state and local governments under the CARES Act this spring.

Where do these negotiations stand right now around aid, specifically to state and local governments?

Bess: It’s a great question. And this is something that Heritage Action and the Heritage Foundation have been leading the debate on, on the conservative side of the ledger for months now.

So far, we have been winning this debate. Conservative politicians on Capitol Hill have largely stayed with us on this issue. They have so far been able to keep direct bailouts of state and local governments out of the talks and out of legislation. Whether they’re able to maintain that through this next round is really, I think, up to organizations like ours to provide them with the necessary support to win on this issue.

And also to Americans who agree with us, to call their elected members and let them know that while it is the holidays and while a lot of people are focused on the ongoing issues with the presidential election and the two Senate special elections in Georgia, we are also watching Capitol Hill.

And the last thing that we want to see happen is for states that have been mismanaged, for sometimes decades, to use the COVID crisis as an excuse for getting government money and just simply bailing them out of their bad decisions.

That would be atrocious, particularly for Americans that live in states that have managed their budgets well, who have worked hard through the years to keep their spending in line with their revenues, to simply send money to states like New York, who in the midst of a COVID downturn, lockdown of the state, … I believe their state budget increased last year by $8 billion.

That increase is actually more than many states’ across this country entire budget. That’s a little shocking to believe, but some of the smaller states actually don’t have huge budgets. And so for them to do that and give state workers a pay raise while private sector employees are getting cut left and right, and governments are refusing to let them do business, is just an astonishing mismanagement and we should not be covering for them.

Allen: One of the really fascinating parts of the bill that is being proposed, Senate Majority Leader Mitch McConnell, he’s been a strong advocate for including a liability shield to protect universities, businesses, and other organizations from COVID-related lawsuits.

So this isn’t necessarily a financial gift, but it’s guarding people’s finances. So this is essentially a financial shield that would protect businesses from losing money on lawsuits. What are your thoughts on including a legal safeguard like this in the bill?

Bess: Well, I think it’s imperative. The left is going to do everything they can to keep that out of any sort of discussion, but it is imperative to have that type of a shield in place so that businesses that do try to just get their doors back open aren’t immediately swamped with lawsuits from people claiming that they contracted COVID in that establishment.

You can imagine, I mean, government guidance on COVID has been inconsistent, to say the least, since March. At first, we were told not to wear a mask, then we were told to wear masks, and then social distancing rules were sort of suggested at varying lengths.

I was at someplace the other day in which the local ordinance required 10 feet of social distancing. So it’s just been uneven and it’s been something that small businesses in particular have had a really hard time navigating.

And to put yourself in the shoes of a small business person who is simply trying to reopen their restaurant and serve food again, to be met with an onslaught of lawsuits would just be disastrous for our economy. And so, including some sort of liability protection as it relates to COVID I think is imperative for truly getting our economy back on its feet.

Allen: So, Garrett, the clock is ticking, though. We don’t have many days before Congress is set to head home for the Christmas holiday. So, … can this bill be passed and do you think it’s possible before Christmas that this actually can get passed?

Bess: Well, I do think it can get passed. You know what, there’s basically three really big pieces of legislation that are moving this week. One of which we didn’t discuss and that’s the National Defense Authorization Act. This is the authorization legislation for the entire Defense Department and budget. …

That’s a whole different discussion and I won’t get into that, but that is on the floor of the House today. And we expect it to be passed by the House and then the Senate later this week. So that’s one piece of legislation that’s moving.

December 11th, like I mentioned, is when government funding runs out. So that’s this coming Friday at midnight. We could talk about the particulars of how governments shut down and why.

Oftentimes our elected leaders choose Friday at midnight to have government expire because it basically gives them an extra Saturday and Sunday to negotiate a funding deal without the Americans really seeing the impact of a government shutdown, but we expect the House to pass a one-week continuing resolution to simply extend government funding for one more week.

So that funding should pass the House and pass the Senate, which will give them until December 18th at midnight, which, because that’s also a Friday night, will essentially give them until about December 20th to negotiate some sort of financial spending bill.

So with that as the backdrop, that is how COVID negotiations are occurring. It’s definitely possible to do this. This is a play that is well-known in Washington. The holidays distract people. The holidays also provide a means by which many times elected leaders use to basically push rank-and-file members up against their own desire to get home to their families for Christmas and New Year’s to get votes that they otherwise wouldn’t get. So this is a known playbook.

They definitely can get it done. I think it will depend upon organizations like ours to make sure that whatever passes is not disastrous or the disastrous elements are mitigated in some way.

But I think if you were to ask me here on Tuesday, December 8th, whether I think it’s likely that it would get done, I think there’s a lot of desire to get these things done, but sometimes what ends up happening in D.C. is D.C. actually puts too many things in a bill and it sort of collapses under its own weight.

I think, probably, we’ll see how the next week unfolds, but I think, probably, there’s just too many decisions, there’s too much disagreement, and that we will see some sort of several-month continuing resolution to kick government funding down the road another three months or so. And we’ll be having this debate again in the new year.

Allen: So, if I could ask you on a scale of one to 10, with one being low probability and 10 being high, how likely do you think it is that Congress is going to be able to agree and pass an aid package before the end of the year?

Bess: Yeah. Trying to put me on the top seat here. I would give it a middling chance. So I’d probably do somewhere around a four or five.

There’s a lot of energy that is designed to basically get a COVID relief bill done and attach it to an omnibus spending bill. COVID relief needs an omnibus spending bill to sort of ride on. And right now there’s a lot of disagreements in the omnibus spending bill that we didn’t discuss.

So the first step in this process would have to be getting the omnibus disagreements ironed out. That is a huge task in and of itself. And then you have to pivot to getting the COVID relief disagreements ironed out. And frankly, I think … the sort of two sides are miles apart still on their main asks. So as long as they stay entrenched on their main asks and not sort of shelve areas that they disagree on, then … I just don’t think the COVID relief bill’s talks go much further.

I think the other open-ended question about this is whether Republicans believe that this is going to be the last time that Democrats ask for more spending on COVID.

I think largely they don’t think that. And they think that all Democrats are going to do is get this round of spending at a trillion dollars and then come back next year and bash Republicans again, trying to get more money. So I think the Republicans will probably dig in a little bit here. So that’s why I gave it like a four or five on the scale.

Allen: Well, Garrett, … it concerns me a little bit how loosely I do feel like Congress throws billions and now trillions around. And we’ve just seen this year, our national debt is climbing and climbing and climbing, and of course people are struggling, businesses need relief, but does it concern you how it almost seems like we are at an accelerated rate becoming a little bit looser and looser with the national pocketbook?

Bess: Yeah. I mean, it’s astounding. This bill, if it comes together, an omnibus spending package along with a COVID spending package, this’ll be most likely depending on what the final number is, the second-most expensive bill in American history. The first one being CARES Act, which passed earlier this year.

So to your point, between CARES and then this new round of talks, if they come to maturation and actually produce a bill, between CARES, that bill, it will be most likely well north of $5 trillion of spending this year between the two of them. That will be the single biggest expenditure in U.S. history.

And so, I think we’re at a really precarious point at which a bipartisan compromise bill at $1 trillion is something that everybody sort of rallies around as a low-number piece of legislation.

$1 trillion is not small beans and to add as much debt to our national debt load this year as we already have, and potentially still are going to add in the next week or two, is just really astounding. We’re sort of accelerating down a path that we’ve been on for a long time and now we’re just sort of throwing abandon to the wind.

Allen: Yeah. Well, Garrett, it’s going to be interesting to watch over the next two weeks as all this unfolds and what happens as we head into the Christmas holiday. But really appreciate your time today and you breaking all this down for us.

Bess: Virginia, appreciate you having me on. Have a good Christmas.

Allen: You as well.

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