Senate GOP Unveils 'Targeted' COVID-19 Relief Package

By Andrew Kragie
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Law360 (September 8, 2020, 7:45 PM EDT) -- The Senate's Republican leaders on Tuesday unveiled a "targeted" coronavirus pandemic relief proposal and scheduled votes for Thursday in an effort to jump-start stalled bipartisan negotiations and to portray Democrats as obstacles to new support for small business, $120 billion for schools and child care, unemployment aid and virus-related liability protections.

The proposal would allow a second round of forgivable loans to small businesses through the Paycheck Protection Program, restart federal unemployment benefits at $300 a week and give more funding to schools, especially those that open physically. Even before its release, Democratic leaders dismissed the plan as woefully insufficient and "laden with poison pills," making it unlikely to become law.

The bill could give new motivation for stalled relief negotiations between Democrats and Trump administration officials. It will allow Republicans to force Democrats on the record as opposing a relief measure less than two months before Election Day.

"The American people don't need us to keep arguing over what might be perfect. They need us to make law," Majority Leader Mitch McConnell, R-Ky., said on the Senate floor. "Every senator who has said they want a bipartisan outcome for the country will have the chance to vote, for everyone to see."

The 285-page package unveiled Tuesday was dubbed the Delivering Immediate Relief to America's Families, Schools and Small Businesses Act. It also includes school choice legislation that gives tax credits for private and religious schools, a boost to an above-the-line tax deduction for charitable giving, about $50 billion for public health efforts, $20 billion for farmers, $10 billion for the struggling U.S. Postal Service and provisions boosting domestic mining of rare earth and other critical minerals.

The reopened Paycheck Protection Program would get some new funding and allow a second round of forgivable loans, with eligibility tightened to allow only businesses with up to 300 employees that suffered at least a 35% revenue drop.

The GOP package includes McConnell's top priority of a coronavirus-related liability shield for employers, schools and other entities. Plaintiffs and defense attorneys told Law360 the Safe to Work Act would be a sweeping transformation of tort law.

The proposal does not include a new round of stimulus payments or the payroll tax cut that President Donald Trump has pushed for months. It does not have new funding for state or local governments, although it gives more time to use previously allocated money. It does not address Democratic priorities including food assistance, evictions and foreclosures.

Democratic congressional leaders dismissed the new GOP proposal even before the language became public.

"Senate Republicans appear dead set on another bill which doesn't come close to addressing the problems and is headed nowhere," House Speaker Nancy Pelosi, D-Calif., and Senate Minority Leader Chuck Schumer, D-N.Y., said in a statement. "This emaciated bill is only intended to help vulnerable Republican senators by giving them a 'check the box' vote to maintain the appearance that they're not held hostage by their extreme right wing that doesn't want to spend a nickel to help people."

The Democrats said they are open to compromise and blast Republicans as slow to come to the negotiating table.

In May, the House passed a sprawling $3 trillion Democratic relief proposal. The Health and Economic Recovery Omnibus Emergency Solutions, or Heroes, Act includes nearly $1 trillion for state and local governments, another round of stimulus payments and hazard pay for essential workers.

It also included other elements that Republicans and even some Democrats have derided as a liberal grab bag: student debt forgiveness, protections for some unauthorized immigrants, money for union pension plans, a bipartisan plan to encourage banks to serve the cannabis industry and a two-year elimination of the cap on state and local tax deductions, which mostly benefits wealthy property owners in high-tax jurisdictions.

Senate Republicans struggled to agree on a counterproposal, with many arguing into the summer that Congress should not spend more money after allocating trillions in the spring. In late July, the conference put forward relief bills that would cost about $1 trillion.

Pelosi then led negotiations with Treasury Secretary Steven Mnuchin and Mark Meadows, the White House chief of staff who was previously a conservative congressman. Those talks ground to a halt last month amid dueling accusations of intransigence and political posturing.

--Editing by Stephen Berg.

For a reprint of this article, please contact reprints@law360.com.

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