Senate Majority Leader Mitch McConnell unveiled a sweeping economic rescue plan Thursday to pump $1,200 direct checks to taxpayers, $300 billion for small businesses to keep idled workers on payroll and $208 billion in loans to airlines and other industries.
It's the initial Republican offer on the biggest legislative package yet to respond to the coronavirus outbreak.
The GOP leader's effort builds on President Donald Trump's request for Congress to “go big” as lawmakers race to craft a $1 trillion economic aid and stimulus package amid the pandemic crisis and nationwide shutdown that's hurtling the country toward a likely recession.
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“We need to take bold and swift action as soon as possible,” McConnell, announcing his plan on the Senate floor.
The 247-page McConnell CARES Act puts the leader's imprint on an opening talks with Democrats in Congress as lawmakers prepare to work through the weekend to fast-track perhaps the biggest legislative undertaking since the 2008 financial crisis. Negotiations start Friday.
The GOP leader's plan aims to shore up households, businesses and the healthcare industry, which is bracing for an expected onslaught of patients falling ill from the virus that causes COVID-19.
The one-time $1,200 stipends would be sent to individuals — $2,400 for couples — phased out at income thresholds of $75,000 for individuals and $150,000 per couple. Additionally, there would be $500 payments for each child.
Individuals and families could also make penalty-free withdrawals of up to $100,000 from their tax-deferred 401(k) retirement funds. The plan would also loosen tax rules on charitable giving.
Additionally, the McConnell bill would provide $300 billion to small businesses, with loans that would eventually be forgiven for employers who use them to meet payroll expenses.
To shore up industry, McConnell's plan would provide $208 billion in loans and loan guarantees to distressed sectors, including $50 billion for commercial airlines, $8 billion for air cargo carriers and $150 billion for other eligible businesses, but those loans would have to be paid back.
Businesses would also be allowed to defer payment of the 6.2% employer payroll tax, and receive more generous rules for business deductions of losses and interest costs, under the GOP leader's plan.
The proposal also includes a specific provision to allow the Treasury secretary to “participate in the gains,” through stock options or other financial instruments, of companies that receive federal aid.
At the same time, caring for the expected surge of sick Americans is a priority for Congress.
The McConnell proposal contains a raft of health care provisions — including permanent liability protection for the manufacturers of respirators and other desperately needed medical gear to handle the pandemic.
At the consumer level, McConnell's bill would put into federal law the commitment from insurers that coronavirus tests will be cost-free to policyholders. Additionally, the bill requires coverage of coronavirus vaccines as a preventive service, at no cost to patients.
For the health care industry, the bill would establish a new Medicare payment for treating COVID-19 patients. It would suspend through the end of this year a 2% Medicare payment cut to providers under previously set budget restraints.
Trump administration officials, including Treasury Secretary Steven Mnuchin and economic adviser Larry Kudlow, are expected to return to Capitol Hill on Friday to launch bipartisan negotiations with Senate Democrats.
House Speaker Nancy Pelosi and Senate Democratic Leader Chuck Schumer issued a joint statement vowing to work with Republicans "in a bipartisan way to deliver for the American people as soon as humanly possible.”
The Democratic leaders said, however, their priority is to “make sure all workers are protected from the loss of a paycheck or that no family falls into financial ruin because of this pandemic.”
Democrats criticized the GOP plan as not doing enough for hospitals and health care providers. Groups representing hospitals, doctors and nurses are asking Congress for $100 billion.
The Democratic leaders called on Trump to ramp up production of medical supplies and rapidly erect temporary field hospitals under new authorities he has invoked in the Defense Production Act.
“America needs a Marshall Plan for our health care system,” said Schumer, citing the post-World War II program in which the U.S. financed rebuilding in Europe.
Keeping paychecks flowing for idled workers as jobless claims skyrocket is a top priority for both Republican and Democratic plans emerging from Congress.
But how best to send direct payments to Americans — as one-time stipends, ongoing payroll support or unemployment checks — is a crucial debate.
Democrats have other ideas for ushering aid to Americans by pushing more money into the existing unemployment insurance system. Schumer called it “employment insurance” — which he characterized as “unemployment insurance on steroids.”
Some GOP senators panned the idea of direct one-time checks, preferring instead to use the federal dollars to keep workers who are asked to stay home on business payrolls.
“What I want is income, not one check,” said Sen. Lindsey Graham, R-S.C., summing up the views of some exiting a long, private meeting of GOP senators on Capitol Hill.
McConnell's proposal aligns with the Trump administration's initial idea for economic relief. Mnuchin on Thursday suggested direct Treasury could send direct payments of $1,000 per adult and $500 per child so that a family of two parents and two children would receive $3,000. He said the first checks would go out by April 6, with a second wave by mid-May.
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Meanwhile, industries of all kinds are lining up for help. The total price tag is sure to grow beyond $1 trillion, lawmakers said.
Pelosi, on a lengthy conference call with more than 220 House Democrats, urged them to “think big,” according to people on the call granted anonymity to discuss it. She reminded them that interest rates are low and the outlay should be considered an investment
As Congress rushes to compile the rescue package, it also is considering its own way of doing business. Two lawmakers have now tested positive for the COVID-19 virus, others are self-isolating and the usually tradition-bound Congress faced calls to ease rules and allow remote voting. Pelosi tasked a top committee chairman to study potential changes in House procedures.
The Senate plans to remain in session this weekend. The House, which is on recess, won't be recalled until it's time to vote.
House Republicans, on their own private conference call, expressed concerns about boarding planes to return to Washington, according to Matt Sparks, a spokesman for Minority Leader Kevin McCarthy.
Trump has already signed into law a $100 billion-plus bill to boost testing for the coronavirus and guarantee paid sick leave for millions of workers hit by it. Earlier, Trump signed an initial $8.3 billion package from Congress.
For most people, the new coronavirus causes only mild or moderate symptoms, such as fever and cough. For some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia.
The vast majority of people recover from the new virus. According to the World Health Organization, people with mild illness recover in about two weeks, while those with more severe illness may take three to six weeks to recover.
Associated Press writers Darlene Superville, Matthew Daly, Mary Clare Jalonick, Ricardo Alonso-Zaldivar and Padmananda Rama in Washington contributed to this report.