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Senate Coronavirus Relief Package Faces Uphill Battle

Posted on Jul. 29, 2020

A day after releasing their long-awaited coronavirus relief package and its bevy of tax incentives, Senate Republicans were largely sidelined in negotiations over the next bill, as Trump administration officials and congressional Democrats huddled together on Capitol Hill.

The collection of Senate GOP bills, dubbed the Health, Economic Assistance, Liability Protection, and Schools (HEALS) Act and introduced July 28, would expand the employee retention tax credit and the Paycheck Protection Program, streamline tax obligations for traveling workers, and provide credits for domestic production of vital products.

Attacks from Democrats were expected, especially after Republicans proposed to cut unemployment insurance, but on July 29 even some Republican senators criticized the package for its cost and contents.

Sen. Ron Johnson, R-Wis., who previously said he wouldn’t back any more spending without a proper analysis of coronavirus relief legislation that has already been enacted, told reporters he wouldn’t vote for the HEALS Act. Other Republican senators, including Finance Committee member Patrick J. Toomey, R-Pa., questioned a provision that would give every individual making less than $75,000 a check even if they’re employed.

Echoing the concerns of Democrats, Sen. John Kennedy, R-La., was similarly dissatisfied with the plan to switch unemployment insurance over to wage replacement, telling reporters that states will struggle with the implementation of such a complicated system.

Senate Majority Leader Mitch McConnell, R-Ky., acknowledged the hard task ahead of finding common ground with Democrats, but he left negotiations up to White House Chief of Staff Mark Meadows and Treasury Secretary Steven Mnuchin.

Meanwhile, some House Democrats took aim at the version of the employee retention tax credit in the Republican legislation.

Nick Martin, a spokesman for Ways and Means Committee member Suzan DelBene, D-Wash., compared the expanded credit in the HEALS Act with the credit in the Health and Economic Recovery Omnibus Emergency Solutions Act (H.R. 6800), which the House passed more than two months ago.

“The House subsidized up to 80 percent of $15,000 per quarter in qualified wages. The Senate would cover 65 percent of $10,000 per quarter,” Martin said. “This will protect fewer than the nearly 60 million workers the HEROES Act is estimated to keep on payroll this year.”

Despite the differences, expansion of the credit has bicameral and bipartisan support and is expected to survive the negotiations process.

The same can’t be said so confidently of the temporary full deduction for business meal expenses proposed by Senate Finance member Tim Scott, R-S.C., which was roundly criticized by Senate Democrats as a giveaway to corporate executives.

Lawmakers might have problems just getting to the negotiating table after McConnell said that no bill will make it to the Senate floor without liability protections, which were included in the Senate package. House Speaker Nancy Pelosi, D-Calif., told reporters that her side doesn’t back such a provision because it favors large corporations.

“It wasn’t a good way for us to start the discussion this afternoon,” Pelosi said.

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