A coronavirus relief agreement in Congress appeared in doubt early Friday after new economic data showed a U.S. economy buckling under the pandemic’s weight.
On Thursday, Sen. Ron Johnson, R-Wisc., tried to unanimously pass an extension of the weekly enhanced federal unemployment insurance that would slash the benefit from $600 to $200 per week. Senate Minority Leader Chuck Schumer, D-N.Y., rejected it. The current $600 weekly federal unemployment benefit expires today.
Schumer then attempted to unanimously approve the $3 trillion rescue package House Democrats passed in May. That legislation also failed, leaving Congress no closer to breaking an impasse over how best to boost a health-care system and economy ravaged by the pandemic.
House Speaker Nancy Pelosi, D-Calif. held late-night talks with Schumer, Treasury Secretary Steve Mnuchin and White House chief of staff Mark Meadows, NBC News reported.
The talks apparently were unsuccessful. Late Thursday, Meadows tweeted: “Tonight, once again, the White House offered a temporary extension of needed unemployment assistance—which expires tomorrow. And again, Chuck Schumer and Nancy Pelosi said no.”
Democratic leaders and Trump administration officials left a meeting Wednesday saying they had not come close to bridging a gulf in their priorities for an aid package.
Congress is struggling to find common ground on coronavirus relief as statistics show an economy still experiencing damage from an outbreak spreading throughout the country. Initial jobless claims climbed to 1.43 million last week, rising for the second straight week. U.S. GDP also fell by a record 32.9% in the second quarter during the peak of pandemic-related shutdowns — an expected but still devastating plunge.
Congressional leaders are now tossing blame for the inevitable expiration of the $600 per week enhanced federal unemployment insurance. The policy ends after Friday, though states stopped paying out the extra benefit last week — leaving millions of Americans facing a sudden and sharp drop in income.
On Thursday morning, Senate Majority Leader Mitch McConnell accused Democrats of refusing to “engage” with the GOP after it released its coronavirus relief proposal on Monday. Republicans unveiled the plan more than two months after the House passed a rescue package, which Democrats considered their opening offer in the next round of aid discussions.
“Either our Democratic colleagues come to the table, or the American people won’t get the help they need,” McConnell, a Kentucky Republican, said on the Senate floor.
The sides will have to resolve differences on a range of issues, most notably the unemployment insurance extension. Democrats want to maintain the $600 per week jobless benefit, on top of what recipients get from states, into next year. Republicans want to cut it to $200 per week through September, then set it at 70% wage replacement.
Democrats have also criticized the lack of several other provisions in the GOP plan, including direct aid for state and local governments and funds for rent, mortgage and food assistance. They also oppose liability protections for businesses, doctors and schools, which McConnell has said will have to be in any bill he brings to the Senate floor.
On Thursday, Schumer said the lack of a Republican consensus on pandemic aid has hindered progress toward a deal. Multiple GOP senators have said a large share of the caucus does not support the legislation Republicans released this week.
“Our friends on the other side now are scrambling,” he said on the Senate floor.
As they moved closer to Friday’s deadline without a comprehensive deal, both President Donald Trump and Treasury Secretary Steven Mnuchin floated the possibility of passing a short-term deal to extend the unemployment insurance and a federal eviction moratorium on Wednesday.
Schumer and Pelosi have both shot down a temporary fix.
Even as the progress of talks looked bleak Thursday, Schumer said he believes the parties can still reach a deal.
“It’s never easy, it’s never painless, but it can be done,” he said.
—CNBC’s Terri Cullen contributed to this report.