House Democrats are shaping a next phase of COVID-19 relief that could rival the size of the $2.2 trillion CARES Act but sharp division lines with Republican lawmakers are still being negotiated.
Democratic priorities in the next package include more aid for cash-strapped cities and states, more financial support for individual Americans and small businesses, money for election security and additional funds for health providers and hospitals. House Speaker Nancy Pelosi (D-CA) has said the centerpiece of the package being called CARES 2 will be up to $700 billion to help stabilize state and local governments. The hugely-in-demand Paycheck Protection Program (PPP), which was replenished in an interim package that Congress passed last week, is also already in need of more funding and Democrats have concerns about the ability of small businesses to access the funds.
Senate Majority Leader Mitch McConnell (R-KY) has said it’s not the job of Congress to bail out states that he says were mismanaged before the COVID-19 pandemic shut down the economy. McConnell also said that any deal to provide state and local aid should include liability protections to shield companies from lawsuits as they reopen.
Treasury Secretary Steven Mnuchin, who has been the chief negotiator for the White House on COVID relief, echoed that sentiment this week on CNBC. “This isn’t just going to be a federal bailout of the states,” Mnuchin said. “States that had specifically large expenses because of the coronavirus, like New York and New Jersey, it was the right thing that the federal government gave them money.”
Senate Minority Leader Chuck Schumer (D-NY) said that if Congress fails to assist states and cities in the next package it will have massive financial consequences for the country.
“There’s going to be massive layoffs at the state and local level unless we get them money quickly,” Schumer said.
Pelosi also shared some of her thinking on the PPP this week, bringing up the possible expansion of the types of businesses that can apply for PPP loans to include 501(c)(6) associations – as ASAE and other groups have advocated – and businesses with 1,000 employees instead of the current 500.
Lawmakers have been mostly absent from the Capitol in recent weeks, returning to vote on major legislation but not conducting routine business. But McConnell is calling the Senate back on Monday, May 4, despite the fact that much of the District of Columbia remains shut down to control the spread of the virus. House leaders were initially going to come back May 4 as well, but House Majority Leader Steny Hoyer (D-MD) reversed course earlier this week and said that the House will instead come back “very soon to pass the CARES 2 piece of legislation.”