Congress unlikely to pass a relief bill by the end of July


Senior House Democrats and Republicans both questioned on Tuesday whether Congress can pass a new coronavirus relief bill by the end of July – and save a key financial lifeline.”I imagine this bill will not be completed by the end of July,” parliamentary minority leader Kevin McCarthy, R-Calif., Told CNBC’s “Squawk Box.” He said he expects Congress to approve the legislation “probably in the first week of August”.

If lawmakers can’t pass a plan by the end of the month, a federal unemployment insurance benefit of $ 600 a week, supporting millions of Americans, will at least temporarily expire. The GOP wants to change the policy or reduce the sum, while the Democrats hope to expand aid as the unemployment rate is above 11%.

Lawmakers are working to iron out a series of differences over how best to structure the bill as the pandemic relentlessly spreads across the United States. Congress returned to Washington for discussions on the legislation this week as Covid-19 cases and deaths climb across the country, leading states, including McCarthy’s, to suspend or cancel plans for economic reopening .

In a call with House Democrats on Tuesday, House Speaker Nancy Pelosi said she hoped the parties “can resolve our differences and bring in a bill by the end of the week. next, ”according to a source over the phone. The end of next week is July 31, and Congress will still have to vote on the legislation even though it can draft the bill by the end of the month.

Minority House Leader Kevin McCarthy, R-Calif., Hosts a press conference at the Capitol Visitor Center where he answered questions from reporters working offsite due to the COVID-19 pandemic on Thursday, May 7 2020.Tom Williams | Appel CQ-Roll | Getty Images

Democrats have called for a sprawling program to offer extra help to unemployed workers, send another direct payment to individuals, offer a risk premium to essential workers, provide aid to state and local governments facing budget crises and offer assistance to tenants and landlords as moratoriums on evictions. and foreclosures begin to expire.

Republicans, meanwhile, spotted a hefty proposal for tax incentives or bonuses to encourage people to return to work and school, as well as broad liability protections for companies and doctors during the current pandemic.

After McCarthy and Senate Majority Leader Mitch McConnell, R-Ky., Met with President Donald Trump, Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows on Monday, talks will continue Tuesday. Mnuchin and Meadows plan to attend the Senate GOP political lunch and then meet with Pelosi and Senate Minority Leader Chuck Schumer later in the afternoon.

Before the Republicans can come to an agreement with the Democrats, they must first find a consensus within their own party. Trump has insisted on a tax holiday – a proposal generally met with skepticism on Capitol Hill – and opposed new federal funding for coronavirus testing, which GOP congressional leaders support.

Asked Monday whether payroll tax relief will be part of the final bill, McCarthy said, “I believe that will remain one of the elements of what we need to do. ”

Foreseeing a process that could turn particularly bitter in an election year, McCarthy argued the bill would not be passed until August because he expects Pelosi to delay it as she seeks to include her priorities in it.

In response, Pelosi spokesperson Drew Hammill said: “Nine weeks ago, the House acted on the Heroes Act – a strong package to deal with both the health and economic crises facing we are facing. We don’t need conferences from Republicans fighting among themselves to agree on a partisan package with their own White House. ”

The chamber passed a $ 3 trillion bailout package in May. Senate Republicans dismissed it as unrealistic.

Republicans have said they want to keep the price of the developing bill at around $ 1 trillion. Pelosi argued the spending would not be enough to alleviate a simmering health and economic crisis.

Perhaps the biggest problem to be tackled is the improved $ 600 unemployment benefit, which many economists attribute to increased household spending during business shutdowns. Republicans argue this deters people from returning to work because many individuals earn more at home than they would at their jobs. Senate Democrats have proposed tying aid to state unemployment rates, so that it is automatically reduced as states recover, but not wiped out when the economy is struggling.

Household support measures adopted in March as part of a $ 2 trillion bailout are widely popular. A CNBC / Change Research poll this month found that 81% of likely voters in six swing states of 2020 support a second direct payment of $ 1,200 to eligible people.

Additionally, a Morning Consult poll last month found that 75% of voters support keeping or increasing the amount of money workers receive who have lost their jobs due to the pandemic.

– CNBC’s Ylan Mui contributed to this report

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