Every December, as Congress is wrangling over an omnibus appropriations bill, expiring tax provisions, or some other must-pass legislation, comparisons of party leaders to Dr. Seuss’s Grinch who stole Christmas are common. Over the years, these political attacks have lost some of their power to sway the public. But this year – in the midst of a pandemic and with millions of Americans on the verge of losing unemployment benefits and facing possible evictions – coupled with a potential government shutdown, both Democratic and Republican congressional leadership really really want to avoid being tagged with that label and the blame that it would bring. As a former top Senate budget committee aide, quoted regarding the ongoing negotiations over a government funding and stimulus package recently said, “[N]obody wants to be the Grinch that stole Christmas this year. They’ll get it done this week.”
That note of optimism is a welcome sign to many who have been arguing for additional federal action to address the economic damage inflicted by the coronavirus pandemic. There has been widespread bipartisan agreement on major elements of a bill, including a continuation of the Paycheck Protection Program (PPP) with modifications to improve program performance, a continuation of some level of bonus unemployment assistance, funding for schools and hospitals to deal with COVID-related increases in expenses, and federal funding to help in vaccine distribution. But substantive policy disagreement over two issues – increased federal spending to help states and localities (opposed by Republicans) and liability protections for businesses operating in accordance with local coronavirus-related guidelines and mandates (opposed by Democrats) derailed the effort to reach an agreement that would pass both the House and the Senate.
Instead, Congressional leaders have been publicly posturing on competing approaches, with little real effort to compromise on some of these more contentious issues, characterizing them as respective “lines in the sand” for each party. Early in the fight, the House Democrats passed a $3.5 trillion bill which critics called a funding wish list with no chance to be taken seriously by a Republican-controlled Senate. For their part, Senate Republicans put forth a much smaller “skinny bill” that Democrats immediately derided as an “emaciated bill” inadequate for the situation.
Apart from the substantive disagreements over state aid and liability protections, the political incentives to compromises were simply not there. House Democratic leadership, believing they were on their way to gaining seats in the House, and not wanting to give President Donald Trump a legislative victory before the election, were in no mood to give up on their demands. Republican Senate leadership could not green-light a bill with the level of spending demanded by Democrats amid growing concerns of Republican voters regarding the level of federal debt already incurred as a result of prior stimulus legislation. Neither party wanted to dampen the enthusiasm of their supporters who were most likely to turn out to vote.
But the changed outlook for legislation this week show that two things remain a constant in Washington: deadlines force Congressional action, and people who say their feet are set in concrete on an issue often find, Ronald Reagan once said, that the concrete is “cracking around their feet.” Having last week passed a short-term extension of current funding that avoided a government shutdown, Congress gave themselves until the end of the day on Friday, Dec. 18, to pass an omnibus appropriations measure, which would also serve as the vehicle for additional coronavirus relief. Without it, approximately 12 million Americans would lose their unemployment benefits the day after Christmas. Estimates of households facing possible eviction from their homes in January ranged as 5 million if temporary eviction moratoriums were not extended. A disappointing jobs report early in the week underscored the reality that the economic recovery remained weak.
After the election, the effort to break the logjam was given a push by a bipartisan group that worked outside the House and Senate leadership structure. The group, led by Senators Joe Manchin III (D-W.Va.), Susan Collins (R-Maine), Mark R. Warner (D-Va.), Mitt Romney (R-Utah) and Lisa Murkowski (R-Alaska), unveiled details of their coronavirus relief package early in the week, providing $748 billion of education, unemployment benefits, vaccine distribution and other funds. Failing to resolve the lingering disagreements over additional aid to the states and liability protections for businesses, the group agreed to separate these two contentious issues onto a separate bill, costing approximately $160 billion.
Senate Republic leaders, who had insisted no bill would pass without liability protections, and House Democratic leadership, which had insisted that state and local aid be included in any bill, took the opportunity to soften their stances. House Majority Leader Steny Hoyer (D-Md.) suggested on Sunday that Democrats could support legislation leaving out state and local aid, and Senate Democratic Whip Dick Durbin said on Monday that he would supported the $748 billion package. McConnell in several statements to reporters emphasized that both sides were close to a deal that he believed could get passed.
Negotiations between House and Senate leadership went late Tuesday night, and as of Wednesday there was no legislative text that had been agreed upon by both sides. However, reports were that the House and Senate leaders had agreed on the parameters of the legislation. On Wednesday, Senator Steve Daines (R-MT) confirmed that the emerging coronavirus economic response agreement amounted to approximately $900 billion, with approximately $300 billion for relief to small businesses, money for vaccine distribution and health care workers, and additional tax rebates to households. The plan would exclude two most contentious issues, and would be combined with a $1.4 trillion omnibus appropriations bill, all of which would have to be passed before Friday’s deadline unless Congress provided another extension.
Aquiles Suarez is Senior Vice President for Government Affairs at NAIOP.