Doomed-to-fail Senate vote will usher final scene on stimulus

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WASHINGTON (BLOOMBERG) – The US Senate is poised to vote on Thursday (Sept 10) on whether to advance a slimmed-down Republican-crafted pandemic relief Bill, opening what’s likely to be the final stage of the months-long partisan battle over fiscal stimulus.

Democrats say they have the votes to block a narrowly tailored Bill introduced by Majority Leader Mitch McConnell from even reaching the floor.

Once that happens, it isn’t clear whether negotiations might resume, or if lawmakers will leave Washington to wage their November election campaigns without approving a fresh dollop of aid to businesses and workers hurt by the Covid-19 crisis.

Mr McConnell on Wednesday (Sept 9) expressed doubt Democrats want any deal, telling reporters they appear more interested in taking their case for a big-ticket relief package to voters.

Senate Minority Leader Chuck Schumer was more optimistic, saying Republicans are under growing political pressure to get a deal and seeing signs the Trump administration is more open to compromise.

“If it’s defeated, there’s a decent chance they will come back to the table and we get a better Bill,” Mr Schumer told reporters on Wednesday. “That’s what we’re hoping for.”

For now, though, senators in both parties are hardening their positions.

PARTISAN VOTING

Almost all Republicans are expected to vote to advance the McConnell Bill, which features some of the aspects of a US$1 trillion (S$1.36 trillion) GOP proposal that many in the party baulked at a month ago.

It’s expected to cost US$500 billion to US$700 billion, with some of that covered by unspent funds allocated to support US Federal Reserve facilities.

The so-called skinny Bill – far less than the US$2.2 trillion relief that Democrats want – restores supplemental jobless benefits and extends small-business aid, but doesn’t include comprehensive state and local aid, or another round of stimulus checks for individuals.

Mr Schumer and House Speaker Nancy Pelosi have dismissed the Republican Bill as a “check-the-box” effort to give endangered incumbents cover in the November elections.

Democrats can block it from debate on the Senate floor because it needs the support of 60 members to advance under filibuster rules. Republicans hold a narrow 53-47 majority.

“It’s a cynical exercise,” Mr Schumer said of the Republicans trying to pass a package without bipartisan backing.

“They’re even lower than what President Trump has said he would do,” he said of the Senate Republicans and their price tag.

The pared-back proposal, released on Tuesday afternoon, provides a US$300 per week unemployment benefit enhancement, US$105 billion for schools, a US$10 billion grant to the US Postal Service, US$258 billion for the Paycheck Protection Programme for small businesses, US$47 billion for vaccines and testing needs, and liability protections for employers.

PLANES, TRAINS

Absent from the Bill: additional help for airlines, which face a wave of job cuts when support runs out from the US$2.2 trillion CARES Act, the last big stimulus package.

Underscoring the economy’s continued strains thanks to the pandemic, Mr Bill Flynn, Amtrak’s chief executive officer, warned on Wednesday about the impact of expiring CARES aid.

Mr Flynn said the passenger rail network needs US$2.84 billion in additional funding by Oct 1 to avoid dismissals and service cuts.

‘POISON PILL’

Besides the size, Democrats have slammed the Bill for “poison pill” provisions that include lawsuit protections for businesses that reopen and a tax break for paying for private-school costs.

Mr McConnell this week made the case for his skinny Bill, saying it focuses on issues both sides agree on, including the continued help for small businesses provided under the Paycheck Protection Programme created in the CARES Act.

The White House and congressional Democrats have been more than US$1 trillion apart on the stimulus since negotiations broke off on Aug 7.

Democrats lowered their demand from US$3.4 trillion that passed the House in May to US$2.2 trillion, but haven’t budged beyond that.

Mr Schumer said on Wednesday he saw some potential signs of openness in the Trump administration to a bigger package than the US$1 trillion it previously endorsed.

He pointed to remarks last week by Treasury Secretary Steven Mnuchin at a House hearing.

Mr Mnuchin said on Sept 1 that “whether it’s US$1 trillion or US$1.5 trillion – again, let’s not get caught on a number. Let’s agree on things. We can move forward on a bipartisan basis now.”

“If they come back and meet us in the middle, we’ll be eager to talk to them,” Mr Schumer said on Wednesday.

Even so, Mr Mnuchin and Ms Pelosi were unable to bridge their gap in a telephone call after that hearing last week.

In a statement last Tuesday night, Ms Pelosi said she told Mr Mnuchin that Democrats had “serious questions” remaining in any negotiations.

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