They are rushing to complete a deal because they must pass a new spending bill Friday night at midnight in order to avoid a government shutdown. House Democrats had sought a much larger stimulus package before the election but have softened their position since President-elect Biden’s victory in hopes of securing some immediate relief.
The inclusion of these direct payments comes as congressional leaders appeared likely to cut new aid for states and cities out of the bill, giving lawmakers more money to work with while keeping the total cost of the package under $1 trillion. Treasury Secretary Steven Mnuchin had proposed including $600 stimulus checks in the package last week, but Democrats opposed the measure then because the White House wanted to slash unemployment aid as well.
One person familiar with negotiations said the agreement would include “other avenues to deliver aid” to states, cities, territories, and tribes, but did not provide specifics.
Slashing aid for states and cities from the emerging deal would free up close to $160 billion in funds that could be used for the direct payments. Using this pool of money, lawmakers would be able to pay for stimulus checks that are roughly half the size of the $1,200 checks approved in March, or $600 per person. But discussions were ongoing on Capitol Hill about the exact size of the payments.
Lawmakers are also looking to add money to the bill that could be used for distributing coronavirus vaccines this year.
House Speaker Nancy Pelosi (D-Calif.) hosted hours of meetings on Tuesday with the three other most senior congressional leaders — Senate Majority Leader Mitch McConnell (R-Ky.), Senate Minority Leader Charles E. Schumer (D-N.Y.) and House Minority Leader Kevin McCarthy (R-Calif.). Negotiators have described those talks as productive.
With some exceptions, the package is likely to resemble the bipartisan legislation spearheaded by Sens. Mitt Romney (R-Utah) and Joe Manchin (D-W.Va.), in conjunction with other House and Senate moderates. That bill would devote hundreds of billions in aid to small businesses and unemployed Americans, along with tens of billions for education, transportation, and other critical needs.
The potential inclusion of stimulus checks comes after a bipartisan push from Sens. Josh Hawley (R-Mo.) and Bernie Sanders (I-Vt.), who threatened must-pass government spending legislation to ensure a vote on a second round of stimulus checks. President Trump has also pushed for another round of stimulus checks to be included in the final package, as have some left-leaning lawmakers in the House. Hawley lobbied the president directly for another round of stimulus checks to be included in the final legislation.
Some lawmakers have not prioritized approving another round of stimulus payments on the grounds that they also go to Americans who have not lost their jobs and do not need them. Manchin told Axios earlier this week that lawmakers had to compromise and that the unemployment benefits were significantly more important for helping those in distress due to the pandemic. “This is an emergency bill,” Manchin said.
Supporters of the stimulus checks have argued that they are also important because they also help the tens of millions of families suffering from reductions in pay and hours as well as job loss. Mnuchin has also argued that the stimulus checks are more efficient, given the well-documented challenges jobless Americans have faced with their state unemployment systems. But some studies of the first round of stimulus checks showed they had mixed results.
Lawmakers must reach an agreement on legislation with broad bipartisan support if they are to quickly approve a bill smoothly. They face a tight deadline to hammer out a final compromise, with unemployment benefits for as many as 12 million workers set to expire by the end of the year. Congress also has a Friday night deadline to pass legislation before a government shutdown.
McCarthy said late Tuesday evening that negotiations were going “really well.” McConnell cited “significant progress” in talks later Tuesday evening as well.