GOP Senator Says Short Shutdown Possible: Congress Update
Stacks of 50 subject one dollar note sheets pass through a KBA-NotaSys SA large examining printing equipment machine. (Photographer: Andrew Harrer/Bloomberg)

GOP Senator Says Short Shutdown Possible: Congress Update

Congressional leaders are working through the final sticking points of a coronavirus relief deal, although the agreement probably won’t come together in time for both chambers to vote before Friday. The federal government could shut down briefly over the weekend if senators object to temporary funding while negotiations continue.

People briefed on the talks say the draft of the roughly $900 billion proposal includes $600 in payments for individuals, $300-per-week in supplemental unemployment insurance payments and aid for small businesses, as well as about $17 billion for airlines. But it omits aid to state and local governments and lawsuit liability protection, the two issues that stymied earlier attempts at an agreement.

Current hurdles include a Democratic request for federal funds match 100% of FEMA payouts for pandemic-related disasters, as well as the Republican demand to end the Federal Reserve’s emergency lending program by the end of the year. Talks are also hung up on whether the relief bill needs to extend an existing an eviction moratorium if it also includes adequate funds to help renters.

Senate Majority Leader Mitch McConnell, House Speaker Nancy Pelosi, Senate Democratic leader Chuck Schumer and House Republican leader Kevin McCarthy have been speaking through the week to resolve these final issues.

Leaders plan to attach the pandemic relief plan to a $1.4 trillion bill that would fund the federal government through the end of the fiscal year on Sept. 30. A stopgap funding meaure will be needed to avert a government shutdown if this legislation isn’t signed into law by Friday.

Other Developments:

GOP Senator Says Short Shutdown Possible (3:31 p.m.)

The U.S. Government is at risk of a partial shutdown over the weekend because of potential objections in the senate to a short-term funding extension, John Thune, the No. 2 Senate Republican, said.

Thune said some senators will object to Senate action to extend government funding while negotiations on a virus relief plan and a federal spending bill continue.

“Hopefully it’s not going to be something that would be all that harmful,” Thune said.

The current stopgap runs out Friday at midnight, at which point federal agencies would run out of funds for normal operations.

Republican Senate Appropriations Chairman Richard Shelby said he expects a short continuing resolution to provide temporary funding and avert a shutdown, giving both chambers time to vote on the final spending bill, combined with virus aid.

Democrats, GOP Already Disagree Over Future Aid (1:19 p.m.)

Republicans and Democrats are already sending different signals on the need for additional virus-related stimulus next year once the new Congress is seated and President-elect Joe Biden is in office.

Biden referred to the current stimulus negotiations as a “down payment” that will be revisited at the end of January, a sentiment echoed by his fellow Democrats.

Representative Don Beyer, a Virginia Democrat, said on Bloomberg TV that he “absolutely” expects the new Congress will need to come back for more stimulus next year. He pushed back on Republican warnings about the deficit.

“Lets make sure that we’re moving back towards full employment before we start thinking about reining in the deficit,” Beyer said.

Senator John Thune, a South Dakota Republican, said the chance for the Biden administration to ask Congress for more fiscal stimulus “probably depends on what happens in Georgia,” where two Jan. 5 runoff races will determine control of the Senate. Still, Thune said, it will take 60 votes to get anything through the Senate.

“If we address the critical needs right now, and things improve next year as the vaccine gets out there and the economy starts to pick up again, you know, then there’s maybe less of a need,” Thune said. -- Jarrell Dillard and Erik Wasson

Republicans Demand Aid Deal End Fed Facilities (12:24 p.m.)

Senator Pat Toomey, a Pennsylvania Republican, is pushing to include language in the coronavirus relief bill that would explicitly terminate the Federal Reserve’s emergency lending program by the end of the year, which would ultimately limit the incoming Biden administration’s flexibility in addressing the economic crisis.

The issue is holding up the relief talks and the timeline for stimulus to reach millions of jobless Americans, because it puts Republicans at odds with Democrats who want to keep the programs running. The Fed facilities program was created in the CARES Act, passed in March.

Toomey told reporters that his provision would “end these programs exactly as the statute intended to do and it would preclude the replication of them. So you wouldn’t be able to just create a carbon copy and call it a new one, and call it a different thing.”

The central bank lending programs were intended to prop up struggling small businesses, municipal governments and credit markets during the pandemic. Toomey has said that the programs were always intended to be short-lived.

Democrats have disagreed with his stance and said their reading of the law says the facilities can remain active until 2026. They have said Treasury Secretary Steven Mnuchin’s moves to end the program are designed to tie the hands of Janet Yellen, the choice of President-elect Joe Biden to lead the Treasury. -- Laura Litvan and Laura Davison

McConnell Says Weekend Work on Aid Is Likely (11:35 a.m.)

McConnell said bipartisan negotiators are nearing a deal for coronavirus relief, although weekend work is “highly likely.” He said any stopgap bill to fund the government past the Friday deadline while talks continue should be “for a very, very short period of time.”

”We’re going to stay right here, right here until we are finished, even if that means working through the weekend, which is highly likely,” McConnell said Thursday on the Senate floor.

He said congressional leaders are discussing the direct payments to individuals, which President Donald Trump and Treasury Secretary Steven Mnuchin want to include. The deal is also likely to include funds to distribute the vaccine, reopen schools and support small businesses, McConnell said.

“The outline that I have been discussing with Democratic leader Pelosi and Leader McCarthy would get another huge dose of bipartisan support out the door as fast as possible,” McConnell said.

Schumer said there are a few outstanding details that must be resolved, but “everyone wants to see this get done, and soon.”

“None of the remaining hurdles cannot be overcome,” Schumer said. “Everyone is committed to getting something done.” -- Laura Litvan

White House Sees Virus Aid Deal Within 48 Hours (11:03 a.m.)

President Donald Trump is optimistic that congressional leaders will reach an agreement on coronavirus relief within 48 hours, according to White House spokesman Ben Williamson.

“The President is adamant on delivering relief to workers, families and small businesses before the holidays,” Williamson said. “Conversations with Capitol Hill leaders are ongoing, and we’re optimistic we can reach an agreement within the next 24-48 hours.”

Trump earlier mentioned Congress’s virus relief negotiations in a tweet about vaccine distribution, saying “stimulus talks looking very good.”

One sticking point is a Republican drive to close down funding for emergency Federal Reserve lending facilities that was authorized in the CARES Act that was passed in March. Republican Senator John Thune of South Dakota told reporters on Capitol Hill that making sure “the door is shut” on the program is a priority for the GOP.

The current draft of the virus relief deal would rescind more than $400 billion for the program, but Republicans want to ensure it cannot be restarted using other funds. -- Josh Wingrove

Hoyer Hopes for Thursday Deal For Swift House Vote (9:16 a.m.)

House Majority Leader Steny Hoyer emphasized the urgency for a deal on Covid-19 relief and government funding on Thursday to put on the House floor as soon as possible.

“We need to get to an agreement,” Hoyer said Thursday on MSNBC’s “Morning Joe.” “I’m hopeful, and I talked to the speaker this morning and she thinks we’re making real progress.”

The Maryland Democrat described the need for nutritional assistance and said that was one of the provisions holding up the deal.

“It is long past the time we need to act,” Hoyer said. “Hopefully we will get to an agreement today, put it on the floor, pass it and give some relief in this crisis that our families, our businesses our individuals are facing.” -- Erik Wasson

Kaine Says Virus Aid Deal Almost Done (8:30 a.m.)

Democratic Senator Tim Kaine told MSNBC the agreement on a virus relief deal has basically been reached and legislative text is being put together now. He described the agreement as a good deal for a short period of time, with more needed in the new year.

In addition to the $600 payments for most individuals and supplemental unemployment insurance payments, the bill would extend benefits for gig workers and those who have exhausted 13 weeks of standard unemployment insurance benefits. States are planning to stop paying benefits in those programs after next week.

A few items held up the agreement on Wednesday, including a Democratic request to match 100% of Federal Emergency Management Agency payouts for the pandemic. Republicans are concerned the provision opens a back door to send $90 billion to state and local governments in the future.

With control of the Senate hinging on two Jan. 5 runoff races, McConnell told GOP senators on a private call Wednesday that passing the virus relief will help Republican Senators David Perdue and Kelly Loeffler, according to a person familiar with the conversation.

Democrats would gain control of the Senate if both Republicans lose. McConnell told the lawmakers that their Democratic opponents, Jon Ossoff and Raphael Warnock, have used the lack of a deal on aid, specifically on direct payments to individuals, in their campaign attacks.

Covid-Relief Plan Talks Down to Final Details (2:00 a.m.)

The principle negotiators on the deal for a pandemic relief bill said they continued to make progress as staff members hashed out details of legislation.

“We’re still close, and we’re going to get there,” McConnell said Wednesday night as he left the Capitol.

The House could move quickly toward a vote once the legislation is written. House Majority Leader Steny Hoyer, a Maryland Democrat, said the goal was a vote on Thursday but that it could slip to Friday.

That would create a tight timeline for the Senate, and it’s possible final passage might not come until the weekend. Because the relief package is being tied to legislation to fund government operations, that means Congress might have to pass another stopgap to avert a partial government shutdown after midnight Friday, when the current funding runs out.

McConnell warned Republican senators in a private call that they should be prepared to work through the weekend, according to a person familiar with the conversation.

Pelosi spokesman Drew Hammill tweeted that Pelosi and Schumer had spoken with Treasury Secretary Steven Mnuchin about 10:30 p.m. Wednesday night and that they’d speak again Thursday morning. -- Erik Wasson

©2020 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.