Pelosi Plans Vote on Virus Response While Wait Goes On for Trump

(Bloomberg) -- House Speaker Nancy Pelosi is pressing ahead with plans to vote Thursday on a plan to help workers affected by the coronavirus outbreak as President Donald Trump’s promised detailed proposal has yet to materialize.

The Democratic bill would include emergency paid sick leave, enhanced unemployment benefits, and free coronavirus testing, a House aide said. It also would provide enhanced food aid for people affected by the outbreak, a House aide said.

The Senate is unlikely to act before Congress goes on a week-long break. Majority Leader Mitch McConnell said Tuesday that he was waiting to see the outcome of negotiations between the Trump administration and Pelosi.

Trump has suggested a payroll tax holiday through the election, but lawmakers of both parties have been cool to that. Senate Finance Chairman Chuck Grassley said a payroll tax holiday is on the table, but immediate action isn’t needed, while second-ranking House Democrat Steny Hoyer called the idea a “non-starter.”

Pelosi spoke by telephone Wednesday morning with Treasury Secretary Steven Mnuchin to discuss proposals for the legislation, her spokesman Drew Hammill said on Twitter. Pelosi and Mnuchin spoke again in the afternoon, Hammill said.

The spread of the coronavirus is squeezing the U.S. economy. Stocks have whipsawed this week, with the biggest rout since the financial crisis followed by the best rally in 15 months. Losses resumed Wednesday with the S&P 500 dropping 4.5%.

“We’re committed to making sure that we help out those who are most vulnerable in our society,” Hakeem Jeffries of New York, chairman of the House Democratic Caucus, told reporters.

“That will take the form of enhanced unemployment insurance, that will take the form of enhanced food security efforts,” Jeffries said. “That will take the form of making sure there is paid sick leave. And hopefully, we can find common ground with the administration.”

Stocks Whipsawed

Pelosi will go over the proposal with House Democrats at a meeting Wednesday afternoon, Jeffries said. Hoyer said the plan will be “costly,” in the billions of dollars. As an emergency measure, it will be added to the deficit instead of being paid for with new revenue or spending cuts, he said.

Other coronavirus-response measures are expected to be put forward later, possibly related to economic stimulus and infrastructure projects, one of the House aides said.

Amid the negotiations on relief measures, the head of the National Institute of Allergy and Infectious Diseases told a House committee that a vaccine for the novel coronavirus is still at least a year away and the outbreak is spreading.

“Bottom line: It’s going to get worse,” Anthony Fauci told the House Oversight and Reform Committee.

Payroll Tax Holiday

Neither the House nor Senate has any plans to cancel next week’s recess to act on a response to the coronavirus. Hoyer said he and top House Republican Kevin McCarthy agreed that going home was the best course of action because lawmakers need to consult with their constituents. Members could be called back to Washington if needed, Hoyer said.

Hoyer said that to avoid spreading the virus, House members aren’t shaking hands as usual, and the time limit for votes will be enforced more strictly to reduce the occasions when all members are in the chamber. Closing the Capitol to the public is “a step that we might need to take,” he said.

Senator John Cornyn of Texas, a member of McConnell’s leadership team, said he sees the Senate taking a two-part approach to addressing the outbreak, with the chamber possibly taking up a “consensus” package that could include free testing for the virus and paid sick leave shortly after the recess.

Bigger issues to boost the economy, such as more infrastructure spending or a possible payroll tax holiday, would have to come later after more discussion about the best approaches, he said.

“There are some things that are pretty easy and are fairly consensus items,” Cornyn said. “Obviously if we decide to do something bigger like an infrastructure package, that’s obviously going to take a little while to pull together.”

While Trump is pushing for a holiday from the payroll tax that funds Social Security, Cornyn said it’s not clear that it would go forward.

“Things like the payroll tax holiday is such a big-ticket item and it’s fraught with some uncertainty, not to mention the financial impact on Social Security,” he said. “I think that needs to be carefully thought through.”

Trump ‘Very Focused’

Grassley said the idea of a payroll tax holiday doesn’t now have bipartisan support and may not be necessary yet. It may be months before any tax cuts are considered, depending on the state of the economy.

“We don’t have a bad economy yet because of the virus but we could have,” the Iowa Republican said.

Senate Democratic leader Chuck Schumer said he’ll propose additional economic relief measures.

“We are just appalled that the administration has no plan,” Schumer said. “We believe the help should be targeted at the people and not corporations.”

He said the two-part plan would include paid sick leave, loan payment relief and emergency unemployment benefits, followed by a second part providing economic relief for small businesses.

Trump promised on Monday to deliver details of an economic package on Tuesday -- a surprise to his staff -- but has yet to provide it. He met with Senate Republicans on Tuesday to discuss ideas, including a possible payroll tax holiday, but offered no clear-cut plan.

Mnuchin said at the Capitol Wednesday that the administration is in constant contact with congressional leaders and Trump is “very focused” on a plan to mitigate the economic damage.

“It’s going to have many parts to this, the first part we are working on ASAP is making sure that we get benefits very quickly to small- and medium-sized businesses that are impacted,” Mnuchin said. Trump “is also very focused on a broader fiscal stimulus package and he’s looking at the payroll tax cut and we’ll look at other alternatives as well.”

Politically, a House vote on the bill this week is aimed at shifting the onus to act onto the Republican Senate and shielding vulnerable House Democrats from attacks by the president during the upcoming 12-day recess. On Tuesday, Trump attacked Pelosi for saying a bill may not be passed this week. He accused the Democratic majority of failing the public even though Trump has yet to present his own proposal.

--With assistance from Alexander Ruoff, Daniel Flatley, Saleha Mohsin and Emily Wilkins.

To contact the reporters on this story: Erik Wasson in Washington at ewasson@bloomberg.net;Billy House in Washington at bhouse5@bloomberg.net;Laura Litvan in Washington at llitvan@bloomberg.net

To contact the editor responsible for this story: Joe Sobczyk at jsobczyk@bloomberg.net

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