Congress Stalemate on Covid Liability Adds to Doubts on Relief
The U.S. Capitol building in Washington, D.C., U.S. (Photographer: Stefani Reynolds/Bloomberg)

Congress Stalemate on Covid Liability Adds to Doubts on Relief

The congressional impasse over how to shield employers from virus-related lawsuits in a U.S. pandemic-relief package deepened Friday as negotiations among a bipartisan group of lawmakers dragged on.

Lawmakers in both parties engaged in the talks say that they have completed detailed proposals on small business help, vaccine-distribution funding and other key areas but remain at loggerheads over the liability issue -- a top demand of Senate Majority Leader Mitch McConnell.

“We have an eight-month impasse around liability issues, and it’s proving to be extremely difficult to close it,” said Senator Chris Coons, a Delaware Democrat and a participant in the talks that could help shape a final deal.

Senate Republican leaders continued to call for a pared-back package that sets aside disputes over liability until next year, along with the Democratic demand for a substantial amount for state and local governments. Senator John Thune of South Dakota, the No. 2 Republican in that chamber, said early talks among congressional leaders and appropriators about attaching at least some pandemic relief to a year-end spending bill are “trending in the right direction” and work will continue in earnest next week.

While Republicans and Democrats have coalesced around a $900 billion figure for a stimulus package, there’s some risk that the partisan disputes over the two holdup issues could blow up a deal. However, top congressional leaders say a stimulus package remains a top priority before lawmakers leave for the year-end break.

McConnell on Friday again advocated for dropping the state aid and the liability provisions and proceeding with a smaller bill covering vast areas of consensus. Those include money for distributing vaccines, funding to enable schools to reopen and another round of help for small businesses under the Paycheck Protection Program.

He argued on the Senate floor Friday that some Democrat-leaning states, including California and Massachusetts, are seeing greater tax revenue than than projected, indicating they aren’t in desperate need of federal help.

Senate Minority Leader Chuck Schumer shot back minutes later, saying that a number of states are experiencing revenue shortfalls, including tourism-heavy ones like Florida, Nevada and Louisiana. He also continued to insist that state aid be divorced from liability protection in the relief talks. Democratic leaders have signaled they are open to a pause in lawsuits in exchange for $160 billion in state aid floated by the bipartisan group.

“To equate state and local aid -- money for policemen and firefighters, bus drivers, sanitation workers -- to complete corporate immunity is false equivalence,” Schumer said.

Despite the lingering disagreement, the Senate on Friday cleared the decks of other key legislation -- approving a massive annual defense bill and a stopgap measure that will continue to fund government operations until Dec. 18. That centers attention next week on a final omnibus spending package for the rest of the fiscal year. And the stimulus.

Leaders will have competing relief plans to weigh -- plus any ideas of their own they want to bring to the table. The bipartisan plan doesn’t have stimulus checks, while a $916 billion relief proposal by Treasury Secretary Steven Mnuchin provides $600 to individuals and children and leaves out $300 a week in supplemental jobless benefits.

Notably, GOP leaders have said little about Mnuchin’s plan since they agreed to support it earlier this week. Like the bipartisan plan, the administration’s approach also has $160 billion for aid to state and local authorities. Both packages include around $100 billion for education funding and an infusion for the PPP.

The liability protections for employers could be the toughest issue in leadership negotiations, unless Democrats agree with McConnell to leave that and state aid aside until after President-elect Joe Biden is inaugurated next year.

A key goal of Democrats is to keep actions under state law, and allow state legislatures time to further craft their own liability shields. Led by McConnell, Republicans want to ensure that lawsuits against employers are tried in federal and not state courts.

“The reason why we need a federal standard is because there will be inevitable cherry-picking and venue-shopping -- and then you start certifying class actions in those states that don’t have liability protection,” said Senator John Cornyn of Texas, a member of McConnell’s leadership team. “Basically, that will be the standard in the country.”

While Mnuchin has been on calls with lawmakers over the broader aid package, one player who hasn’t stepped up is President Donald Trump -- leaving the possibility he could use his influence over Senate Republicans to seal a deal. He also could, as he has in the past, make negotiations more difficult by changing his own demands as congressional leaders are trying to come together.

©2020 Bloomberg L.P.

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