Details of White House-Senate Republican Tentative Agreement for COVID-19 V Package Emerge

Just before midnight on Wednesday, word leaked out about the details of a White House-Senate Republican tentative agreement on their opening offer for a COVID-19 V package. The measure was intended to be introduced as a single package Thursday, and reportedly combines previous measures like appropriations, various authorizations, direct spending and tax measures into one bill with multiple divisions. Formulas on programs augmented from previous COVID packages are proposed to be tweaked or adjusted significantly depending upon the program. But, after weeks of anticipation, the Senate GOP Leadership had to abandon its plans to release the bill text yesterday due to disagreements on policy with the Trump White House.

The crux of the disagreement is how to structure unemployment insurance, but many of the spending provisions have already been laid out in this outline detailing the White House and Senate Republicans’ agreement.

As was expected from various press reports, the package includes the following:

  • Direct payments to individuals (amount and formula TBD)
  • Enhanced unemployment benefits extended in some altered formula and transition from the extra $600/week that expires at the end of this month.
  • Paycheck Protection Program – the outline suggests there will be greater flexibility to the program and likely more money but its terms are not defined
  • Appropriations of slightly higher than $300 billion with >70% of that amount going programs in the Labor-HHS-Ed Subcommittee (the outline provides a useful list but no details generally)
  • Multiple health care provisions that model/extend those in previous COVID-19 measures
  • Tax provisions include the employee retention credit (enhanced), a tax deduction for employer COVID-19 related expenses and supplies.  No mention of a payroll tax cut.
  • Liability protections – an exclusive federal cause of action for COVID-19 related claims applying to a broad category of businesses and non-profits
  • Flexibility in the use of previous state and local government aid but no new funds for those entities (except for the various buckets of the appropriations title that gives $10 billion for Airport AIP and approximately 90+% of the $105 billion for education ($5 billion to the Governors; $29 billion to higher ed; and $70 billion to K-12).

Total projected cost of the package is reported to be in the $1 trillion range.

Though Democrats will not support this measure as it is now drafted for a range of reasons, it does suggest that negotiations will likely begin in earnest this weekend and into next week.  That process will be both difficult and likely protracted, such that a portion of the August recess for Congress will almost certainly be canceled.

It's also clear that Senate Republicans are not yet united on the package, as a number of the most conservative members of its caucus, who think the bill is too big and expensive, will withhold their support. Due to Thursday’s last minute delay, Senate Majority Leader Mitch McConnell (R-KY) will likely have to release his draft bill next week, which is far later than he had planned.

Hence, the path forward to another bipartisan measure that can pass both Houses of Congress and get the President’s signature nearly 100 days before an election is far from clear.