House Democrats and White House close to deal on economic stimulus package amid outbreak

After a day of negotiations and partisan brinkmanship, House Democrats and Trump administration officials were close to a final agreement Thursday evening on an economic stimulus package to address the widening impact of the coronavirus on American workers and businesses.

The deal — being forged by House Speaker Nancy Pelosi (D-San Francisco) and Treasury Secretary Steven T. Mnuchin via frequent phone calls — is expected to eliminate insurance co-payments for COVID-19 testing and provide billions of dollars in aid to state and local governments for food programs and unemployment benefits.

It is also expected to include up to 14 days of sick pay for workers dealing with the coronavirus who don’t receive sick pay from their employers and up to three months’ leave for people who need to care for sick relatives.

“It’s fair to say we’re close to an agreement, subject to the exchange of paper,” Pelosi told reporters Thursday evening, adding that a vote on the measure would take place Friday, with or without a deal with the White House.

Pelosi suggested the final deal would be slimmer than the ambitious plan Democrats released Wednesday.

“We’ve resolved most of our differences, and those we haven’t, we’ll continue the conversation because there will obviously be other bills,” she said.

The plan also provides enhanced unemployment benefits, additional state Medicaid dollars and additional resources for food security programs, such as meals for students and seniors, according to a letter Pelosi issued to colleagues Thursday night. The administration agreed to end work requirements for food stamps in the Supplemental Nutrition Assistance Program, or SNAP, during the coronavirus crisis, Pelosi wrote.

Democrats originally proposed a permanent mandate that employers provide paid leave for all sick workers nationwide, plus an additional temporary measure to address the current need to allow sick workers to stay home. Republicans said the ideas were too broad and would take too long to implement, advocating for a narrower approach. The permanent program does not appear to be in the final agreement.

A proposal from President Trump to cut payroll taxes was not included, as both parties in Congress have panned it.

The bill’s future could be uncertain in the Senate, where Republicans blasted an earlier version. But it’s likely that if the administration signs off on the measure, the GOP-controlled chamber will approve it. Most senators went home on Thursday while talks were still underway.

Even if the House passes a bill Friday, the Senate is unlikely to do anything further until Monday at the earliest.

The starting point of the talks was a House-drafted bill that Republicans said was too expansive. They said it enacted a permanent paid sick leave program that would burden businesses.

Mnuchin, negotiating on behalf of the Trump administration with the backing of congressional Republicans, proposed tax credits for small- and mid-sized businesses to ease their burden for providing the time off, according to congressional sources.

Leaders in both parties felt pressure to act quickly as more companies sent workers home, schools closed, theaters went dark and sports venues canceled events to stem the spread of the virus. And the stock market continued to crater.

Earlier Thursday, Minority Leader Kevin McCarthy (R-Bakersfield) predicted that a deal could come together in a day or two. Pelosi said she was open to Republican changes, but suggested she wouldn’t delay the bill’s passage for that long.

“Everybody could have a complaint about this or that. I say, save it for another day,” Pelosi said. “Right now, we have to find our common ground, work together, to get this done as soon as possible.”

Senate Republicans have so far left negotiations to Pelosi and Mnuchin.

The House Democrats’ original proposal required employers to give workers up to seven days of paid sick leave based on their hours, with an additional 14 days during a public health crisis, such as the coronavirus outbreak. While all employers would have to cover the first seven days of sick pay, businesses with 50 or fewer employees could be reimbursed by the federal government for the additional 14 days.

The proposal would have represented a major expansion of paid leave in the U.S. Currently, only about a dozen states mandate paid sick leave. California in 2014 became the second state in the country to do so.

To address the short-term need while employers adjust to the new sick leave requirements, the original version also provided Social Security Administration funding for workers who don’t currently receive sick pay and need to stay home because they have the disease or need to care for someone who does. People would be eligible to receive benefits amounting to two-thirds of their monthly earnings, up to $4,000.

The original bill also provided $1 billion in emergency grants to states to process unemployment benefits and nearly $1 billion for food programs, including help for local food banks and additional funding for programs for pregnant women, children and seniors.

Republicans were critical of the Democrats’ proposal to require the Social Security Administration to administer a paid sick leave program, arguing that it would take six months to start distributing checks and hinder other Social Security work. They also don’t like the enactment of a mandatory paid sick leave requirement for all businesses.

“If we put out some new thing, it usually takes the government six months to 18 months to implement something,” said Sen. Martha McSally (R-Ariz.). “So let’s look at existing mechanisms and see how we can provide that relief in a way that’s supporting small businesses and families that are impacted right now.”

Republicans also had some demands of their own. They wanted to prohibit federal dollars in the bill from being used to cover most abortions, a provision unlikely to get support of Democrats. They also wanted to lift an Obamacare ban on the use of Health Savings Accounts for over-the-counter medicine purchases. And Republicans wanted to give manufacturers protection from liability to encourage the production of face masks, and to tap a disaster unemployment assistance fund.

McConnell trashed the bill Democrats wrote. “Instead of focusing on immediate relief to affected individuals, families and businesses, the House Democrats chose to wander into various areas of policy that are barely related, if at all, to the issue before us.” He called the bill a “needless thicket of new bureaucracy.”

Even as negotiations took place, Trump criticized Pelosi for resisting his proposal for a cut to payroll taxes. A payroll tax holiday has little support in either party, with Republicans considering it too expensive and Democrats saying that it doesn’t target relief at the workers most likely to be hurt if the economy slips into a recession.

And despite his call Wednesday night for an end to partisan bickering, Trump retweeted a days-old criticism of Senate Minority Leader Charles E. Schumer (D-N.Y.) for his controversial comments on the Supreme Court.

Times staff writer Chris Megerian contributed to this report.