White House, GOP agree to virus testing but aid bill shifts

Senate Republicans and the White House reached tentative agreement late Wednesday for more testing funds in the next Covid-19 relief package, but deep disagreements over the scope of the $1 trillion in federal aid have forced a shift in strategy.

Facing a GOP revolt, Senate Majority Leader Mitch McConnell was preparing to roll out a “handful” of Covid-19 aid bills instead of a single package, according to a top lawmaker involved in the negotiations. The legislation is now expected as soon as Thursday.

“Very productive meeting,” Treasury Secretary Steven Mnuchin said while exiting a late session at the Capitol.

A key holdup remains President Donald Trump's push for a payroll tax cut, according to a Republican granted anonymity to discuss the private talks.

Hardly any GOP senators support the idea. Instead, McConnell and some Republicans prefer another round of direct $ 1,200 cash payments to Americans.

Mnuchin said the negotiators have agreed to an amount on direct payments, but declined to share details.

The rest of the legislation is taking shape even as key Senate Republicans are rejecting the overall rescue, which is almost certain to grow.

There will be no new money for cash-strapped states and cities, which are clamoring for funds, but they will be provided with additional flexibility to tap existing aid funds.

Republicans propose giving $105 billion to help schools reopen and $15 billion for child care centres to create safe environments for youngsters during the pandemic. The centerpiece of the GOP effort remains McConnell's liability shield to protect businesses, schools and others from Covid-related lawsuits. The bills will also include tax breaks for businesses to hire and retain workers, and to help shops and workplaces retool with new safety protocols.

Still unresolved is how to phase out the $600 weekly unemployment benefit boost that is expiring, starting Friday.

Republicans appear to be settling on $200 benefit that would ultimately be adjusted according to state jobless rates.

The breakthrough on testing money, though, was key after days of debate between Republicans and the White House, showing a potential shift in the administration's thinking about the importance of tracking the spread of the virus.

Republicans wanted $25 billion but the Trump administration said the $9 billion in unspent funds from a previous aid deal was sufficient.

The two sides settled on adding $16 billion to the unspent funds to reach $25 billion, senators said.

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Despite deep differences among Republicans, McConnell is trying to push forward with what he calls a “starting point” in negotiations with Democrats.

“I think what the leader has decided he wants to do is to have a handful of bills now instead of just one bill, so maybe that comes together,” Sen. Roy Blunt, R-Mo., told reporters at the Capitol.

Exasperated Democrats warned the GOP infighting with Trump is delaying needed relief to Americans during the crisis, with the US pandemic death toll climbing past 142,000.

With millions out of work and a potential wave of evictions ahead, the severity of the prolonged virus outbreak is testing Washington's ability to respond.

Schools are delaying fall openings, states are clamping down with new stay-home orders and the fallout is rippling through an economy teetering with high unemployment and business uncertainty.

A new AP-NORC poll shows very few Americans want full school sessions without restrictions in the fall.

“We're hopeful we'll be able to get there,” McConnell told reporters earlier Wednesday.

Pressure is mounting as the virus outbreak deepens, and a $600 weekly unemployment boost and a federal eviction moratorium come to an end starting Friday. But some GOP senators simply oppose big spending.

Also read: US House speaker Nancy Pelosi says Republican $1 trillion coronavirus aid proposal not enough

“I just don't see the need for it,” Sen. Ron Johnson, R-Wis., told reporters Wednesday.

Democrats, who already approved House Speaker Nancy Pelosi's more sweeping $3 trillion package two months ago, said time is running out for Trump and his GOP allies to act.

“We're still on the 20-yard line?” Senate Democratic Leader Chuck Schumer said, referring to White House comments. “Where have the Republicans been?”

The White House negotiators, Mnuchin and Mark Meadows, the president's acting chief of staff, arrived late at the Capitol. After a raucous meeting Tuesday, senators did not discuss the package at Wednesday's lunch.

Still, Meadows said other talks had progressed, pushing Republicans to “the 35-yard line.” As the Republicans battle over their priorities, Democrats warn they are wasting precious time.

“We are just days away from a housing crisis that could be prevented,” said Sen. Elizabeth Warren, D-Mass.

As Trump and his GOP allies are tangled over details, a stopgap measure may be needed to prevent the unemployment benefits from being shutoff.

“We cannot allow there to be a cliff in unemployment insurance given we're still at about 11 per cent unemployment,” said Sen. Rob Portman, R-Ohio.

Portman's bill to provide tax cuts to retool workplaces with safety features appears to be included. Another Republican, Sen. Joni Ernst of Iowa, has been pushing for child care funds.

Of the $105 billion for education, Republicans want propose $70 billion to help K-12 schools reopen, $30 billion for colleges and $5 billion for governors to allocate.

The Trump administration wanted school money linked to reopenings, but in McConnell's package the money for K-12 would likely be split between those that have in-person learning and those that don't.

Sen. Marco Rubio, R-Fla., said there will be another boost for small business lending in the Payroll Protection Program. “It's going to be big,” he said.

Mnuchin and Meadows made it clear during a private meeting Tuesday with Pelosi and Schumer that the White House was resisting Democratic proposals for new spending on virus testing, housing aid or money for cash-strapped states, according to a person granted anonymity to discuss the private talks.

Republicans said some $150 billion allotted previously to state governments is sufficient to avert sweeping layoffs, and they said more housing protections are not needed.

They also want a fresh round of mortgage and rental assistance and new federal health and safety requirements for workers.

Sen. Mitt Romney, R-Utah, who opposes direct checks in favor of more targeted aid, lamented the White House's handling of the crisis. “I don't think it's been a great example for the world to see,” he said. “We're still struggling.”

Congress approved a massive $2.2 trillion aid package in March, the biggest of its kind in US history. Pelosi pressed on, passing her $3 trillion House bill in May. McConnell at the time said he wanted to “pause” new spending.