(Bloomberg) -- U.S. Treasury Secretary Steven Mnuchin said Monday the next round of virus relief will center on getting children returning to schools and workers back into jobs.
Mnuchin, who likely will have a key role in negotiating a new stimulus bill with Democrats, spoke at a White House meeting with President Donald Trump and Senate Majority Leader Mitch McConnell to hammer out the Republican plan amid firm opposition from Democrats, who say the GOP is tilting aid toward businesses instead of people struggling with the expanding pandemic.
“The focus is kids and jobs,” Mnuchin told reporters without giving many details. Along with money still untapped from earlier rounds of stimulus, Republicans are “starting with another trillion dollars. We think that will make a big impact.”
House GOP leader Kevin McCarthy, who also was at the meeting, told reporters at the Capitol that the initial Republican proposal would include cutting the payroll tax. That’s been a central demand of Trump, even though some in his party have been cool to the idea and Democrats are opposed. It also will include another round of direct stimulus payments to individuals, he said.
The Republican plan to be drafted this week is already facing opposition from Democrats, whose votes will be needed to get any stimulus legislation through Congress.
McConnell’s support for shielding companies that reopen against coronavirus-related lawsuits could “grant legal immunity to negligent corporations, nursing homes or others,” Senate Democratic leader Chuck Schumer wrote in a letter to Democrats sent just before the White House meeting.
Schumer said Democrats must stick together, as they did when the last relief package passed in March.
“It was our unity against a partisan, Republican first draft that allowed for significant improvements to be made,” Schumer wrote. “I hope we will not have to repeat that process. But we will stand together again if we must.
While there is a big gulf between Republicans and Democrats, who want a $3.5 trillion package, there also are some divisions within the GOP.
Trump has been demanding a payroll tax cut as part of the package, something that GOP lawmakers haven’t embraced. The president reiterated on Monday that cutting or suspending the payroll tax -- which funds Social Security and Medicare -- is “very important” as an incentive for companies to hire back laid-off workers. The tax is paid by both employers and employees.
Another potential hurdle is that Mnuchin was balking over the weekend at a $25 billion initiative favored by Senate Republicans to help states with coronavirus testing and contact tracing, according to a person familiar with the negotiations.
McConnell has said he would begin negotiations with Democrats for a final measure once the Republican plan is complete. Mnuchin and White House Chief of Staff Mark Meadows will meet with GOP senators at their weekly luncheon on Tuesday and will begin reaching out to Democrats.
The liability limits that McConnell is advancing will be a contentious issue between the two parties. A draft of his plan would give federal courts, rather than state ones, jurisdiction over liability claims arising from coronavirus infections, according to a summary of the proposal.
Republicans also have so far not agreed on any additional aid for state and local governments, and are opposing Democratic proposals to keep supplemental payments for unemployment insurance at the $600 additional amount that was in the stimulus package passed in March. That extra support expires this month.
Mnuchin said the unemployment-insurance program needed a “technical fix.” McCarthy said the $600 supplemental payments were a disincentive to work because some people got more in unemployment benefits than they were making at their jobs. He said there are ways to make sure the benefits aren’t more than a worker’s wages.
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