Government Shutdown Looms, Covid Relief Bill Held Up by Republicans

The U.S. Congress looked increasingly unlikely on Friday to meet a deadline to agree on $900 billion in fresh COVID-19 aid and instead may pass a third stopgap spending bill to keep the government from shutting down at midnight.

After months of partisan finger-pointing and inaction, Republicans and Democrats have been negotiating intensely this week on what is expected to be the biggest package since spring to provide relief to a country struggling with a pandemic that is killing over 3,000 people a day.

With some support from Republican President Donald Trump, who leaves office on Jan. 20, they have reported progress. But enough differences remained that talks looked likely to stretch into the weekend. That would force Congress to pass a stopgap spending bill – known as a continuing resolution, or CR – to keep the government operating for a few days after current funding expires at midnight.

Congressional leaders plan to attach the COVID-19 aid to a $1.4 trillion funding bill to keep the government open through September 2021.

Republican Senate Majority Leader Mitch McConnell said talks were continuing and remained productive.

“I am even more optimistic now than I was last night that a bipartisan, bicameral framework for a major rescue package is close at hand,” McConnell said as he opened the chamber on Friday.

McConnell said the Senate would remain in session through the weekend if necessary to reach a deal.

The top congressional Democrats – House of Representatives Speaker Nancy Pelosi and Senate Democratic leader Chuck Schumer – had a series of telephone conversations with Trump’s Treasury secretary, Steven Mnuchin, until late on Thursday evening, Pelosi’s spokesman Drew Hammill wrote on Twitter.

“All three emphasized the urgency to reaching an immediate agreement and will exchange additional paper and resume conversations in the morning,” Hammill said.

Multiple lawmakers have floated the possibility the federal government would run out of money early Saturday morning if Congress cannot pass a CR in time. A CR would be impossible if some lawmakers object, and a few have said they will do so.

“I’m not going to allow a CR to go through until I know exactly what’s in the package,” Republican Senator Josh Hawley told reporters at the Capitol, saying he wanted “substantial” direct payments for Americans and was frustrated at the lack of information he had received from congressional leaders.

SHUTDOWN PRESSURE

The prospect of a government shutdown increased pressure to come up with a relief plan. An extended shutdown would force thousands of people out of work and disrupt services at a time of high unemployment and uncertainty about distribution of coronavirus vaccines.

The coronavirus legislation is expected to include onetime checks for most Americans of about $600 each, extended unemployment benefits of $300 per week, help for states distributing the vaccine, and assistance for small businesses struggling through the pandemic.

Members of Congress said they were being spurred to action by an alarming increase in hospitalizations and deaths due to the pandemic. The U.S. coronavirus death toll, now over 307,000, is by far the world’s highest and many Americans – who do not receive government aid that is automatic in many other nations – are at risk of homelessness or inability to feed their families.

Democratic President-elect Joe Biden has also said he wants COVID-19 relief for Americans passed now, promising to do more after he is sworn in on Jan. 20.

Republicans also have a wary eye on the impact inaction might have on a pair of Jan. 5 runoff elections in Georgia, which will determine whether their party maintains control of the Senate for the next two years or hands it over to Democrats.

Sticking points in the talks include differences over a Federal Reserve emergency lending program, how to handle eviction prevention, food aid for the poor, and reimbursements to local governments for expenses like personal protective equipment for schools.

Democrats say Republican Senator Pat Toomey is promoting a plan to rein in the Fed’s emergency lending authority in an effort to make it more difficult for Biden’s incoming Democratic-led administration to handle the COVID-19 crisis, with Trump talking about running for president again in 2024.

Toomey denies this, saying the lending authorities were expiring anyway.

Larry Kudlow, director of Trump’s National Economic Council, told reporters at the White House on Friday that the Trump administration is “strongly in support” of Toomey’s plan.

WASHINGTON (Reuters) – By Patricia Zengerle and Richard Cowan

(Additional reporting by Alex Alper and Susan Cornwell; Editing by Scott Malone, Jonathan Oatis and Rosalba O’Brien)