Democrats and Republicans said they were closing in on a massive stimulus package to combat the economic impact of the coronavirus, although talks continued with no word of a deal by late Tuesday afternoon.
Multiple people familiar with the situation told CNBC that the two parties were still close to a deal, although they continued to work through the text and hash out final details. Two of the people cautioned that talks could spill into Wednesday morning.
One of the key issues yet to be resolved is the terms of airline aid, one of the people said. The nature of that dispute could not immediately be determined.
Most of the questions concerning funding for hospitals and education were resolved, a Democratic aide told CNBC.
House Speaker Nancy Pelosi, D-Calif., told CNBC on Tuesday morning that there is “real optimism” Congress can clinch a pact within a few hours. Senate Majority Leader Mitch McConnell, R-Ky., later said the bill is at the “five-yard line.” Later in the morning, Senate Minority Leader Chuck Schumer said they were even closer.
Optimism over the potential deal helped drive the Dow Jones Industrial Average up more than 11% Tuesday, notching its biggest one-day percentage gain since 1933.
Treasury Secretary Steven Mnuchin arrived at Capitol Hill just after 9 a.m. Tuesday for a new round of negotiations with Senate Minority Leader Chuck Schumer. The two met six times the day prior.
Just before 11:00 a.m., Mnuchin, Schumer and Rep. Mark Meadows, Trump’s incoming chief of staff held a meeting in Schumer’s office.
After the meeting, Schumer said on the Senate floor that negotiators were on the “two-yard line.” Issues can be resolved within hours, he added.
Schumer has said that the Democrats’ “two main issues: workers first and a ‘Marshall Plan’ for hospitals are very strongly in the bill.”
He listed a number of changes he said Democrats have secured, including obtaining “unemployment insurance on steroids,” which includes four months of unemployment for idled workers. The provision applies to workers who are gig economy workers, furloughed or freelancers, a Democratic aide told CNBC. The government will provide $600 on top of what the states offer in unemployment.
Democrats also appear on track to secure $25 billion more for hospitals, staff and equipment, a Democratic aide told CNBC, cautioning that terms may still change.
Still, Schumer implied that negotiations continue around the $500 billion fund that Republicans have proposed to support distressed companies. Democrats have argued the fund gives the Treasury too much discretion.
“We’ve been fighting very hard that any bailout fund − money to industries that have trouble − have real oversight and transparency,” Schumer said.
“We’ve been pushing hard that any contract the federal government makes with the company to give it loans, that we know of that contract in a very short period of time so that we can examine it ” he said. “Because we all know there was a load of dissatisfaction with TARP,” he added.
Democrats are pushing for an inspector general and congressional oversight board to oversee the fund. CNBC earlier reported that Mnuchin had agreed to more fund oversight.
Pelosi said Tuesday she was “very happy” it appeared the Senate had taken some of her suggestions on fund oversight.
Schumer also said Democrats were making “very good progress” in their efforts to add “incentive or mandate” for companies receiving federal loans or grants to keep their employees.
It remains unclear whether the government will demand equity of any of the companies it offers aid to, although lawmakers said the government has considered demanding warrants as part of its airline aid. There has been resistance to equity stakes, which dilute shareholders and give the government stronger oversight, lobbyists have told CNBC.
Boeing CEO David Calhoun told Fox News Tuesday that if Boeing “forces” an equity stake, then “we just look at all the other options. And we’ve got plenty of them.”
“It’s just not ideal for us, our suppliers, and all of those companies spread throughout the United States,” he added.
Trump has previously offered his support of the aerospace company, saying “we have to protect Boeing.” He has also said he would consider urging the government to take an equity stake in companies that have bought back stock.
According to NBC News, Senate Majority Whip John Thune, R-S.D., said the bill would include, among other items:
- Immediate $2,400 checks for married couples and $500 per child
- $350 billion for small businesses to set aside for payroll to keep people working
President Donald Trump had taken to Twitter earlier in the day to press for a deal. “Congress must approve the deal, without all of the nonsense, today,” he tweeted Tuesday morning. “The longer it takes, the harder it will be to start up our economy.”
U.S. Secretary of the Treasury Steven Mnuchin walks in a hallway at the U.S. Capitol March 23, 2020 in Washington, DC.
Alex Wong | Getty Images
Lawmakers are now considering providing at least some of the aid to airlines, among the hardest hit companies from the crisis, in the form of cash grants, according to a person familiar with the matter. A Senate aide cautioned, though, the terms are still being negotiated and could change.
Cash grants would be a victory for airline executives who were pleading with lawmakers to have half of the aid come in the form of cash grants, not just loans, which Republican senators had originally proposed. Labor leaders and executives have argued that saddling companies in debt through loans would make recovery even harder. U.S. airlines employ some 750,000 people.
Carriers have been racing to cut costs, grounding hundreds of planes and asking thousands of workers to take unpaid leave. Airlines are also tapping credit lines to shore up cash to weather the crisis, the impact of which they say is worse than 9/11.
U.S. airlines’ lobbying group, Airlines for America, said the industry would commit to not furlough employees through Aug. 31 if they received grants.
Some hurdles cleared
The Senate GOP’s bill failed to clear a key procedural hurdle Monday after a similar result Sunday. Republicans accused Democrats of causing unnecessary delay by focusing on issues outside the economic crisis facing the country, like giving more bargaining power to unions, increasing fuel emissions standards for airlines, and wind and solar tax credits.
Democrats, on the other hand, said Republicans had originally prioritized funding big business over protecting workers and communities.
Any deal the GOP-controlled Senate comes to ultimately needs to be passed by the Democratic-led House, too. Pelosi on Monday released her own $2.5 trillion proposal, which, while unlikely to become law, gave an indication of her priorities. The Democratic measure would add stringent restrictions to any company receiving federal aid, including worker representation on boards, and maintaining workforce levels and worker pay. It also called for $37 billion in grants for airline workers and $3 billion in grants to ground support and catering contractors. Hundreds of catering and airport concession workers have already been laid off.
It is possible Pelosi, who has been talking with Schumer, could push for more changes to the Senate bill before giving it the go-ahead.
Pelosi said Tuesday morning if the parties can compromise and have “unanimous consent” the bill can move quickly.
“If we don’t have unanimous consent,” she said, “my two options with my members is: we can call them back to vote to amend this bill, or to pass our own bill and then go to conference with that.”
She added: “The easiest way to do that is to put aside some of our concerns for day and get this done … but if it has poison pills in it, and they know certain things are a poison pill, then they don’t want unanimous consent.”
The bill in discussion has a price tag of well over $1 trillion, and could potentially hit $2 trillion. The effort has taken on urgency as hospitals, workers, people and companies have all pleaded they need cash quickly to cope with the crushing economic impact of the coronavirus.
CNBC’s Eamon Javers contributed to this report
This is a developing story. Check back for updates.