McConnell Signals Bipartisan Relief Plan Won’t Get GOP Support

(Bloomberg) -- The attempt to draw up a pandemic relief package hit another roadblock Thursday as Senate Majority Leader Mitch McConnell’s top lieutenants said key portions of a compromise proposal from a bipartisan group of lawmakers isn’t likely to get backing from a majority of Republicans.

Senator John Thune, the chamber’s No. 2 Republican, said the group of Republican and Democratic senators trying to forge a compromise likely cannot produce a solution to limiting liability of employers in connection with Covid-19 infections that will satisfy Republicans. Democrats probably won’t like it either, he added.

“My sense is that they’re not going to get there on the liability language,” he said at the Capitol. “They’re just not going to be able to thread the needle.”

The bipartisan group on Thursday removed one of the last remaining hurdles to a complete stimulus framework when they agreed on a needs-based formula to distribute $160 billion in state and local aid, according to two congressional aides.

But they are still haggling over the liability shield for employers that Republicans have demanded as part of the package. The group is discussing an enhanced pause in Covid-19 lawsuits, combined with a process for developing a future liability standard in the future along with a standard that would apply now, according to a person familiar with the talks.

Federal Standard

The agreement on state and local aid could undermine a pitch by McConnell to drop both the aid issue and liability to seal a deal.

Senator John Cornyn of Texas, another member of McConnell’s team, said the bipartisan group’s approach on liability falls too far short of what Republican leaders want -- which is to ensure that lawsuits against employers are tried in federal and not state courts. The group has been weighing a short-term pause on lawsuits, which its members say would give states some time to write liability laws some time in 2021.

“The reason why we need a federal standard is because there will be inevitable cherry-picking and venue-shopping -- and then you start certifying class actions in those states that don’t have liability protection,” Cornyn said, adding that the gang’s ideas are too tilted toward plaintiff lawyers. “Basically, that will be the standard in the country.”

At a meeting of aides to all four top congressional leaders late Wednesday, members of McConnell’s staff delivered the same message, according to a senior Democrat familiar with the discussions. A spokesman for McConnell declined to comment.

Pressure Mounting

McConnell has suggested dropping the liability provisions in exchange for Democrats giving up on including aid to states and localities, an idea that House Speaker Nancy Pelosi and Senate Democratic Leader Chuck Schumer have rejected.

Congress has about a week to reach an agreement, write legislation and get it passed by the House and Senate to attach it to a broader government-funding bill expected by Dec. 18. Adding to the urgency, deaths in the U.S. from Covid-19 surpassed 3,000 a day for the first time, and a report Thursday showed an unexpected surge in weekly jobless claims, suggesting that widening business shutdowns amid are spurring fresh job losses.

McConnell and Republicans want to use a separate relief proposal made by Treasury Secretary Steven Mnuchin as the basis for any deal.

Mnuchin said the “majority” of provisions in his $916 billion relief plan are the same as the bipartisan plan, worth $908 billion. The Treasury chief’s plan includes $600 stimulus payments for individuals, and excludes $300 per week in supplemental unemployment benefits -- two key differences with the alternative. It also has what he termed “robust” liability protections for employers.

Partisan Jousting

Pelosi insists the best chances for a deal are the bipartisan Senate talks where a handful of rank-and-file Republicans are open to just a moratorium on liability lawsuits instead of the broader changes to the law that McConnell wants.

McConnell, speaking on the Senate floor Thursday, again accused Democrats of holding the relief bill, including widely backed aid to small businesses, “hostage.” And he reiterated that the liability shield is a critical need, saying 6,500 Covid-related lawsuits have already been filed.

“Our Democratic colleagues want to pretend they’re bravely fighting big corporations but they’re really bullying small business owners and college presidents who have been pleading for these protections for months,” McConnell said.

The 6,500 figure cited by McConnell corresponds with the raw number of lawsuits referencing Covid-19 in one major law firm’s tracking data that includes challenges to government stay-at-home orders, prisoners suing over conditions, landlord-tenant disputes, insurance coverage litigation and alleged breaches of contracts.

Schumer rejected any tie between the liability shield and the aid for states and localities. He said the state and local assistance has bipartisan backing while a liability provision is a GOP-only demand.

“If you want PPP so small businesses don’t lay off people, why wouldn’t you want state and local aid so governments don’t lay off people?,” Schumer said. “They are the same people who need to feed their families, pay their rent, pay their mortgage and get on with life.”

House Majority Leader Steny Hoyer said he is instructing members to return to the Capitol on Tuesday. “We’re just waiting to get an agreement that we can pass,” he said in an interview. “They don’t have an agreement today,”

Pelosi said she wants to get the relief package finished by next week, but suggested Congress could stay through the holidays if necessary. “We’ve been here after Christmas, you know,” she said.

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