Stimulus negotiations: Why leadership may have to step in

Senate Majority Leader Mitch McConnell summed it up on Monday: “We are down to the wire.”

If there is going to be a stimulus deal, if millions of Americans who depend on expanded unemployment benefits are going to continue getting that help, Congress has to come to an agreement and soon.

The sticking point: The issue for the bipartisan group is liability insurance. That’s why you didn’t see them unveil legislative text Monday, and it is why the group talked again into the night for several hours.

For months, including liability protection was standing in the way of the talks between House Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin, and it is still standing in the way of benefits for millions of Americans.

This is the item that Republicans are insisting on, not unlike how Democrats have been pushing for months to ensure state and local governments get another round of funding. Democrats know they don’t get state and local funding without finding a path forward on liability and Republicans know they don’t get liability without something for state and local.

Aides say the meeting Monday night was productive and it served as an opportunity for members to vent and lay out each party’s side of the liability issue. But there still isn’t a resolution.

As one aide told CNN, there are going to be bad days and good days in these talks and Monday was a bad day.

Negotiators just aren’t there yet.

Is it time to drop the fight over state and local and liability and move on?

It’s possible that if senators can’t find an agreement, the bipartisan group could decide to take out state and local and liability and move forward without them. Republican Sen. Mitt Romney of Utah told CNN that Monday night. McConnell on the floor Monday told Democrats that Congress does “not need to resolve every one of our differences to get badly needed relief out the door.”

“Drop the all-or-nothing tactics,” the Kentucky Republican said. “Drop the hostage-taking and make law in the many places where we have common ground.”

The big question is, could you actually get enough Democrats to vote for a package that did not include state and local funding? Most members I’ve asked about this have said they can’t agree to anything without it.

Where most lawmakers do agree:

• Funding for vaccine distribution
• Another round of Paycheck Protection Program loans for small businesses
• Funding for schools
• Continuation of long-term unemployment benefits so individuals can get the benefits for 39 weeks instead of just 26
• Extending the eviction moratorium

The other thing to watch: A lot of attention is being paid to the bipartisan group, which has started referring to itself as the “908 coalition.” The lawmakers deserve credit for changing the entire dynamic of these negotiations, and they are the most public about their efforts.

But, don’t think that leadership isn’t prepared to step in if this all falls apart. Leadership is still talking regularly about the path forward. McConnell, Pelosi and Senate Democratic Leader Chuck Schumer are being briefed by the bipartisan group. But, everyone is very aware about what is at stake.

By the end of December, there are a bunch of benefits that expire and leadership is having conversations about how to proceed even if the bipartisan group fails to come to an agreement. As CNN has previously reported, here’s a summary of benefits about to expire:

• Deferment on student loan payments
• Federal eviction moratorium
• Expansion of unemployment insurance for gig workers
• The increase in the number of weeks Americans can be on unemployment from 26 to 39
• Mortgage forbearance for some single-family homes
• Waived penalties for people who are suffering hardships and take money out of their 401(k) early.
• Expanded family and work leave for Americans dealing with the impacts of coronavirus
• $150 billion in federal money that state and local governments received from CARES has to be distributed by the end of December or governments have to return it to the feds.

Something everyone has agreed on

Despite working through the weekend, Republicans and Democrats agree that Congress needs more time to get a deal on the spending bill through next September.

On Wednesday, the House will vote to pass a one-week stopgap resolution with the hope that the extra few days can give negotiators the time they need. The Senate will pass it shortly after to avert the shutdown on December 11. Over the last several weeks, appropriators have tried to find common ground over dozens of outstanding issues from the border wall to abortion language, but while those talks have progressed, they just aren’t there yet.

Why not just do a continuing resolution for the year?

All a continuing resolution does is allow you to keep funding the government at the exact same levels it has been funded at all year. But things change, and money that once made sense in one bucket may no longer make sense there. That’s why Congress would prefer to have an omnibus, a massive bill that includes new funding levels for all 12 appropriations bills. That is not to say that a longer-term continuing resolution wouldn’t suffice if Congress really can’t come to an agreement by next Friday, but the preference is the omnibus.

A word about what the next few days will look like

Now that there is an extra week on the congressional calendar, some of the pressure might be off the bipartisan group to come up with a deal so quickly.

The reality is that the momentum visible last week was a direct result of pressure folks were feeling with the December 11 spending deadline. This stimulus package was always going to be attached to the long-term spending deal and with that deadline kicked off until December 18, there is more time. More time can be good in that it gives negotiators room to find a middle ground and in this case it gives a group of lawmakers who are operating without committees, time to write a bill. But, it can also backfire. Congress operates best and most efficiently when its back is against the wall. More time means that these talks can drag out, giving people more time to nitpick and change their minds.

The wildcard

It’s not clear where President Donald Trump is on these talks.

He’s signaled he’d like to sign a stimulus package that includes help for small businesses. Before the election, he encouraged Republicans to “go big.”

But, Trump has stayed out of these negotiations. And while he regularly talks to members, he has yet to get too engaged.

Trump spoke with Republican Sen. Josh Hawley of Missouri over the weekend. Hawley encouraged the President to veto any package that didn’t include stimulus checks to Americans. Hawley wouldn’t tell reporters Monday if Trump agreed with him, but it’s an example of the kind of conversations Trump is having.

The President has always been unpredictable, but that’s never been more true than in the waning days of his presidency when he has nothing left to lose.