Coronavirus stimulus talks drag on after lawmakers said deal was close

Talks between Democrats and Republicans over a massive stimulus package to combat the economic impact of the coronavirus could stretch into Wednesday despite earlier assurances by lawmakers that a deal could be announced Tuesday.

Leaders in both parties had said earlier Tuesday that they were closing in on an agreement. Multiple people familiar with the situation told CNBC that they were still close to a deal, although talks continued as they worked through the text and hashed 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 the airline aid and oversight that comes with it, two of the people said. Democrats have pushed for a number of stipulations along with aid to the industry, including longterm bans on stock buybacks, limits on executive compensation, commitments not to furlough workers and board representation. 

Meantime, President Donald Trump stressed in a press conference Tuesday that the money the U.S. lends “will be coming back” to it. The airlines have pushed for half of their aid in grants, arguing debt from loans would be too onerous. 

One of the sources said there continued to be questions around oversight of the $500 billion fund that Republicans have proposed to support distressed companies. Treasury Secretary Steven Mnuchin has said the Federal Reserve could leverage the loans in the fund to offer up to $4 trillion in financing. The mechanics, though, are still in question, said the source.

Democrats, still angry over the leeway banks got in the 2008 bank bailout, have argued the fund gives the Treasury too much discretion. One option being considered is a weekly check-in with companies borrowing from the fund, the source said.

Still, House Speaker Nancy Pelosi, D-Calif., Senate Minority Leader Chuck Schumer and  National Economic Council Director Larry Kudlow all spoke optimistically about the fund Tuesday. They said there are plans to add more oversight to that fund, with the addition of an oversight board and an inspector general. 

“It will be completely transparent,” Kudlow said at a coronavirus task force briefing Tuesday at the White House. 

Schumer had earlier in the day indicated in a speech on the Senate floor the fund was a key focus for Democrats. 

Still, the two parties have worked already worked through a number of disagreements.

For the Democrats, that includes securing more funding for hospitals, and a state and local stimulus fund as part of their “Marshall Plan.” Schumer touted on the Senate floor unemployment insurance on steroids, which promised beneficiaries insurance for four months.

A draft bill from early Tuesday afternoon has had language stipulating a $350 billion fund for small businesses to mitigate layoffs and support payroll.

It also offered cash payments of up to $1,200 for individuals, $2,400 for married couples and $500 per child. Those amounts are reduced if an individual makes more than $75,000 or a couple makes more than $150,000.

President Donald Trump, describing the proposal as a $2 trillion package, said Tuesday that “we are working to pass the biggest and boldest financial relief package in American history.”

Article source: https://www.cnbc.com/2020/03/24/coronavirus-updates-congress-gets-closer-to-a-deal-on-massive-stimulus-bill.html