White House team to meet House Democrats as talks for new coronavirus bill pick up

By David Morgan and Susan Cornwell

WASHINGTON (Reuters) – U.S. congressional negotiations aimed at hammering out an agreement on a new coronavirus aid package intensified on Tuesday as COVID-19 infections and deaths surged to record levels across the United States.

The Republican-led Senate, Democratic-controlled House of Representatives and the White House have less than two weeks to agree on a legislative package before assistance runs out for tens of millions of Americans made jobless by the coronavirus pandemic.

Negotiators, however, remained far apart over how much money to spend and which priorities to spend it on, as the United States leads the world with more than 3.8 million coronavirus cases and over 140,900 deaths.

Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows met with Senate Republicans at midday and were scheduled for a discussion with House Speaker Nancy Pelosi and Senate Democratic leader Chuck Schumer later in the afternoon.

Asked if a deal could be worked out by the end of the week, Pelosi replied with a laugh: “The end of the week? You mean the month. I’m hoping for the end of the month.”

Senate Majority Leader Mitch McConnell said Republicans would soon unveil a new coronavirus bill that is expected to have a $1 trillion price tag.

He said it would include $105 billion for schools; assistance for small businesses; direct payments to individuals and families; help for businesses to meet the cost of protecting employees and customers; money for vaccines, diagnostics and treatments; and liability protection for businesses, healthcare facilities, churches, charities and government agencies.

Democrats are proposing $175 billion to help elementary and secondary schools cope with the pandemic and have said they are determined to fight for provisions in a $3 trillion bill that passed the House in May and includes aid to state and local governments, extended unemployment insurance and protections for workers.

“An outcome will require bipartisan discussions. I do not believe there will be anything in our bill that our Democratic colleagues should not happily support,” McConnell said on the Senate floor.

Schumer called on Republicans to begin bipartisan negotiations now rather than first produce their own bill. “I urge all of my Republican colleagues to abandon their one-party, one-chamber approach before it’s too late and immediately begin bipartisan, bicameral negotiations,” he said.

President Donald Trump has called for a payroll tax cut to be included in legislation, a provision Meadows described on Tuesday as “a very high priority.” But Democrats, including House Majority Leader Steny Hoyer, said there was little enthusiasm for such a move.

Trump is seeking a payroll tax cut ahead of the November election and sees it as a major stimulus for the pandemic-stricken U.S. economy, according to the White House. Democrats have said such a move is unnecessary and could threaten Social Security benefits for the elderly.

(Reporting by David Morgan, Susan Cornwell and Richard Cowan; Editing by Scott Malone, Andrew Heavens, Jonathan Oatis and Dan Grebler)

Senate grapples with tax cut plan’s impact on federal deficit

Senate grapples with tax cut plan's impact on federal deficit

By David Morgan and Amanda Becker

WASHINGTON (Reuters) – U.S. Senate Republicans will grapple on Friday with the possibility of adding a tax increase to sweeping legislation meant to cut taxes on businesses and individuals, aiming to win support from fiscal conservatives worried about the bill’s impact on the federal deficit.

With a mandatory 20 hours of Senate debate nearing expiration, the Republican lawmakers, who control the chamber, could move to a final vote late in the day after a procedural vote starting at 11 a.m. EST (1600 GMT) and a potentially chaotic “vote-a-rama” on tax bill amendments offered by both Republicans and Democrats.

Republicans were still wrangling behind the scenes over how to raise $350 billion or more in taxes over 10 years to prevent their legislation from ballooning the federal deficit if the proposed cuts fail to generate the expected economic growth.

Senate Republican leader Mitch McConnell and others were also working on deals to win support from party members who want better tax breaks for non-corporate pass-through businesses, a bigger child tax credit for families, and a $10,000 deduction for state and local property taxes.

Despite the hurdles, rank-and-file Republicans were still optimistic that they could approve the bill this week and agree this month to final legislation with the House of Representatives, which their party also controls.

“This is the big enchilada,” said Senator Johnny Isakson of Georgia. “We’ve still got a chance to do something good, and I’m going to try and do it.”

Since taking office in January, President Donald Trump and the Republican-led Congress have passed no major legislation. Their bill would be the biggest overhaul of the U.S. tax system since the 1980s.

Success is crucial to Republican political prospects in the November 2018 elections, when the party will fight to keep control of the Senate and the House of Representatives.

But the effort stumbled on Thursday when Republicans acknowledged that Senate rules would not permit them to add a mechanism to trigger tax increases in coming years if the bill fails to boost the economy enough to generate sufficient revenues to pay for tax cuts.

Senator Bob Corker and other Republicans concerned about the deficit impact had demanded the trigger in exchange for their support. On Thursday, the nonpartisan Joint Committee on Taxation released a report saying the legislation would add $1 trillion to the deficit over the next 10 years, even with tax-driven economic growth projections factored in.

Republicans are now examining options that could raise taxes at a particular point over the next decade.

“We have an alternative, frankly a tax increase we don’t want to do, to try and address Senator Corker’s concerns,” said Senate Majority Whip John Cornyn, the chamber’s No. 2 Republican.

As drafted, the Senate bill would cut the U.S. corporate tax rate to 20 percent from 35 percent after a one-year delay and reduce the tax burden on businesses and individuals, while ending many tax breaks.

Analysts said lawmakers could scale back tax cuts for corporations and top individual earners.

Asked if lawmakers would have to accept smaller tax cuts, Senate Finance Committee Chairman Orrin Hatch said: “We’ll have to see.”

Early on Friday morning, Trump praised congressional Republicans’ work and blamed Democrats for trying to derail the bill, tweeting: “The Bill is getting better and better.”

Democrats have been united in their opposition to the bill, calling it a giveaway to the wealthy and corporations.

(Reporting by David Morgan and Amanda Becker; Additional reporting by Susan Heavey; Editing by Kevin Drawbaugh and Lisa Von Ahn)