Coronavirus: US Congress sends $484bn ‘interim’ aid package to Trump’s desk, as future negotiations get murky

The bill, once signed into law, will provide additional assistance to small businesses and hospitals and establish a comprehensive national testing regime

The House passed a bill on Thursday worth nearly half a trillion dollars intended to help the US health system and economy weather damage from the coronavirus pandemic that has put tens of millions of Americans out of work and pushed many hospitals to the brink.

The economic relief bill will now head to Donald Trump’s desk, where the president is expected to sign it into law before the weekend.

The chamber also passed a highly contentious Democratic-crafted resolution to establish a new Select Committee on the Coronavirus Crisis, a panel that would have broad authority to oversee the government's pandemic response and assess the Trump administration’s preparedness and ongoing actions.

The $484bn price tag for the health and economic relief bill — which Congress has christened the “Paycheck Protection Program and Health Care Enhancement Act” and Democrats are calling only an “interim relief package” — represents more than 2 per cent of US GDP.

The bill, once signed into law, will provide additional assistance to small businesses and hospitals through programmes that received hundreds of billions of dollars in the $2.2trn economic stimulus package signed by Mr Trump in March known as the “CARES Act.”

The measure also establishes a new comprehensive national testing programme that the president has resisted, saying testing for coronavirus is up to the states.

But it does not include more money for state and local governments on the operational frontlines of the crisis, which could prove a massive obstacle in negotiations on any follow-up legislation after Senate Majority Leader Mitch McConnell indicated on Wednesday that Republicans want to tighten the purse strings on federal spending.

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Mr McConnell said the GOP is keen to avoid passing “bailouts” for states that had overstretched budgets before the health crisis, and even suggested some states should pursue bankruptcy instead of asking for more money from the federal government.

But lawmakers kicked that can down the road, opting pass the current bill and discuss the matter during coming negotiations about a larger coronavirus relief package.

‘Interim’ relief package

The bill shovels an additional $370bn to the Treasury Department to help small businesses via a slate of popular relief programmes that already ran through more than $350bn they got in the March CARES Act.

The interim package will send $310 billion in additional funding for small businesses through the Treasury Department’s Paycheck Protection Program (PPP) with $30bn set aside for “community development financial institutions” and other small community-based banks and credit unions that provide capital to “underbanked” communities whose small business owners are disproportionately minority, women, veteran, and rural.

House Speaker Nancy Pelosi wears a face covering as she arrives at the US Capitol during the coronavirus pandemic (Getty Images)

Treasury Secretary Steven Mnuchin this week said Trump administration officials expect the interim legislation’s allotment for the programme will be the “last tranche” of emergency funding needed to continue propping up small businesses. He did not explain how officials reached that assessment, however.

The PPP funding package also includes a $30bn earmark for mid-sized banks and credit unions to lend to businesses.

PPP loans are forgivable up to 100 per cent if businesses meet certain payroll retention thresholds.

The small business portion of the interim relief package also includes $50bn for the Small Business Association’s so-called emergency Economic Injury Disaster Loan (EIDL) programme and $10bn for SBA emergency disaster grants.

Separately, the bill allocates $75bn to hospitals and other health care systems that are in desperate need of more beds, manpower, personal protective equipment (PPE) such as masks, and other supplies.

It also includes $25bn on a comprehensive national testing program, funding that will be split down the middle, with half going to the feds and half to states and localities.

The Trump administration must issue follow-up reports to Congress on Covid-19 testing, cases, hospitalizations, and deaths.

Budding divisions

Overall, Congress has spent more than 12 per cent of GDP on coronavirus relief in just the last six weeks, leading to growing concerns among some Republicans about the national debt.

There are also budding divisions between and within both parties on follow-up legislation.

Several progressives lamented that the interim relief package passed on Thursday does not go far enough, while conservative deficit hawks said it goes too far.

Among the lawmakers who have stated their opposition to the bill are Kentucky Republican Senator Rand Paul, a libertarian, and New York Democratic Congresswoman Alexandria Ocasio-Cortez, a progressive.

Republicans in the hardline conservative House Freedom Caucus tried to file several amendments to the bill on Thursday but were blocked by House leaders from doing so.

Those measures included an amendment that would have nullified guardrails limiting small business loans to mostly cover payroll expenses, and two amendments that would have prevented federal funding for “contact tracing” programmes that help identify who has come in contact with people who have contracted coronavirus.

Conservatives have said “contact tracing” is an invasion of Americans’ privacy.

“We cannot and must not fund government surveillance of Americans — healthy or symptomatic,” said Freedom Caucus Chairman Andy Biggs, who voted against the bill on Thursday. “We cannot afford to relinquish the individual liberties that make America great.”

Meanwhile, numerous House progressives expressed increasing frustration this week that Democratic leadership folded on a number of key issues, including: more money for states to help secure elections and expand mail-in voting for November; an increase in food stamp benefits; and recurring direct payments of $2,000 to every American adult until the economy recovers.

Ms Ocasio-Cortez voted against the bill.

Coronavirus select committee

The House also voted on Thursday to ratify a new Select Committee on the Coronavirus Crisis, to be chaired by Majority Whip Jim Clyburn of South Carolina, a longtime Nancy Pelosi ally.

The committee will consist of seven Democrats and five Republicans and will have broad oversight power not only on how federal dollars are being spent to battle the pandemic, but also to assess the government’s "preparedness for and response to the coronavirus crisis,” according to the legislation.

The resolution text grants the committee the authority to probe "executive branch policies, deliberations, decisions, activities, internal and external communications related to the coronavirus crisis” and “any other issues” related to the pandemic.

Ms Pelosi has insisted the new committee would be bipartisan, but such broad authority for the panel plays into Republicans’ fears that Democrats will use the panel to bludgeon the Trump administration during a presidential election year.

House Minority Leader Kevin McCarthy panned the committee as “pure politics” on Thursday.

On Wednesday, he said he would wait to appoint GOP members to the committee until Ms Pelosi selects her Democratic members to “see … if she is serious about making this a committee that works.”

Ms Pelosi indicated in a speech on the floor on Thursday that the primary goal of the committee would be to “root out waste, fraud, and abuse.”

“It will be laser-focused on ensuring that taxpayer money goes to workers' paychecks and benefits, and it will ensure the federal response is based on the best possible science and guided by health experts and that the money invested is not being exploited by profiteers and price gougers,” the speaker said.

The resolution forming the committee passed on a party-line 212-182 vote.