Senate Majority Leader Mitch McConnell asked several top Republicans to meet with Democrats and Trump administration officials to finalize a stimulus agreement.
Photo: Susan Walsh/Associated PressWASHINGTON—Senate Majority Leader Mitch McConnell (R., Ky.) on Thursday introduced a stimulus package responding to the coronavirus crisis, proposing direct cash payments to many Americans as part of a larger plan also designed to help struggling businesses and health-care professionals.
The Trump administration has lobbied extensively for the stimulus package, which could top $1 trillion, to include direct payments. Mr. McConnell’s opening proposal will likely undergo changes in negotiations with Democrats in the House and Senate, and already faced criticism from some fellow Republicans over the structuring of the cash payments.
The plan Mr. McConnell introduced calls for taxpayers to receive up to $1,200, with married couples eligible to receive as much as $2,400 with an additional $500 for every child. Those payments will scale down for individuals who make more than $75,000 and couples that make more than $150,000. Individuals who make more than $99,000 and households that earn more than $198,000 won’t be eligible for direct assistance.
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Under the proposal—a broad, wide-ranging plan that touches many sectors of the U.S. economy—the government will provide $50 billion in loan guarantees for passenger air carriers, $8 billion for cargo air carriers and $150 billion for other large businesses, authorizing the government to take equity stakes in them. The proposal also includes $300 billion for loan guarantees for small businesses.
“This legislation takes bold action on four major priorities that are extremely urgent and very necessary,” Mr. McConnell said on the Senate floor. “I look forward to working with our Democratic colleagues and the administration to complete this important work and deliver for our country.”
Mr. McConnell asked several top Republicans to meet with Democrats and Trump administration officials on Friday, including Treasury Secretary Steven Mnuchin, to finalize an agreement. Senators are racing to pass a bill by the beginning of next week, preparing to work through the weekend to reach a deal.
Senate Minority Leader Chuck Schumer (D., N.Y.), who has spoken several times with Mr. Mnuchin in recent days, said Thursday the stimulus package must include a strengthened form of unemployment insurance for Americans who have lost their jobs because of the pandemic. Mr. Schumer and House Speaker Nancy Pelosi (D., Calif.) released a joint statement Thursday evening laying out their priorities for the bill, which includes investing in health-care infrastructure and assisting workers.
“That means taking bold action to help workers and small businesses first by greatly increasing unemployment insurance and Medicaid, making massive investments to help small businesses survive, expanding paid sick and family leave, and putting money directly into the hands of those who need it most,” the top Democrats on Capitol Hill wrote.
In a letter to congressional leaders, the heads of the National Governors Association asked lawmakers to provide an increase in Medicaid support twice as large as currently being considered.
The letter from Gov. Larry Hogan of Maryland, a Republican, and Gov. Andrew Cuomo of New York, a Democrat, noted that current legislation proposes an increase of 6 percentage points in the federal reimbursement rate, or the Federal Medical Assistance Percentage, to states. “However,” the governors wrote, “this falls short of what states will need.” The letter asks for an increase of least 12 percentage points, with a provision for an “automatic and more robust increase.”
Mr. Schumer and Mrs. Pelosi added in a later statement that the Senate Republican plan “is not at all pro-worker and instead puts corporations way ahead of workers.”
“The Senate proposal is a strong starting point for the administration, and we look forward to serious bipartisan discussions to ensure Congress will quickly deliver strong results that further protect the economic health of the American people,” said White House Legislative Affairs Director Eric Ueland.
Beyond the direct payments to individuals, the Republican proposal would relax a host of tax deadlines. Individuals wouldn’t have to file their 2019 tax returns until July 15, and individuals and corporations could avoid estimated tax payments until Oct. 15. In addition, employers could defer payroll tax payments until 2021 and 2022.
For businesses, the plan would relax the tax treatment of losses that Congress passed in 2017 and let companies carry back losses to offset against five years of prior profits. That could let companies claim quick refunds to get cash. Republicans also want to relax limits on interest deductions and fix several technical mistakes that were in the 2017 tax code overhaul. The biggest is one that requires many restaurants and retailers to depreciate renovation costs over 39 years instead of deducting them immediately.
The negotiations will also need to bridge divisions in GOP ranks. Senate Republicans concluded a closed-door lunch Thursday without agreeing on specifics on the legislation, including over the size, frequency, and method for distributing direct cash payments to Americans.
“What I want is income,” said Sen. Lindsey Graham (R., S.C.) “Not one check, I want you to get a check you can count on every week.”
The legislation Mr. McConnell outlined provides for low-income Americans who paid no income taxes in 2018 to receive $600 if they earned $2,500 in qualifying income. That’s half the $1,200 that middle-income adults would receive.
“Relief to families in this emergency shouldn’t be regressive,” Sen. Josh Hawley (R., Mo.) tweeted after the text was released. “Lower-income families shouldn’t be penalized.” Mr. Hawley said the bill had to be fixed.
Several Republicans said they favored expanding unemployment payments to Americans who lose their job during the pandemic, while still others said the government should lend enough money to small businesses so that Americans can stay on payrolls throughout the crisis.
“There’s some disagreement on direct payment checks, versus unemployment insurance, versus what a good lending program would look like,” said Sen. Kevin Cramer (R., N.D.).
On education, the Republican plan would allow the Secretary of Education to defer student loan payments for three months without a penalty. Students who dropped out of school this semester wouldn’t be required to return Pell grant money or student loan money they were already issued for the term.
The GOP plan would also relax restrictions on telehealth, expand flexible spending accounts to pay for over-the-counter prescriptions, and boost Medicare reimbursements for providers.
In a suggestion likely to anger Democrats, Republicans are seeking to roll back the Affordable Care Act employer coverage mandate, which requires employers with 50 or more full-time workers to offer health insurance or pay a penalty, saying it would provide relief for some businesses like grocers that may need to temporarily increase staffing.
Democrats are also grappling with what kind of financial assistance to offer to Americans who are no longer working because of the disease’s spread.
House Democrats don’t have a consensus around direct payments to Americans, though several ideas are out there, according to several people familiar with the discussions. Mrs. Pelosi supports direct assistance to those who need it most; she didn’t set a threshold. She told lawmakers on a call with the Democratic caucus Thursday that she wants the legislation targeted at helping workers and not corporate executives.
Many House Demoratic lawmakers are pushing for different plans. For example: House Financial Services Committee Chairman Maxine Waters (D., Calif.) wants to give American adults at least $2,000 and $1,000 for every child for each month of the crisis. As lawmakers discussed the payments on Thursday, some pointed out that dollars go further in some regions of the country than others.
In a Congress typically beset by partisan polarization and legislative gridlock, lawmakers have advanced legislation with unusual speed, passing an initial $8.3 billion bill that included funding for vaccine development and then subsequent legislation providing for paid leave that is estimated to cost more than $100 billion.
—Andrew Restuccia, Natalie Andrews and Gerald F. Seib contributed to this article.
Write to Andrew Duehren at andrew.duehren@wsj.com , Siobhan Hughes at siobhan.hughes@wsj.com and Lindsay Wise at lindsay.wise@wsj.com
Corrections & Amplifications
Maryland Gov. Larry Hogan and New York Gov. Andrew Cuomo noted that current legislation proposes an increase of 6 percentage points in the federal reimbursement rate, and asked for an increase of least 12 percentage points. An earlier version of this article misstated the figures as percentages. (March 20)
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