Pelosi and Mnuchin fail to reach deal on coronavirus aid package

Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin came up short of agreement Thursday night on a sweeping aid package for Americans affected by the coronavirus, although the two sides hope to reach a deal by Friday morning.

"We have, or are near, to an agreement, subject to the exchange of paper. We hope to have an announcement tomorrow," Pelosi told reporters following a Democratic leadership meeting.

“We’re close to a deal. Obviously, it takes time to write it up, make sure it’s right, make sure it’s comfortable,” added House Majority Leader Steny Hoyer in a brief interview. “Hopefully, hopefully, we will have it done by tomorrow.”

The final sticking points involved complex talks led by Mnuchin and Ways and Means Chairman Richie Neal (D-Mass.) over sick leave for employees impacted by the coronavirus as well as their family members, said multiple Democratic and GOP aides.

Pelosi and Mnuchin held several conversations throughout Thursday. Pelosi then tapped Neal to try hammer out an accord over the paid leave issue with Mnuchin, said Democratic aides.

The multibillion-dollar House proposal — which aims to shore up safety-net programs like food aid and unemployment insurance — represents Washington's most aggressive response to the growing coronavirus crisis, which has sent financial markets into a panic as it quickly spreads across the globe. Schools across the United States announced closures throughout the day. The NCAA canceled its annual college basketball tournament, while businesses and state and local governments ordered their workers to stay home.

With so much at stake, Democrats and the White House are wrestling over two initiatives to help workers directly impacted by the coronavirus.

First, Democrats want to permanently require businesses to offer 14 days of paid leave directly to workers in the event of a public health emergency. But it also would include a refundable tax credit for employers with 500 employees or less to help offset those costs, reimbursed by IRS.

The second is a proposed temporary federal sick leave program. Workers suffering from the coronavirus, or with family members who have it, would receive some portion of their current wages for up to three months.

Both of the programs would be tied to the length of the coronavirus outbreak, which makes it hard to predict their cost.

Reps. Rosa DeLauro (D-Conn.), Bobby Scott (D-Va.) and other lawmakers drafted the initial proposals.

Early Thursday, Republicans and the White House raised strong objections to the Democrats’ initiative, which was unveiled close to midnight on Wednesday. But Pelosi told reporters that Democrats have agreed to “most” of the GOP’s proposed changes.

The two sides had earlier reached agreement on a Medicaid cost-sharing provision, as well as a temporary liability waiver to mask manufacturers, according to sources in both parties.

Some progressive Democrats are concerned about concessions made by party leaders on paid sick leave. DeLauro, a vocal advocate on the issue, has continued to push for a provision that would allow permanent paid sick leave, despite objections from Republicans who want only temporary benefits.

Asked whether Democrats would need to drop their push for a permanent sick leave provision amid GOP resistance, DeLauro sought to downplay the controversy.

“This is all focused on coronavirus. This is what the emergency is,” DeLauro said. “Progress is being made. ... We’re trying to button it all up.” Still, even some of DeLauro’s Democratic colleagues have lost patience, with several privately complaining that her refusal to relent is a key obstacle to a bipartisan deal.

Even as Pelosi and Mnuchin continued their talks on the House bill, Senate Majority Leader Mitch McConnell declared his chamber would cancel next week's recess to continue work on dealing with the outbreak. If the House passes the bill Friday, the Senate could approve it next week and send it to President Donald Trump's desk.

"Notwithstanding the scheduled state work period, the Senate will be in session next week," the GOP leader tweeted. "I am glad talks are ongoing between the Administration and Speaker Pelosi. I hope Congress can pass bipartisan legislation to continue combating the coronavirus and keep our economy strong."

Senior Democrats had initially been hopeful — some, even confident — that their bill would immediately win support from Republicans.

By Thursday morning, however, GOP leaders said they would oppose the plan over the paid leave plan and changes to Medicaid, which would help hospitals cover swelling costs of uninsured patients.

House Minority Leader Kevin McCarthy (R-Calif.) told Republicans on a conference call Thursday morning that the GOP is going to oppose the Democratic coronavirus bill as currently constructed, according to sources on the call. At a press briefing shortly after, McCarthy said both chambers should remain in session until a bill can be negotiated, repeatedly emphasizing that they want to work with Pelosi.

“I think we stay here, we get it right,” McCarthy told reporters. “I think we can get this done in the next 48 hours."

Republicans have specifically taken issue with language in the bill that requires paid sick leave for all businesses with no exemptions or end date, puts the Social Security Administration in charge of the paid emergency leave program and increases Medicaid’s Federal Medical Assistance Percentage.

Trump also said Thursday that he did not support the measure, even as his Treasury chief took part in multiple conversations with Pelosi to discuss changes to the bill.

"No, there are things in there that had nothing to do of what we are talking about. It is not a way for them to get some of the goodies they have been able to get for the last 25 years," Trump said, without offering specifics.

Trump outlined his own proposals in a prime-time Oval Office address on Wednesday night, which included paid sick leave, small-business loans and delaying tax payment deadlines. Democrats say they plan to address any tax-specific measures in a later package, focusing instead on families with low incomes and and vulnerable populations.

McConnell, for his part, called the House measure an “ideological wish list.”

The Kentucky Republican insisted the Senate was willing to consider a compromise package if it can be negotiated by Democrats and the White House, but said, “left-wing political messaging may have taken priority over the needs of our country.”

The negotiations come at a dramatic moment on Capitol Hill, with senior Democrats and Republicans acknowledging that they had never before seen such a crisis, with no way of knowing the eventual scale in the U.S.

The uncertainty has been compounded by rising frustration among members of both parties about their inability to get clear answers from the Trump administration about the government's capacity to test individuals for the virus.

Conservative Rep. Mark Walker (R-N.C.) said Trump administration officials left "a lot of questions that are still not being able to be answered" after a Thursday morning briefing. "[There's] frustration among members as a whole," he said, particularly about why the United States can't replicate successful testing regimes implemented elsewhere.

"I believe the CDC struggled to give a really strong answer on being able to duplicate some of the places like South Korea," he said.

The Capitol is also grappling with its first case of the coronavirus in its complex. An aide to Sen. Maria Cantwell (D-Wash.) has tested positive for the virus, and multiple congressional offices are now working remotely.

The response on Capitol Hill has been escalating rapidly in the past 24 hours, with party leaders and building security officials deciding to clamp down on public tours.

The sweeping package — crafted in about 72 hours by a handful of Democratic chairmen — took even some Democrats by surprise.

Rep. Ed Perlmutter (D-Col.) told Democratic chairmen at a middle-of-the-night meeting of the House Rules Committee that he didn't understand why the vote couldn’t be slowed down slightly for all members to digest the package.

"This is about as far from regular order" as Congress gets, Perlmutter said early Thursday morning, challenging House Energy and Commerce Chairman Frank Pallone.

Kyle Cheney, Marianne LeVine and Jake Sherman contributed to this report.