GOP and Democrats are far apart on coronavirus relief – here's what happens next

Key Points
  • Democratic leaders Nancy Pelosi and Chuck Schumer are set to continue coronavirus relief talks with Trump administration officials on Tuesday. 
  • After Senate Republicans put out their opening offer for pandemic aid on Monday, Democrats said they were still far from a deal. 
  • The parties appear divided on issues including unemployment insurance, aid for state and local governments, and assistance for renters and homeowners. Leaders have not given firm deadlines for negotiations.
An ambulance sits outside the US Capitol in Washington, DC, March 23, 2020, as the Senate continues negotiations on a relief package in response to the outbreak of COVID-19, known as the coronavirus.
Saul Loeb | AFP | Getty Images

Senate Republicans' release of a coronavirus relief package Monday only started the thorny process of Congress crafting a bill to try to blunt the economic damage from the pandemic. 

Now, GOP leaders and White House officials have to bridge a gulf between their priorities and the goals of top Democrats during talks in the coming days. While Congress will rush to strike a deal, leaders are not giving firm deadlines for when they aim to agree to and pass legislation. 

Republicans will not try to approve their proposal in the Senate. Both the GOP-controlled Senate and Democratic-held House appear intent on waiting to vote until the parties draft a plan that can get through both chambers and become law.

Negotiators started the process Monday evening, when House Speaker Nancy Pelosi, D-Calif., and Senate Minority Leader Chuck Schumer, D-N.Y., met with Treasury Secretary Steven Mnuchin and White House chief of staff Mark Meadows. Leaving the discussions, Meadows described a "very good meeting." 

The four officials will meet again at 4 p.m. ET Tuesday in Pelosi's office, according to an aide familiar with the plan.

Here's what's in the GOP's coronavirus stimulus proposal
Here's what's in the GOP's coronavirus stimulus proposal

After the discussion Monday, Democrats sounded less hopeful than Meadows did about where the bill stands. 

"Unfortunately, we're pretty far apart right now, although I'm optimistic we could have a good solution at the end," Schumer said Tuesday on "CBS This Morning."

Asked if the sides could reach a deal before the end of next week, he said: "I hope so, and that's what we're working for. We'll sit down. We're going to sit down again today. We'll sit down 24/7."

Congress faces pressure to approve more aid, as any delays will hold back assistance to jobless Americans after states stopped paying out the $600 per week federal unemployment benefit this week. A federal eviction moratorium expired, states are trying to process a flurry of Covid-19 tests during a nationwide surge and school districts are struggling to plan how to open safely in the fall. 

After previous coronavirus aid packages passed with overwhelming support in the spring, the developing bill looks likely to draw less support. Some GOP lawmakers have expressed concerns about more federal spending to buoy the economy after Congress allocated more than $2.5 trillion to combat the pandemic earlier this year. 

Sen. Pat Toomey, R-Pa., told CNBC that "Republicans are going to be divided on this one." 

Many GOP lawmakers oppose the plan as written now, and will resist concessions the White House makes to earn Pelosi's support.

"I imagine it's probably another week or two," Toomey said Tuesday about when Congress could reach an agreement.

Points of contention

The core areas of dispute between Democrats and Republicans in the coming weeks will likely include jobless benefits, aid for state and local governments, liability protections for businesses, and rent, mortgage and food assistance.

The Republican package, released Monday as a series of smaller bills, would cut the enhanced unemployment benefit from $600 to $200 per week (on top of what recipients get from states) through September. It would then set the assistance at 70% of a worker's previous wages, with a cap of $500 per week.

Sen. Pat Toomey: GOP will be divided in negotiations for next round of stimulus
Sen. Pat Toomey: GOP will be divided in negotiations for next round of stimulus

Democrats have warned outdated state unemployment systems cannot handle replacing a percentage of wages, which would delay critical assistance for the roughly 30 million people getting some form of unemployment insurance. They have called to extend the $600 per week benefit into next year and potentially phase it out as state unemployment rates fall. 

On top of the unemployment change, the GOP proposal would send another direct payment of up to $1,200 to individuals and $2,400 to couples. It includes an additional $500 for every dependent of any age. 

The Republican legislation includes liability protections for businesses, doctors and schools except for cases of "gross negligence" or "willful misconduct." 

Businesses with fewer than 300 employees who endured a revenue drop of more than 50% could apply for another Paycheck Protection Program loan. The plan would authorize $105 billion for schools, some of which would go only to districts that physically reopen. 

It would also put $26 billion toward the development of Covid-19 vaccines and therapeutics, and send $16 billion to states to help them boost testing capacity. 

Here's who is eligible to tap their 401(k) under CARES Act rule changes
Here's who is eligible to tap their 401(k) under CARES Act rule changes

Democratic pushback

After the meeting with administration officials Monday, Pelosi criticized Republicans for leaving out key aid measures Democrats included in the $3 trillion relief package they passed in May. Those include more relief funds for cash-crunched state and local governments, money to assist renters and a moratorium on evictions, and a strengthened Supplemental Nutrition Assistance Program benefit to help families afford food. 

"We have some other priorities that we want to see in the bill, but they're not even getting to the fundamentals of food and rent and economic survival," Pelosi said. "They're not really ready to have a serious negotiation."

Senate Majority Leader Mitch McConnell criticized Democrats on Tuesday for what he called "partisan tropes" in opposition to the GOP plan. 

"Do the speaker of the House and the Democratic leader believe that struggling Americans deserve an outcome or do they want to stay on the sidelines and recite talking points?" the Kentucky Republican asked. 

The Democratic bill passed in May allocated nearly $1 trillion to state and local governments, which have warned about the possibility of cutting back essential services as they spend more and take in less money during the pandemic. The GOP proposal would not authorize any new aid. Instead, it would give states and municipalities more flexibility in how to spend relief funds approved earlier this year. 

The House legislation would put $175 billion toward rent, mortgage and utility assistance. It would also boost the maximum SNAP benefit by 15%. 

As lawmakers try to resolve a bevy of issues and pass coronavirus relief before they leave for a potentially abbreviated August recess, both Pelosi and Schumer stressed that they would not put a deadline on reaching a deal.

"No," the House speaker told reporters Monday when asked if Democrats had a time frame for striking an agreement. 

Schumer added: "No, we're going to keep talking. That's all."

Subscribe to CNBC on YouTube.

This 90-year-old company embraced the coronavirus economy. Now it needs to hire employees
This company embraced the coronavirus economy and now it is hiring workers