Democrats in Congress have released a plan for $3tn in new stimulus spending that would help state and local governments through the coronavirus crisis, assistance already rejected by the White House and Republicans on Capitol Hill.
The 1,815-page proposal, unveiled after governors in large US states like New York and California warned essential services could be curtailed without aid, includes $500bn for state governments and $375bn for local authorities struggling to balance increased costs and lower tax revenues triggered by the pandemic.
Congress has already appropriated nearly $3tn in economic relief since the start of the outbreak. But legislators and the Trump administration are gearing up for additional measures after US unemployment hit a postwar high of 14.7 per cent in April.
The Democratic proposals were drafted without input from Republicans, and their demands for extra funding for states and cities are expected to be a sticking point. Mitch McConnell, the Senate’s top Republican, and President Donald Trump have suggested hard-hit states have been mismanaged by Democratic governors and should not receive federal help.
Mr McConnell suggested last month that those states, which are legally required to balance their budgets, consider filing for bankruptcy, and has offered his own priorities for new legislation, including liability protection for employers.
Mr McConnell has argued that without legal shields, it would be difficult for companies to bring their employees back to work with out an “epidemic of lawsuits . . . [that] will dramatically slow our efforts to get back to normal”.
Democrats oppose so-called liability shields and instead proposed stronger worker protection standards, including measures to prevent employers from retaliating against employees who report public health issues in their workplaces.
Top Republicans swiftly rejected the Democrats’ proposals on Tuesday, accusing Nancy Pelosi, the Democratic Speaker of the House of Representatives, of pushing a leftwing agenda.
“Let me state the obvious: what Nancy Pelosi is proposing will never pass the Senate,” said John Barrasso, the Republican senator from Wyoming who chairs the Senate Republican Conference.
Mr McConnell told reporters at the Capitol on Monday that there was no “urgency” in “acting immediately” on more stimulus.
But Ms Pelosi on Tuesday disagreed, saying that pausing federal relief efforts would hit Americans already struggling with the lockdown.
“The families who are suffering know that hunger doesn’t take a pause,” Ms Pelosi said. “The rent doesn’t take a pause, the bills don’t take a pause, the hardship of losing a job or tragically losing a loved one doesn’t take a pause.”
The Democrats’ latest proposals also include a $200bn hazard pay fund for “essential workers”, another round of $1,200 means-tested “economic impact payments” for American adults earning up to $75,000 a year, and an extension of enhanced unemployment benefits through to the end of 2021.
The $2.2tn Cares Act, which was signed into law in March, gave unemployed Americans an extra $600 a week in federal unemployment payments for four months.
Steny Hoyer, the Democratic leader in the House, said its members should return to Washington for debate and a vote on the proposal on Friday.
The Democrat-controlled House has remained in recess, while the Republican-controlled Senate resumed business last week. Many lawmakers and staffers have resisted spending time in the Capitol amid concerns about the coronavirus spreading through the complex.
Asked about House Democrats’ proposals on Tuesday, Kayleigh McEnany, White House press secretary, said Mr Trump still hoped any future legislation would include a cut on worker payments to federal social programmes, known as a payroll tax.
“The president has noted a payroll tax is something that needs to be looked at, not conditioning it on that, but noting that is something he desires to see,” Ms McEnany said.