Perhaps Democrats in Congress should have acknowledged the “validity” of Republican concerns over disincentives in the unemployment benefit bonuses in March. At the time, the fierce urgency of now argument prevailed as Senate Democrats shot down an amendment that would have fixed the disincentive issue in April. From that point forward, Democrats steadfastly refused to debate or negotiate the $600-per-week unemployment bonus that paid some workers more than they made from working. Their latest version of Phase 4 relief, the HEROES Act, would extend it through the end of the year.
In April, Democrats essentially issued an ultimatum, forcing Republicans to swallow the disincentive in order to get aid passed. This time around, Mitch McConnell is trying the same tactic in reverse — and it might be working. Steny Hoyer, the House Democrats’ second-ranking leader, told CNN that the provision should be changed — in negotiation, rather than in an ultimatum:
Q: “I just want to make sure I'm hearing you correctly. It does seem like you might be willing to come off some from $600. Not to $200, but you're not demanding $600 or bust?”
Leader Hoyer: It's not $600 or bust… that's not where we are. We are prepared to discuss this.” pic.twitter.com/Ihgn5zOzIV
— Senate Republican Communications Center (@SRCC) July 28, 2020
CNN’s John Berman is so surprised at this switch that he has to double-check with Hoyer to make sure he heard it correctly. ““I just want to make sure I’m hearing you correctly,” Berman says, and for good reason. Just a few hours earlier, both Chuck Schumer and Nancy Pelosi rejected the Senate Republican proposal in toto out of hand, including the cut to $200 per week, as Jazz noted this morning. They didn’t bother to acknowledge the “validity” of GOP arguments on anything, including the disincentives in the jobless benefits in the CARES Act.
That’s quite a change in just a few short hours. What gives? Likely, Hoyer and other Democrats are less married to that provision than they are to state aid, which they have repeatedly promised and proposed by the truckload in the HEROES Act. This looks like an opening bid to new negotiations for some version of state bloc-grant aid, ostensibly to pay for COVID-19 efforts but more likely to be used to shore up strained budgets. The cost savings from reductions in this program could offset those grants a little, but the HEROES Act spent one trillion dollars on just that aid alone. Democrats know they will get the better of that exchange in the end — even if the reductions do incentivize returns to work and provide Donald Trump an economic boost.
So what will Republicans get in exchange to offset that concession when it comes? (And it will come, believe you me.) They will probably get a somewhat limited version of the liability protections they want to pass, which Republicans argue (and hope) will boost the economy by safeguarding small businesses. That’s the real tradeoff that will be at stake in Phase 4. Hoyer just signaled that Democrats are willing to deal on their “values,” as he put it to Berman. The trial-lawyer lobby will be one of those “values” on the negotiating block if they want to get state aid passed in the Senate, and Hoyer’s signaling that Democrats are now open for business.