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Democrats Again Block Action on Coronavirus Stimulus, Seeking Restrictions on Corporate Aid

WASHINGTON — The Treasury secretary and the top Senate Democrat said late Monday that they were on the brink of a deal on a nearly $2 trillion emergency economic aid measure to respond to the coronavirus pandemic, after a marathon day of talks as Democrats demanded stronger protections for workers and restrictions for bailed-out businesses.

Hours after Democrats voted to block action on the plan until they secured concessions and the Senate dissolved into partisan sniping, Senator Chuck Schumer of New York, the minority leader, and Steven Mnuchin, the Treasury secretary, signaled that their private negotiations had yielded important breakthroughs that could clear the way for enactment of the plan within days.

“We expect to have an agreement in the morning,” Mr. Schumer told reporters just before midnight, adding that he hoped the Senate could vote by Tuesday evening. “There are still a few little differences.”

Mr. Mnuchin, who spent the day on Capitol Hill huddling with senators from both parties, said that a “lot of progress” had been made but that both sides would review draft text and other documents overnight.

The two men called President Trump just before they broke for the night, and Mr. Schumer said his response had been “very positive” despite a post on Twitter minutes before in which the president accused Democrats, led by Speaker Nancy Pelosi of California, of sabotaging the package and wanting “the Virus to win.”

Among other provisions, the two sides appeared to have reached an agreement, at least in principle, on how to ensure oversight over a $500 billion economic stabilization fund that would be used to bail out distressed companies, according to an official familiar with the talks. The official, who was not authorized to discuss them publicly, said the details were still being worked out.

Despite a sense of desperation in both parties and at the White House about quickly enacting legislation to deliver critical financial support to businesses forced to shutter and relief to hard-pressed American families, sharp ideological differences between Republicans and Democrats have made it difficult to finalize a compromise.

The deep well of distrust between Democrats and Mr. Trump had been hampering agreement, and the shadow of the last huge government aid program approved by Congress — the Wall Street bailout in 2008 — hung over the talks, a cautionary tale of the political risks of sending federal money to corporations with unpredictable consequences.

The late-night optimism was a marked turnaround from earlier in the day, when the normally staid Senate dissolved into shouting and partisan bickering before the vote, as senators sparred over the stimulus package, which is emerging as the largest in modern history. Republicans blasted Democrats for delaying desperately needed economic aid, while Democrats said the measure under discussion did too little to help ordinary Americans or to ensure that federal money would not be abused by businesses that received aid.

“Are you kidding me?” Senator Mitch McConnell, Republican of Kentucky and the majority leader, demanded on the Senate floor. “This is not a juicy political opportunity. This is a national emergency.”

The remarkable scene unfolded the day after Democrats first blocked action on the measure. The 47-to-47 vote on Sunday evening shook markets around the globe and infuriated Republicans who said it ignored bipartisan talks that had yielded substantial compromises over the outlines of the measure.

The outcome was similar on Monday afternoon, as the Senate voted 49 to 46, again falling short of the 60 votes that would have been needed to go forward on the stabilization measure. Republicans insisted on holding the vote in the absence of an agreement, seizing an opportunity to portray Democrats as obstacles to a deal.

The markets reacted with a shudder, with the S&P 500 falling about 3 percent, even after the Federal Reserve said it would vastly expand its efforts to shore up businesses and keep markets functioning.

The defeat and the testy exchanges overshadowed the urgent set of negotiations that continued all day behind the scenes between Mr. Schumer and Mr. Mnuchin to iron out remaining differences. Mr. McConnell and Ms. Pelosi were kept closely apprised of the talks.

At the heart of the impasse in the Senate has been a $425 billion fund created by the bill that the Federal Reserve could leverage for loans to assist broad groups of distressed companies, and an additional $75 billion it would provide for industry-specific loans. Democrats raised concerns that the plan would not require sufficient transparency or enough guardrails around the funds to make sure companies do not use them to enrich themselves or take government money and lay off workers. They also argued the measure as written by Republicans would give Mr. Mnuchin too much discretion to decide which companies receive aid, calling the proposal a “slush fund” for the administration.

As the legislation is currently written, Mr. Mnuchin would not have to disclose the recipients until six months after the loans were disbursed. Some Democrats also said the legislation as written could allow Mr. Trump’s real estate empire to take advantage of the federal aid, and after years of being stonewalled by the White House on oversight requests, they worried that the administration would refuse attempts by Congress to keep tabs on the program.

At the White House on Monday evening, Mr. Trump only fueled Democrats’ concerns when he brushed aside questions about who would oversee the funds, saying: “Look, I’ll be the oversight. I’ll be the oversight.”

“It would be very foolish if they didn’t make a deal,” Mr. Trump said, accusing Democrats of “asking for things that bear no relationship to what we’re talking about.”

Mr. Mnuchin has argued that bolstering the newly created fund would allow the Federal Reserve to effectively inject $4 trillion into the economy, and that he needs the authority to swiftly support companies and industries that are on the brink of collapse as large sections of the economy shut down. On Monday, he pushed back against the suggestion that the money would become a piggy bank for Mr. Trump’s allies.

“I’ve heard people refer to this as a slush fund,” Mr. Mnuchin said on the Fox Business Network. “It’s not a slush fund.”

Hanging over the debate for senators in both parties were unpleasant memories of the stinging backlash from the 2008 and 2009 economic recovery programs that were later condemned on the right and left for helping Wall Street at the expense of working Americans. Democrats said they would not be bullied into supporting the stimulus package by Mr. McConnell, despite evident political risks as they face a battle for control of the Senate in November.

“The fact is, we need to learn from 10 years ago,” said Senator Sherrod Brown, Democrat of Ohio. “If we’re going to do relief package, the money needs to go in the pockets of workers.”

Democrats are pressing for more jobless aid and money for states as part of the agreement.

“Let’s be clear about what we are talking about here: We don’t think your bill works,” said Senator Christopher S. Murphy, Democrat of Connecticut. “This is a policy disagreement, and I have an obligation as a representative of my state to stand up and say when I don’t think a $2 trillion bill is going to solve the problem.”

Only one Democrat, Senator Doug Jones of Alabama, joined Republicans on Monday in voting to advance the package.

The debate beforehand was unusually fiery, and it escalated as Mr. Schumer repeatedly cut off attempts by Senator Susan Collins, Republican of Maine, to be recognized to speak.

“This is unbelievable,” Ms. Collins fumed, as other Republicans pushed to allow her to weigh in. She walked over to Mr. Schumer, pointing at him, and said: “You are objecting to my speaking? This is appalling.”

Senator Tom Cotton, Republican of Arkansas, muttering audibly, used a barnyard epithet to express his assessment of the situation.

When Ms. Collins did get to speak, she warned that time was running out to preserve small businesses in her state and across the country teetering on the brink of collapse.

“We don’t have another day,” she said. “We don’t have another hour. We don’t have another minute to delay acting. This is disgraceful.”

At the White House, Vice President Mike Pence sought to ratchet up pressure on Democrats to drop their opposition. On a conference call on Monday afternoon, he urged governors to press their states’ representatives to get the bill moving.

“Governors, it will make a real difference,” Mr. Pence said, according to a recording of the call obtained by The New York Times.

Senate Republicans and Democrats had already struck a number of major compromises on the package, including a tentative agreement on sending $1,200 government payments to those earning up to $75,000 a year, with an additional $500 per child. Smaller checks would be sent to those earning more, and there would be an upper eligibility limit of $99,000 in income.

By Monday night, they were closing in on an agreement on hundreds of billions of dollars to support hospitals struggling to care for the thousands infected by the coronavirus.

Democrats had also pushed to strengthen worker protections — arguing that the draft measure failed to prevent layoffs — and to enforce heavier restrictions on executive compensation and companies’ ability to buy back stock.

Democrats also want to extend jobless benefits in the legislation for an additional month. Republicans have already agreed to a large expansion of the unemployment insurance program, broadening it to include self-employed and part-time workers who traditionally have not been eligible, and to cover 100 percent of wages for three months.

There was also disagreement, according to two people familiar with the negotiations but who are unauthorized to discuss them publicly, over how much money to allocate to farmers and whether to expand nutrition assistance benefits. And Democrats have raised concerns about language that could prevent Planned Parenthood and community mental health providers that rely on Medicaid from receiving loans and an extension of an abstinence education program set to expire in May.

In the House, Democrats unveiled their own stimulus package, which would provide more than $2.5 trillion in federal spending. It remained unclear how that 1,404-page measure would be reconciled with any compromise legislation that emerges from the Senate negotiations.

“The Senate Republican bill put corporations first,” Ms. Pelosi said during brief televised remarks.

Raising the stakes on the negotiations, the perils of the pandemic have effectively forced House leaders to contemplate passing the huge package by unanimous consent, a procedure usually reserved for minor, noncontroversial measures that does not require a recorded vote. The House is not in session, and many of its members are scattered across the country — some of them sick or in quarantine — and are wary of flying back to Washington to vote.

Senior Democrats are considering a range of other options, including a rule change that would allow absent members to vote by proxy, in case any lawmaker objected to passing it without a vote, according to a Rules Committee report released late Monday.

The House bill introduced on Monday, according to summaries circulated by Democrats, would deliver $1,500 in direct payments to individuals and more than $150 billion to hospitals and government health programs, and it would create an unemployment compensation of $600 a week along with regular unemployment benefits.

It would also include a national requirement for 15 days of early voting and no-excuse absentee vote-by-mail and election funding and nearly $60 billion for schools and universities, coupled with free coronavirus treatment and expanded paid leave.

Mr. McConnell and other Republicans spent much of the day blaming Ms. Pelosi, who returned to Washington from San Francisco on Saturday to participate in the stimulus talks, for upending a productive set of bipartisan negotiations.

A senior Republican aide, speaking on the condition of anonymity to disclose details of the private negotiations, said Democrats were trying to use the stimulus measure to accomplish long-held, unrelated policy priorities, including expanding collective bargaining rights for unions, implementing an extension of solar and wind tax credits to help the renewable energy industry, and tying aid to airlines to gradual reductions on carbon dioxide emissions that they have long resisted.

Reporting was contributed by Carl Hulse, Alan Rappeport, Lisa Friedman and Jonathan Martin.

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