US Congress delivers nearly $500bn more in coronavirus aid

Bill passed as Republicans and Democrats spar over assistance programmes that now total $2.4 trillion

Speaker Nancy Pelosi arrives at the US Capitol in Washington on April 23, 2020 for a vote on a $500 billion coronavirus aid package. Getty Images / AFP

President Donald Trump will hold a signing ceremony Friday for a bill providing a nearly $500 billion infusion of coronavirus spending, rushing new relief to employers and hospitals buckling under the strain of a pandemic that has claimed almost 50,000 American lives and one in six US jobs.

The measure passed Congress almost unanimously on Thursday, but the lopsided tally belies a potentially bumpier path ahead as battle lines are being formed for much more ambitious future legislation that may prove far more difficult to manoeuvre through Congress.

The bipartisan measure passed as legislators gathered in Washington as a group for the first time since March 27, adopting stricter social distancing rules while seeking to prove they can do their work despite the Covid-19 crisis.

Lawmakers’ face masks and bandannas added a sombre tone to their effort to aid a nation staggered by the health crisis and devastating economic costs of the pandemic.

“Millions of people out of work,” said House Speaker Nancy Pelosi. “This is really a very, very, very sad day. We come to the floor with nearly 50,000 deaths, a huge number of people impacted, and the uncertainty of it all. We hope to soon get to a recovery phase. But right now we’re still in mitigation.”

Anchoring the bill is the Trump administration’s $250bn funding request to replenish a fund to help small- and medium-size businesses with payroll, rent and other expenses. The payroll programme provides forgivable loans so businesses can continue paying workers while forced to stay closed for social distancing and stay-at-home orders.

It also contains $100bn demanded by Democrats for hospitals and a nationwide testing programme, along with a $60bn set-aside for small banks and an alternative network of community development banks that focus on development in urban neighbourhoods and rural areas ignored by many lenders. There is also $60bn for small-business loans and grants delivered through the Small Business Administration’s existing disaster aid programme.

Mr Trump celebrated the bill’s passage at his daily White House briefing on Thursday. “At a time when many Americans are enduring significant economic challenges, this bill will help small businesses to keep millions of workers on the payroll,” he said.

The 388-5 vote came at the end of a thorny path to passage. Republicans sought immediate action on Mr Trump’s “clean” request for the small business money — backed by powerful, Republican-leaning business groups — but Democrats demanded equal funding for their priorities, frustrating Republicans who accused them of seeking leverage during the crisis. Republicans said delays in replenishing the pay cheque subsidy programme probably pushed some struggling businesses over the edge into closure.

Passage of more coronavirus relief is likely in the weeks ahead. Supporters are already warning that the business-backed Payroll Protection Programme will exhaust the new $250bn almost immediately. Launched just weeks ago, the programme quickly reached its lending limit after approving nearly 1.7 million loans. That left thousands of small businesses in limbo as they sought help.

Ms Pelosi and her allies have said the next measure will distribute more relief to individuals, extend more generous jobless benefits into the autumn, provide another round of direct payments to most people and help those who are laid off afford health insurance.

Democrats tried to win another round of funding for state and local governments in Thursday’s bill but were rebuffed by Senate Majority Leader Mitch McConnell, who says he wants to halt runaway deficit spending. McConnell says he doesn't want to bail out Democratic-governed states for fiscal problems that predated the pandemic, but there's plenty of demand for state fiscal relief among Republicans, too.

After the Senate passed the latest bill Tuesday, Mr McConnell declared that Republicans would entertain no more coronavirus rescue legislation until the Senate returns to Washington, promising rank-and-file Republicans greater say in the future legislation, rather than leaving it in the hands of top bipartisan leaders.

Ms Pelosi attacked Mr McConnell for at first opposing adding any money to his original $250 billion package and saying cash-strapped states should be allowed to declare bankruptcy, a move that they currently cannot do and that would threaten a broad range of state services. McConnell’s comments provoked an outcry — including from Republican governors — and he later tempered his remarks.

All told, the four coronavirus relief bills crafted by Congress would deliver at least $2.4 trillion for business relief, testing and treatment, and direct payments to individuals and the unemployed, according to the Congressional Budget Office. The deficit is virtually certain to breach $3 trillion this year and is likely to go well above that when CBO issues new data as early as Friday.

In related matter, the House used a party-line 212-182 vote Thursday to establish a special committee to oversee how the Trump administration spends the huge sums of money Congress is providing to battle the coronavirus. Republicans accused Democrats of playing politics with the crisis, but Democrats said Congress needs to keep an eye on the effort.