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September 28, 2020

U.S. Government Shutdown Unlikely, But What About Another COVID Relief Package?

On an overwhelmingly bipartisan vote on September 22, the U.S. House of Representatives approved a continuing resolution (CR) that will keep federal discretionary spending programs operational until December 11, 2020. In addition to providing current funding levels for the majority of programs, the legislation includes $8 billion in nutrition assistance for low-income children and families, a Democratic priority, and assistance for farmers, a Republican priority. A summary of the legislation can be found here.)

The U.S. Senate is expected to approve the package this week. Passage of the legislation averts a government shutdown.

While there had been discussion of including severe COVID business relief measures, including extension of the U.S. Small Business Administration’s Paycheck Protection Program (PPP) and certain liability protections in the appropriations bill, that did not happen. The next chance to pass these initiatives, therefore, is through a fourth round of coronavirus relief, an effort that has been mired in partisan politics for months.

Negotiations on a fourth COVID package began back in May when the U.S. House of Representatives, led by Democrats, approved a $3.5 trillion package that included $1 trillion in aid for states, but lacked the liability protections that Republican leaders (and many in the business community) want. Senate Majority Leader Mitch McConnell has offered two different packages, one totaling $350 billion and another around $1.1 trillion – both had liability protections as their centerpiece. The White House, meanwhile, has indicated it is willing to accept legislation that costs in the $1.5 trillion range.

Last week, there may have been some easing of the stalemate: House Speaker Nancy Pelosi (D-Calif.) and U.S. Treasury Secretary Steve Mnuchin said that they have agreed to go back to the negotiating table and the Speaker is reportedly ready to offer a package of initiatives that total around $2.2 trillion to $2.4 trillion. More information about that legislation should be available early this week – and the House may even vote on it. According to Bloomberg, it is likely to include aid for airlines and an extension of federal jobless benefits.

Stay tuned to Connecting the Dots for more information as negotiations continue.