Bipartisan group pitches $908bn Covid-19 relief to break deadlock in Congress

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A bipartisan group of US lawmakers on Tuesday unveiled a $908bn Covid-19 relief bill aimed at breaking a months-long deadlock between Democrats and Republicans over new emergency assistance for small businesses, unemployed people, airlines and other industries.

The measure has not been written into legislation. Nor has it been embraced by the Trump administration, President-elect Joe Biden or leaders in the Senate or House of Representatives, all of whom would be needed for passage.

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But it comes with the backing of a group of conservatives and moderates who claim it will appeal to a broad swath of Congress. Economists and senior government figures, including the Federal Reserve chair, Jerome Powell, have warned the US economy is at risk unless Congress acts.

Lawmakers are hoping to wrap up their work for the year by mid-December but they still have a massive government-funding bill to approve or else risk agency shutdowns starting on 12 December. If the bipartisan coronavirus aid bill gains traction, it could either be attached to the spending bill or advance on a separate track.

“It would be stupidity on steroids if Congress left for Christmas without doing an interim package,” said Senator Mark Warner, a Virginia Democrat.

Earlier this year, more than $3tn in coronavirus aid was enacted, which included economic stimulus measures and money for medical supplies. But since then negotiations about more aid have stalled in Congress.

On Tuesday Powell told Congress that the outlook for the US economy was “extraordinarily uncertain” as the rise in Covid-19 cases continues to take an economic toll on the country. The latest monthly jobs report, released on Friday, is expected to show that the pace of recovery in the jobs market is continuing to slow.

The plan was unveiled at a Capitol Hill news conference, amid a surge in coronavirus cases, with significant increases in deaths and hospital resources at a breaking point.

The Republican senator Lisa Murkowski, of Alaska, urged quick action on the bipartisan plan as she ticked off business closures mushrooming in her state “during a pretty dark and cold time of year”, with many suffering job losses and “food insecurity”.

The proposal would provide emergency aid through 31 March, including $228bn in paycheck protection program funds for hotels, restaurants and other small businesses. State and local governments would receive direct aid, the lawmakers said.

The Ohio governor, Mike DeWine, a Republican, appealed for help from Congress, noting in an interview on CBS that his state has more than 5,000 coronavirus patients in hospitals and not enough money to distribute the much-awaited Covid vaccines that are expected to be available beginning this winter.

US airlines would receive $17bn for four months of payroll support as part of $45bn for the transportation sector that also includes airports, buses and Amtrak passenger rail, according to two people familiar with the plan.

Senator Mitt Romney of Utah, a Republican, said the bill contained $560bn in “repurposed” funding from the Cares Act enacted in March, with the remaining $348bn in new money.

The measure includes provisions Republicans have been pressing for, including liability protections for businesses and schools. But it is far more expensive than the $500bn that the Senate majority leader, Mitch McConnell, has been advocating.

The House speaker, Nancy Pelosi, and her fellow Democrats would win a central demand with the aid to state and local governments, which face layoffs of frontline workers.

A compromise $300 a week for four months in additional unemployment benefits is in the package, according to the lawmakers. Democrats had been seeking $600.

Separately, a group of Democratic senators introduced legislation on Tuesday that would extend until October 2021 the $600 a week in jobless benefits for workers who lost their jobs due to Covid-19.

While it is significantly below the $2.2tn Pelosi sought in her last offer to the White House before the 3 November elections, the $908bn is for a relatively short period, potentially opening the door to additional requests for money once the Biden administration is in place.

Pelosi and the treasury secretary, Steven Mnuchin, were expected to discuss coronavirus aid and the must-pass government funding bill later on Tuesday.