Trump, Congress square off over virus aid as crisis worsens

President Donald Trump, Senate Majority Leader Mitch McConnell of Ky., and House Minority Leader Kevin McCarthy of California, listen as Treasury Secretary Steven Mnuchin speaks during a meeting in the Oval Office of the White House, Monday, July 20, 2020, in Washington. (AP)

WASHINGTON — President Donald Trump acknowledged Monday a “big flare up” of COVID-19 cases, but divisions between the White House and Senate Republicans and differences with Democrats posed fresh challenges for a new federal aid package with the U.S. crisis worsening and emergency relief about to expire.

Trump convened GOP leaders at the White House as Senate Majority Leader Mitch McConnell prepared to roll out his $1 trillion package in a matter of days. But the administration criticized the legislation’s money for more virus testing and insisted on a payroll tax cut that could complicate quick passage. The timeline appeared to quickly shift.

“We’ve made a lot of progress,” Trump said as the meeting got underway.

But the president added, “Unfortunately, this is something that’s very tough.”

Lawmakers returned to a Capitol still off-limits to tourists, another sign of the nation’s difficulty containing the coronavirus. Rather than easing, the pandemic’s devastating cycle is churning again, leaving Congress little choice but to engineer another costly rescue. Businesses are shutting down again, many schools will not fully reopen and jobs are disappearing, all while federal aid will expire in days.

Without a successful federal strategy, lawmakers are trying to draft one.

“We have to end this virus,” House Speaker Nancy Pelosi, D-Calif., said Monday on MSNBC.

She said any attempt by the White House to block money for testing “goes beyond ignorance.”

The political stakes are high for both parties before the November election, and even more so for the nation, which now has registered more coronavirus infections and a higher death count of 140,800 than any other country.

McConnell and House GOP leader Kevin McCarthy huddled with Trump, Vice President Mike Pence, Treasury Secretary Steven Mnuchin and acting chief of staff Mark Meadows.

Mnuchin vowed passage by month’s end, as earlier benefits expire, and said he expected a fresh $1 trillion jolt of business tax breaks and other aid would have a “big impact” on the struggling economy.

Back at the Capitol, McConnell downplayed his proposal as simply a “starting point” for eventual discussions. Not only does he face pressure from the White House, but splits within his ranks have chiseled away at his majority power and left him relying on Democrats for votes.

The package from McConnell, being crafted behind closed doors, is expected to include $75 billion to help schools reopen. It will likely replace an expiring $600 weekly unemployment benefits boost with a smaller amount, send a fresh round of direct $1,200 cash payments to Americans below a certain income level, and create a sweeping five-year liability shield against coronavirus lawsuits.

But the administration was panning the proposal’s $25 billion in new funds for virus testing and tracing, said two Republicans familiar with ongoing discussions but granted anonymity to discuss them. McCarthy said Trump’s push for a payroll tax break is included in the bill.

GOP senators swiftly pushed back as the Republicans and the White House battle over priorities.

Sen. Lamar Alexander of Tennessee, the chairman of the Health committee, said, “All roads to opening school, going back to work, opening child care lead through testing.”

GOP Sen. John Cornyn of Texas was among several Republicans saying he’s “not a fan” of a payroll tax holiday.

Easing the payroll tax is dividing Trump’s party because that tax is used to finance Social Security and Medicare. Cutting it adds to the nation’s rising debt load at a time when conservatives are wary of any new spending, and the break does little for out-of-work Americans. McConnell is straining to keep the bill’s total price tag at $1 trillion

Trump insisted again Sunday that the virus would “disappear,” but the president’s view did not at all match projections from the leading health professionals straining to halt the alarming U.S. caseload and death toll.

On a conference call with the nation’s governors Monday, Pence called the rising numbers in Sunbelt states “serious.” And a somber McConnell said in his home state of Kentucky last week, “it’s not going to magically disappear.”

Senate Democratic Leader Chuck Schumer warned Monday his side will block any effort from McConnell that falls short.

The New York Democrat is reviving his strategy from the last virus aid bill that forced Republicans to the negotiating table after McConnell’s original bill was opposed by Democrats. This time, the House has approved Pelosi’s sweeping $3 trillion effort, giving Democrats momentum heading into negotiations.

Joe Biden, the Democrats’ presumed presidential nominee, stated his own priorities. The new package should “deliver a lifeline to those who need it most: working families and small businesses,” he said.

Trump raised alarms on Capitol Hill when he suggested last month at a rally in Oklahoma that he wanted to slow virus testing. Testing is seen as the best way to track and trace the virus to contain its spread. One of the Republicans familiar with the aid-legislation process said about half of the $25 billion previously approved remains unspent. Senate Democrats are investigating why the administration has left so much on the table.

During Monday’s White House meeting, Trump put economist Art Laffer on speaker phone to discuss a health care provision backed by Newt Gingrich and key conservatives, according to a person familiar with the exchange and granted anonymity to discuss it. It would require hospitals and providers to disclose some prices to patients before receiving medical care, putting Trump’s executive actions into law.

The proposed virus aid package would be the fifth, following the $2.2 trillion bill passed in March, the largest U.S. intervention of its kind. While many Republicans hoped the virus would ease and economy rebound, it’s become clear more aid is needed as the first round of relief runs out.

With 17 straight weeks of unemployment claims topping 1 million — typically about 200,000 — many households are facing a cash difficulties and losing employer-backed health insurance.

Despite flickers of an economic upswing as states eased stay-at-home orders in May and June, a federal ban on evictions from millions of rental units is about to expire and the jobless rate has remained in double digits, higher than it ever was in the last decade’s Great Recession.

Pelosi’s bill, approved in May, includes $75 billion for virus testing and tracing, funnels $100 billion to schools to safely reopen and calls for $1 trillion to be sent to cash-strapped states to pay essential workers and prevent layoffs. The measure would give cash stipends to Americans, and bolster rental and mortgage and other safety net protections.

In the two months since Pelosi’s bill passed, the U.S. has had 50,000 more deaths and 2 million more infections.