August 25, 2020 – Negotiations in Congress regarding additional coronavirus stimulus remain fluid and uncertain. The sides have seemingly reached a stalemate, and there have been no high-profile talks for over two weeks. Senate Republicans released a draft proposal for a narrow COVID-19 relief package, the “Delivering Immediate Relief to America’s Families, Schools and Small Businesses Act” on August 18. The draft represents a scaled-back, or “skinny,” version of the HEALS Act. The package does not include any tax provisions such as the expansion to the employee retention credit found in both the House HEROES Act and the Senate HEALS Act, nor the expansion of the Work Opportunity Tax Credit found in the HEALS Act. Some analysts believe the absence of tax provisions is for technical and not ideological reasons.
Republican negotiators have been arguing for a long time that Congress should pass narrow legislation to address the most urgent issues about which there is the greatest consensus. Democrats have resisted this suggestion, realizing that they will unlikely be able to pass the more expansive components of their agenda without the pressure of those urgent items. However, over the weekend, House Democrats passed a standalone bill to provide $25 billion in aid to the Postal Service, a component of the HEROES Act. Republicans are likely to seize on this action as an indication that Democrats are, in fact, willing to pass more narrow legislation for the most urgent items.
In order to fund the government and prevent a shut-down, Congress must pass a continuing resolution by September 30. This “must pass” legislation has become the most likely vehicle for any possible COVID-19 relief package prior to the election.
A group of House Democrats are urging Speaker Pelosi to prioritize the expansion of the employee retention credit. Both the ERC and WOTC expansions have bipartisan support and are likely to appear in any negotiated COVID-19 stimulus legislation.