KEY POINTS

  • Democrats and Republicans agree on the need for another stimulus check
  • Senate GOP wants a $1 trillion package, while Democrats have proposed $3 trillion 
  • GOP senators are citing renewed concerns over the budget-busting potential of the HEROES Act
  • Congress is rushing to get the job done by mid-August or earlier

Senate Republicans are setting the stage for a hard battle against Senate Democrats as they begin their push for a fourth coronavirus stimulus package worth $1 trillion, which is a third of the $3 trillion proposed by the Democrats in their HEROES Act.

The White House wants to limit the next coronavirus relief package to $1 trillion or less. Officials believe it might lose the support of fiscally conservative Senate Republicans if the latest spending bill exceeds $1 trillion, Fox News reported. Conservative Republicans are aghast at the unprecedented spending levels and its ballooning effect on the already massive federal debt, which now stands at $26.5 trillion. In contrast, the entire U.S. GDP for 2019 was $21.4 trillion.

GOP senators are citing renewed concerns over the budget-busting potential of the spending proposed by the HEROES Act (H.R.6800). The Act was passed by the House of Representatives on May 15. Senate Majority Leader Mitch McConnell, R-Ky., immediately assailed the bill, calling it "dead on arrival" in the Senate and blasting it as a "liberal wish list."

Getting Trump to approve the fourth stimulus package will top Congress' agenda at the end of the month when lawmakers return to Washington, D.C., from their two-week Fourth of July break. The House will return Aug. 3 and the Senate will follow a week later. McConnell said he wants to finish work on the fourth stimulus package by then.

The very tight schedules have led Democrats to urge McConnell to bring the Senate back to the Capitol to take up the fourth package. Sen. Richard Blumenthal, D-Conn., asked McConnell to cancel the rest of the Senate’s July 4 recess so the chamber can take up the package. Sen. Chris Van Hollen, D-Md., said senators have work that can’t wait.

“The virus isn’t stopping and so Congress shouldn’t stop,” said Van Hollen. “Mitch McConnell on the other hand decided to take time out.”

Data from the Congressional Budget Office (CBO) shows that in the first eight months of the fiscal year (October 2019 to May 2020), the U.S. deficit soared to $1.9 trillion. The federal deficit for fiscal 2020 is expected to jump to $3.7 trillion, a record high. The existing record for a fiscal year deficit is $1.41 trillion in 2009.

U.S. Senate Majority Leader Mitch McConnell is among the prominent Republicans to don masks as the US coronavirus outbreak worsens U.S. Senate Majority Leader Mitch McConnell is among the prominent Republicans to don masks as the US coronavirus outbreak worsens Photo: GETTY IMAGES NORTH AMERICA / ALEX WONG

"Hopefully we’ll learn from our first three bills in terms of what works and what doesn’t," Fox News reported Sen. John Kennedy, R-La., as saying.

"The undercurrent here, at least on my side of the aisle, is the fact that we owe $3 trillion and climbing. This is real debt. And that doesn’t even include the $3 trillion we added to Federal Reserve balance sheet," he said.

Democrats and Republicans will haggle long and hard over the final shape of the fourth stimulus package. But they both agree on the need for another stimulus check for individuals earning less than $40,000 a year.

On the other hand, Republicans are interested in targeted relief for hard-hit industries like hotels and restaurants. They want money for this to come from the Paycheck Protection Program (PPP), the $660 billion fund meant to keep small businesses afloat and avert mass layoffs during the crisis. PPP expired June 30 but Congress voted lasst week to extend the application period for the program until Aug. 8.

GOP senators and the Trump administration want to build new programs that expand the use of the funds. They would allow chambers of commerce to apply for aid. They also want $25 billion for businesses with fewer than 10 employees and prevent hotel or restaurant chains from receiving more than $2 million.

The Democrats' HEROES Act will provide up to $1,200 in payments (or $2,400 for married couples) to individuals. It will provide an extra $1,200 per dependent up to a maximum of three. The income thresholds are the same as in the CARES Act.

HEROES passed the House by a vote of 208 to 199 and is now with the Republican-controlled Senate. Back in May, Senate Republicans said they aren't interested in negotiating another relief package for taxpayers and wanted to hit the pause button on approving more funding.