Mitch McConnell hasn't endorsed the $908 billion stimulus compromise. Here's what's at stake if the talks fall apart.

Photo By Tom Williams/CQ-Roll Call, Inc via Getty Images/
  • McConnell has not endorsed the $US908 billion economic rescue package, jeopardizing ongoing relief talks.
  • Pressure is mounting on Congress to approve an economic rescue package and get federal aid out the door quickly as coronavirus cases continue to rise and states renew restrictions.
  • If lawmakers fail to authorise a deal, an eviction moratorium will expire, while 12 million people could lose all jobless aid by the end of the year.
  • Visit Business Insider’s homepage for more stories.

Negotiations on another bipartisan stimulus package are ongoing on Capitol Hill, but have yet to gain the support of a critical player.

Senate Majority Leader Mitch McConnell has not endorsed the $US908 billion economic aid plan, which Democratic congressional leaders threw their support behind last week. On Tuesday, he offered to drop two of the most contentious measures — state and local aid and a liability shield for businesses — until early next year when it could be addressed in another aid package.

Democrats rejected the move. McConnell, though, supports a $US550 billion plan that would mostly direct federal dollars to small businesses and schools. Republicans have also pressed to include a liability shield to guard firms from coronavirus-related lawsuits.

“There’s reporting that we are close to a deal, I wish that were the case,” Sen. John Kennedy told Capitol Hill reporters on Tuesday. “We do not have our ducks in a row. We don’t know where our ducks are, we’re stuck.”

Pressure has mounted on Congress to strike a deal and get federal aid out the door quickly as cases spike and unemployment remains well above pre-pandemic levels. Democrats argue the dire situation demands a large spending bill to contain the economic devastation.

“Mitch McConnell is forcing a half measure, or more likely, a quarter measure that’s going to leave a lot of empty stockings at the end of the year,” Sen. Ron Wyden, ranking Democrat on the Senate Finance Committee, told Business Insider on Monday. He added he was growing anxious about “a tsunami of evictions.”

Here’s a run-down of the high stakes if lawmakers fail to approve another economic relief package by the end of the year.

Nearly 12 million people could lose all jobless aid

Earlier this year, Congress and President Donald Trump approved an expansion of unemployment benefits to help people weather the fallout of the pandemic. The federal government tacked on an extra $US600 to weekly state unemployment checks and added 13 more weeks to regular base benefits.

The federal benefit expired as Congress failed to strike a deal to replace that amount. Now 12 million people are threatened with the loss of all their unemployment assistance the day after Christmas. Many of them are gig workers and contractors benefiting from Pandemic Unemployment Assistance, which expires Dec. 31.

“I think it’s ridiculous we have to fight this hard. Right now during this pandemic, people are just trying to survive,” Stephanie Freed, the co-director of ExtendPUA, an advocacy group for unemployed gig workers, told Business Insider. “We shouldn’t also be thinking: ‘What’s a new way I can appeal to my senator to make them care about the fact people don’t have enough to eat.'”

A moratorium on evictions is ending on December 31

An eviction moratorium already extended by Trump in September will lapse at the end of the year. The measure is designed to protect people in all residential properties, though it didn’t provide renters with cash to make up for missed monthly payments.

It’s expiration would put between 30 and 40 million renters at risk of losing their homes — and that may worsen the public health situation.

A new study from a group of researchers at John Hopkins University, Boston University, the University of California Los Angeles and Wake Forest School of Law indicated that at least 10,000 COVID-19 deaths in the US resulted from evictions this year.

Paid leave will expire for millions of Americans

Congress also approved a new federal paid sick and family leave program which now covers about half the American work force. Small employers are required to provide two weeks of paid sick leave and then 10 weeks for paid family and medical leave under the Families First Act.

That is set to end, and up to 87 million workers could be deprived of the benefit.

States would return unused federal relief funds

State and local governments would return unspent government aid funds from the CARES Act, even if it was already allocated for rental assistance, business aid, and virus testing and tracing. The law provided states with $US150 billion for coronavirus-related spending, but their needs have grown as the year progressed.

The pandemic ripped a large hole in state and municipal finances which may be hard to plug without federal aid, experts say, a result of falling revenue from sales and income taxes. The Brookings Institute projected state and local government revenues would decline $US155 billion in 2020 and $US167 billion next year.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.