There is no clear endgame on Congress and the President reaching agreement on additional coronavirus spending (and maybe other items) that can be attached to a year-end omnibus appropriations measure, and the deadline for extending government funding is set to be pushed back from December 11 to December 18 via a one-week stopgap continuing resolution (CR). A main sticking point: the bipartisan Senate group that outlined $908 billion in coronavirus spending has not been able to negotiate an approach to coronavirus liability protection that Republicans want in exchange for state and local funding sought by Democrats.

Senate Majority Leader Mitch McConnell (R-KY) suggested December 8 that both items be dropped from the current discussions and that Congress process a bill only on areas of agreement. "What's the way forward? We know the new administration's going to be asking for another package. What I recommend is we set aside liability and set aside state and local and pass those things we can agree on, knowing full well we'll be back at this after the first of the year," Senator McConnell said during the weekly Tuesday press availability.

Senate Democratic leader Chuck Schumer (D-NY) said withholding state and local funding hurts people like firefighters, and tweeted, "Imagine holding emergency aid hostage — help for the unemployed, small businesses, first responders, people, funding to deliver a vaccine — to give corporations legal immunity."

Later December 8, Treasury Secretary Steven Mnuchin announced he had presented to Democratic leaders a $916 billion proposal, reviewed by Senator McConnell and President Trump, that includes state and local funding. The plan reportedly calls for $600 stimulus checks but omits an unemployment add-on, cutting the $180 billion UI piece in the bipartisan bill down to $40 billion. House Speaker Nancy Pelosi (D-CA) and Senator Schumer said, "While it is progress that Leader McConnell has signed off on a $916 billion offer that is based off of the bipartisan framework, the President's proposal must not be allowed to obstruct the bipartisan Congressional talks that are underway … [which] are the best hope for a bipartisan solution."

Below is a comparison of some top issues in the proposals, with some details gleaned from press reports.

If a deal comes together that allows for tax provisions, a proposal to provide some state and local tax certainty for employers and employees relating to employees that have been working in 2020 in locations other than their normal place of work will face an uphill climb due to Senator Schumer's resistance, Senator John Thune (R-SD), a sponsor of the proposal, said during the GOP news conference. "[T]here ought to be a provision in this legislation that makes it clear that … people who are frankly working remotely and have tax consequences as a result of that don't get hit with a big fat tax bill by some state. New York is a good case in point and I would hope that we could get that done and I think we can if Senator Schumer … the state of New York is one of the biggest culprits when it comes to taxing people who work 'mobile-y' — if he would back down and allow this to be included in this package, it would be of immense help." Expiring tax provisions could also be extended as part of a final agreement.

The House is set to vote today (Wednesday) on the "Further Continuing Appropriations Act, 2021, and Other Extensions Act" (H.R. 8900), a CR through December 18 plus health extenders. A Senate vote will follow later this week.

NDAA

By a vote of 335-78, the House December 8 passed the conference report for H.R. 6396, the National Defense Authorization Act (NDAA), which includes key language establishing a regime requiring smaller businesses to disclose their beneficial owners to the Treasury Department's Financial Crimes Enforcement Network (FinCEN) as well as an overhaul of anti-money laundering (AML) laws for financial institutions. The Senate is expected to take up the bill later this week. President Trump has threatened to veto the conference report unless conferees added language eliminating "Section 230" liability protections for social media companies, as well as other issues such as language stripping Confederate names from military bases, though the House-Senate NDAA conference committee made no such changes to the text. The vote margin was well over the two-thirds supermajority the House would need to override a veto.

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