Republicans present new stimulus proposal that reduces unemployment benefits

This would be the new US economic stimulus plan 1:34

(CNN) –– Senate Republicans formally presented Monday their proposal for a new stimulus to the coronavirus pandemic, which includes a $ 400 reduction in improved unemployment benefits. The plan will serve as an initial offer for bipartisan negotiations with Democrats, as Congress tries to respond to the health and economic crisis caused by covid-19.

Senate Majority Leader Mitch McConnell noted on Capitol Hill that "the American people need more help." And he added the Republican proposal will be called the HEALS Act, whose acronym stands for health, financial assistance, liability protection and schools.

The bill will include a variety of components, which Republican senators and the committee chairman announced in a series of speeches Monday night. The measures include liability protections, a second round of direct payments to Americans, and a second round of Check Payment Protection Program (PPP) loans, aimed at helping the most affected small businesses because of the pandemic they can stay afloat.

• READ: Republicans to include $ 1,200 checks and smaller federal unemployment aid in new stimulus proposal

Perhaps the most controversial immediate aspect of the Republican proposal is that it includes a $ 400 reduction in improved unemployment assistance for Americans without jobs, a move that generated a negative response from Democrats.

The plan would reduce federal unemployment benefits - which will expire later this week - from $ 600 to $ 200, as states transition to implement a system that seeks to provide approximately 70% wage replacement for dismissed workers.

“Just like the CARES Act in March, Senate Republicans have created another bold plan to help our nation. So now we need our Democratic colleagues to take their part, too, "McConnell said. And he also asked the legislators of the other party to "put aside partisan obstructions" and "rediscover the sense of urgency that made the CARES Law reach the finish line."

McConnell has said he hopes that in the next two to three weeks the Senate can bring the new coronavirus relief bill to the House.

However, Democrats are already unified around their own initial plan: a $ 3 trillion proposal that was passed by the House last May. For his part, Senate Minority Leader Chuck Schumer quickly denounced the Senate Republican Stimulus Plan, describing it as a "half-hearted, halfhearted legislative proposal," which has "too little, too late." .

"The lack of any urgency, understanding, and empathy for people who need help from Republicans in the Senate has brought us to a very precarious time," Schumer said.

Initially, the Republican plan was expected to be released last week, but it was delayed amid disputes and resistance.

The upcoming negotiations are expected to be difficult, given that Democrats and Republicans are a long way from each other on the main numbers and specific details in their proposals.

Schumer was especially critical of the reduction in unemployment assistance: "The Republican proposal on unemployment benefits, to put it simply, is unfeasible." The Senate added that "the idea that we need to dramatically reduce this assistance because workers will stay home otherwise is quite exaggerated."

What does the proposal include?

Republican Senator Susan Collins of Maine outlined on Capitol Hill Monday how the proposed legislation would update and repeat the Check Payment Protection Program.

According to Collins, the plan "would allow the most affected small employers, those whose incomes have decreased by 50% or even more, to receive a second forgivable PPP loan." Collins added that "to ensure that we are targeting assistance to employers who need help the most, we limit those second loans to small businesses with 300 workers or less."

Senate Finance Committee Chairman Chuck Grassley, R-Iowa, described what the second round of direct payments to Americans will look like, which will be at the same level as the previous measure. Precisely, he said that the plan "foresees another round of $ 1,200 of payments due to the economic impact for the majority of American adults."

Republican Senator Richard Shelby of Alabama, chairman of the Appropriations Commission, discussed other key components of the package, including funding for coronavirus testing and education.

“First, $ 16 billion goes for states to increase testing with a particular emphasis on schools, employers, child care centers, and nursing homes. Second, $ 26 billion will go toward the development and distribution of vaccines, therapies, and diagnostics, "Shelby said. "Third, there is $ 105 billion for the educational stabilization fund that seeks to help schools adapt to the circumstances they face, which are extraordinary," he added.

Shelby also added: "This legislation provides additional funds for K-12 schools to get children back into the classroom at least 50% of the time, which would be a great start."

Senator John Cornyn, a Republican from Texas, outlined the liability protections that will be included in the plan, warning that "without congressional action, the litigation epidemic can potentially sink the various businesses and companies we hope to sustain." Cornyn said the proposal "will ensure that those who operate in good faith and follow all relevant guidelines cannot be sued out of existence."

"A starting point"

Republicans also face a division within their own ranks, as some senators have been wary of spending additional money as they have worked to draft a proposal, in addition to the billions of pandemic aid that lawmakers have already enacted.

Republican Senator Ted Cruz of Texas said Monday that he expects "significant resistance" from Republicans to the proposed stimulus bill.

"There is significant resistance to another trillion dollars. The answer to these challenges will not simply be to get money out of Washington, the answer to these challenges will be to get people back to work. And as it stands now, I think several Republicans are likely to oppose this bill and express serious concerns, "he said.

McConnell, after presenting the Republican stimulus proposal, described the plan as "a starting point," and acknowledged that Democrats will be needed to bring anything to the President's desk, and that more negotiations are ahead.

“Every bill has to start somewhere. Republicans are a majority in the Senate. This is a starting point. You will have many stories to cover along the way as we have these discussions back and forth across party lines and with the administration, ”he said.

Ian Sloan and Ted Barrett, both from CNN, contributed to this report.

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