03:08 - Source: CNN
How the USPS became a political battleground
CNN  — 

Senate Republicans have drafted a scaled-back coronavirus relief proposal as talks between Democrats and the White House remain stalled.

While the proposal isn’t expected to be considered anytime soon – the US Senate remains adjourned for summer recess – it serves as a new marker for a conference that has been fractious and divided throughout the coronavirus relief talks. It also marks the latest effort to jar loose talks on economic relief that have only grown further from a resolution as the weeks have passed.

The draft measure also includes $10 billion in funding for the US Postal Service, which has become a political flashpoint over the last several weeks due to operational changes that have led to allegations of deliberately slowed service.

The proposal is a “skinny” version of the $1 trillion Senate GOP measure introduced last month and would include key elements like liability protection, $105 billion for schools and a second round of Paycheck Protection Program loans. It also would include an extension of the enhanced federal unemployment benefit, but at a reduced level of $300 a week. The benefit, which lapsed at the end of July, was set in the $2.2 trillion CARES Act at a flat rate of $600 a week.

For the Trump administration and lawmakers, the failure up to this point to secure agreement on a second major stimulus package has left significant questions about what’s next for a US economy still facing significant issues due to the pandemic. The first major package, signed into law in March after near unanimous support on Capitol Hill, served as a primary driver of consumer spending because of the direct payments to individuals and the enhanced federal unemployment benefit. The Paycheck Protection Program served as a lifeline for millions of businesses.

But the divisions between the two parties – and among Republicans themselves – have served to short-circuit talks up to this point. Democrats have insisted on a topline of above $2 trillion that includes nearly $1 trillion for state and local governments. The White House insists that is a nonstarter.

“There’s a deal to do here if the Democrats want to be reasonable,” Treasury Secretary Steven Mnuchin said Tuesday in an interview on CNBC.

The White House and Republicans have repeatedly proposed scaling back the talks and passing a smaller-bore proposal as negotiations continued on more contentious items. Democrats have rejected a piecemeal approach, making clear they won’t agree to anything that doesn’t address their full view of the current needs.

House Speaker Nancy Pelosi, in a Politico Playbook interview later Tuesday, said Democrats were still looking for an agreement in the near term – and she continued to resist the idea that any relief efforts would need to be packaged into a funding measure before the fiscal year deadline at the end of September.

“I don’t want to have to wait until the (continuing resolution) at the end of September. More people will die, more jobs will be lost,” said Pelosi, a California Democrat. “We have to try to come to that agreement now. All they have to do is recognize the need. We’re willing to cut our bill in half to meet the needs right now.”

The overall Senate GOP draft proposal, which runs 169 pages, is expected to serve as a discussion point among Senate Republicans in the weeks ahead, with the idea being that it could be considered upon their return to Washington in September, according to GOP aides. It also serves as an additional element for White House and Democratic negotiators to consider.

The $10 billion funding level for the Postal Service is a nod to the tentative agreement reached between Democratic and White House negotiators and will allow Republicans to point to the measure as a way to address calls for congressional action as the election approaches.