After appearing to be nearing a deal for the past week, progress appeared to come to a halt on Thursday, with Democrats and Republicans again divided on the scope and size of a possible deal.
Republican Senate Majority Leader Mitch McConnell’s office on Wednesday night told staff for the other three congressional leaders that he sees no possible path to an agreement on state and local aid and liability protections, according to a senior Democrat familiar with the conversations.
McConnell has already said he would set aside the two most contentious issues, including his top priority to get liability protections, to allow the rest of the deal to move forward, including assistance to small businesses and unemployment insurance.
His office declined to confirm or deny that McConnell poured cold water on the progress of the deal.
Democratic House Speaker Nancy Pelosi blasted McConnell's offer to scrap state aid, and on Thursday called his proposed liability shield for employers “an assault on American workers.”
The two leaders have acknowledged that getting to a deal is a top priority. But by the end of Thursday there was no apparent path to breaking the logjam with Congress expected to impose new government funding deadline next Friday.
"What I’ve suggested to them internally, and suggest to you publicly, is why don't we set aside the two obviously most contentious issues," McConnell said Tuesday. "We know we're going to be confronted with another request after the first of the year, we'll live to fight those another day, and pass the things that we agree on."
Democrats say McConnell's proposal won't work because state aid is essential to fund vaccine distribution, a process that the Trump administration has largely left to state governments to figure out.
In a small sign of progress, the group has reached agreement on how to allocate $160 billion to states and local governments, according to two sources familiar with the negotiations.
There is no agreement on the liability portion, with one person involved in the negotiations describing the status as “stuck.” The negotiating group is also talking to the Chamber of Commerce and the Business Roundtable, the two business lobbying titans of Washington, according to two sources familiar.
The negotiating group was planning to talk again Thursday afternoon.
Any bill needs McConnell’s sign-off to get a Senate vote.
One senior Republican staffer said talks are focused on the scope and length of the liability protections. Democrats want states to have more flexibility instead of establishing a federal standard.
In an ominous sign for a deal, party leaders are publicly sniping at each other.
McConnell said Thursday that Democrats “want to pretend they're bravely fighting big corporations” by opposing liability protections, “but they're really bullying small business owners and college presidents who have been pleading for these protections for months.”
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Senate Minority Leader Chuck Schumer, D-N.Y., accused him of blocking the only viable deal.
“Everyone knows that this bipartisan proposal is the only real game in town at the moment,” Schumer said. “Except Leader McConnell, who continues to stand in the way of bipartisan progress and who seems to wake up each morning with a new round of outlandish reasons why Democrats are somehow to blame for all the world's ills.”
Matt House, a Democratic strategist and former aide to Schumer, said it has “been clear all along that Leader McConnell is for a skinny bill and nothing more.”
“Floating an alternative offer while there are good faith, bipartisan negotiations going on is an attempt to undermine, not empower those negotiations,” he said. “Now we've moved to the blame game phase of the cycle.”