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As Coronavirus Spread, Largest Stimulus in History United a Polarized Senate


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WASHINGTON — As Senator Chuck Schumer walked the two miles from his apartment to the Capitol early Sunday morning, getting his steps in since the Senate gym had been shut down to stem the spread of the novel coronavirus, he knew he and his fellow Democrats had a momentous decision to make.

After 48 hours of intense bipartisan negotiations over a huge economic stabilization plan to respond to the pandemic, Republicans were insisting on a vote later that day to advance the package. Mr. Schumer, the Democratic leader, suspected Republicans would present Democrats with an unacceptable, take-it-or-leave it proposition and then dare them to stand in the way of a nearly $2 trillion measure everyone knew was desperately needed. As soon as he arrived at the Capitol, the choice was clear: Democrats would have to leave it.

During an 8:45 a.m. conference call with staff, Mr. Schumer, of New York, was startled to learn that Republicans had boosted to $500 billion the size of a bailout fund for distressed businesses, but failed to meet Democrats’ request to devote $150 billion to a “Marshall Plan” for hospitals on the front lines of the virus.

What was worse, the corporate aid came with little accountability over dollars to be doled out unsupervised by the Treasury Department — a red flag to Democrats after the 2008 Wall Street bailout, and one that would be particularly hard to accept given President Trump’s disdain for congressional oversight.

Mr. Schumer told his staff that the proposal was a nonstarter, and he directed them to quickly spread the word that Democrats would oppose the bill as it was, according to several people involved in the discussions who, like more than dozen lawmakers and senior officials interviewed for this story, spoke on the condition of anonymity to describe the roller coaster negotiations that led to the passage of the largest stimulus measure in modern American history.

Then he called his colleagues — including Senator Elizabeth Warren of Massachusetts, a former presidential candidate who is influential on the left — to alert them to what he saw as a Republican ploy to muscle through a corporate giveaway. Within hours, Ms. Warren declared on Twitter that she would oppose the “giant slush fund” and urged other Democrats to join her. On a conference call later that day, Senator Patty Murray of Washington, not known for a temper, said she would be “a damn no” on the bill and urged her colleagues to do the same, which they did unanimously in a vote that sent futures markets plummeting.

It was a shocking and politically perilous decision in the middle of a paralyzing national crisis, a moment when lawmakers are traditionally expected to put aside differences for the good of the country, or face a political backlash.

The move was particularly infuriating for Republicans who had been willing to momentarily abandon their small-government zeal and agree to large additions to safety-net programs, including direct payments to Americans and a substantial increase in jobless aid, in the interest of sealing a quick deal with Democrats. Senator Mitch McConnell, Republican of Kentucky and the majority leader, would later call it a “stupid vote,” but Democrats said it proved crucial.

“It showed McConnell that he was going to have to deal with us,” Mr. Schumer said.

The moment was a turning point for the rapid and fitful negotiations over the stimulus measure, which came together over a handful of frenzied days on Capitol Hill, as global markets convulsed with worry and lawmakers scrambled to agree before Covid-19 could infect their ranks and cripple Congress.

After days of intrigue, gamesmanship and partisan assaults, the Senate finally came together late Wednesday after nearly coming apart. As midnight was about to toll, lawmakers approved in an extraordinary 96-to-0 vote a $2 trillion package intended to get the nation through the crippling economic and health disruptions being inflicted on the world by the coronavirus.

The House is expected to approve it by voice vote on Friday, avoiding the need to force hundreds of lawmakers to jeopardize their own health and travel from homes around the county as tens of millions of Americans are required to shelter in place.

Credit…John Taggart for The New York Times

The bill came together despite a toxic dynamic between the two parties in the normally courtly Senate, where Mr. McConnell conceded from the start that quickly enacting a mammoth emergency government aid plan could be done only with the assent of Democrats.

In a private lunch the week before, where Republican senators dined in a larger-than-usual room to try to maintain social distance, Mr. McConnell told his colleagues that they would ultimately have to deal with “Cryin’ Chuck,” using Mr. Trump’s derisive nickname for the Democratic leader in an acid comment that caught the attention of some in the room.

“Sometimes the president has a good sense of humor,” Mr. McConnell said in an interview, acknowledging the dig. “It got a couple of laughs.”

But there was a more serious subtext: With Democrats in control of the House and Republicans wielding a thin majority in the Senate, Mr. Schumer would have to be accommodated in any final bill.

Mr. Trump had a hand in the agreement, if only by keeping his distance from the talks. At one point, Senator Patrick J. Toomey, Republican of Pennsylvania, and Steven Mnuchin, the Treasury secretary, called the White House to ask the president to weigh in on a dispute they were having about whether airlines should have to reimburse the government for aid.

Work it out yourselves, Mr. Trump told the pair on a conference call.

In the end, Democrats won what they saw as significant improvements in the measure through their resistance, including added funding for health care and unemployment along with more direct money to states. A key addition was tougher oversight on the corporate bailout fund, including an inspector general and congressionally appointed board to monitor it, disclosure requirements for businesses that benefited, and a prohibition on any of the money going to Mr. Trump’s family or his properties — although they could still potentially benefit from other provisions.

“We had to do the right thing,” Mr. Schumer said in an interview. “This bill was not going to be with us a matter of days, but for weeks, months and years. It is riskier to pass a really bad bill than to delay it.”

The giant and complex aid package known as Phase 3 was assembled and passed in remarkably short order given its scope — quick on the heels of two smaller but not insignificant aid packages.

Adding to the tense atmosphere as the measure hung in the balance, senators learned that one of their own — Senator Rand Paul, Republican of Kentucky — had tested positive for Covid-19 after going about his Senate business in proximity to his colleagues, even sneaking into the senators-only gym to swim laps in the pool. It was a surprising turn that crystallized the threat both to the nation and to the lawmakers as they remained at work on Capitol Hill.

The roots of the Senate fight dated to about 10 days earlier, when Mr. McConnell had ceded the task of finding consensus on an earlier relief measure to Mr. Mnuchin and Speaker Nancy Pelosi. The two spent so much time on the phone hammering out the deal — a bill that would provide hundreds of billions of dollars for provide paid leave, free coronavirus testing and food and health care aid to low-income Americans — that Ms. Pelosi arrived at a late-night news conference celebrating its passage missing a teal and gold earring, as it rolled under her desk during the many calls.

As the House was completing that package on March 13, Mr. McConnell canceled a recess set for the following week to give the Senate time to take it up. He then closed up shop for the weekend and flew home to Louisville with Justice Brett M. Kavanaugh of the Supreme Court, whose confirmation was the subject of a bitter Senate fight two years ago. They attended a ceremony installing a McConnell-backed federal judge, underscoring the leader’s well-known passion for judicial confirmations while giving the majority leader’s detractors a fat target. Democrats and their progressive allies accused him of not recognizing the urgency of the moment and taking a break, even though the House bill was not yet ready for Senate consideration.

Now the majority leader was determined to put his own stamp on the next economic aid plan, which was shaping up as far larger, and wanted to make sure Republicans controlled and got credit for the final product.

Republicans plunged ahead, pulling together their own ideas. On March 19, Mr. McConnell unveiled the Republican approach — a $1 trillion proposal that centered on $1,200 cash payments to working Americans to tide them over, guaranteed loans and large tax cuts for corporate America and a newly created program to provide grants to small businesses that kept their workers on the payroll.

Democrats had their own ideas, calling for a major infusion of cash to beleaguered hospitals and health care workers, more money for states and a major expansion of unemployment benefits — “unemployment on steroids” as Mr. Schumer called it — though they were not opposed to the cash payments. Democrats criticized the corporate aid in the Republican bill, saying they wanted restrictions on using the money for stock buybacks and raising executive pay among other conditions.

Democrats drew a particularly hard line on unemployment insurance, one Senate official said, with Mr. Schumer instructing his side to refuse to negotiate on the tax relief sought by Republicans until they had a deal on the jobless benefits. The idea was to boost the aid to the level of a laid-off worker’s pay, but when that proved logistically difficult, the two sides agreed on a $600 across-the-board supplement.

Lawmakers blew through a 5 p.m. Saturday deadline set by Mr. McConnell for getting their ideas into legislative form for a vote the next day. Still, as a handful of veteran Republican senators joined Mr. McConnell, Mr. Mnuchin and White House staff in Mr. McConnell’s office to assess the state of play, a sense of optimism prevailed. They believed they were on the cusp of a deal and that Democrats were comfortably on board.

“We all felt good, the people who were all working it out,” said Senator Lisa Murkowski, Republican of Alaska and the chairwoman of the Energy and Natural Resources Committee. Mr. McConnell issued a statement saying that because of the progress made, he had asked “chairmen to draft final legislative text that reflects their compromise products.”

The announcement alarmed Democrats, who were not yet satisfied with the deal, and Mr. Schumer’s spokesman issued a statement about 10:30 p.m. Saturday cautioning that there was “not yet an agreement, and we still have not seen large parts of the Republican draft.”

When Mr. Schumer saw it on Sunday morning, things went downhill fast. On her way into a meeting in Mr. McConnell’s office, Ms. Pelosi, who had returned from San Francisco in time to join the talks, threw cold water on the prospect for an agreement, saying that as far as she was concerned, the two sides remained apart.

Mr. Mnuchin opened the meeting by asserting that “essentially, it seems to me that we’ve reached a bipartisan agreement,” but Ms. Pelosi and Mr. Schumer balked and began outlining a number of issues that needed work in order to gain their support: expansion of unemployment insurance, additional funding for state and local governments, more aid to hospitals.

When Ms. Pelosi, who is Catholic, quoted Pope Francis and his prayer to “enlighten those responsible for the common good,” Mr. Mnuchin responded, “You quoted the pope, I’ll quote the markets,” she later recounted in televised interviews this week.

Mr. McConnell insisted that they would move ahead with a scheduled procedural vote later in the day. But as she left the room, Ms. Pelosi informed them that she would be introducing her own version shortly.

Republicans seized on Ms. Pelosi’s entry into the talks, claiming that the speaker had forced Democrats to abandon a compromise they had helped write.

“We tried to go forward on a totally bipartisan basis, and then leadership got ahold of it,” Mr. McConnell said in an interview.

Republicans were further outraged when they saw the draft House bill, a $2.5 trillion measure that included an array of progressive policies well beyond the scope of emergency aid, saying Democrats were trying to use the crisis to advance a liberal agenda. They seized on a comment by Representative James E. Clyburn of South Carolina, the No. 3 House Democrat, who said on a private conference call with Democrats that the pandemic presented “a tremendous opportunity to restructure things to our vision” — a comment Mr. McConnell brought up repeatedly.

As uncertainty swirled on Sunday in the Capitol over the fate of the legislation, Mr. Paul announced that he had tested positive for the disease. Senators were alarmed. The virus they were fighting was circulating among them.

Democrats quickly broke up their lunch and continued their discussion by conference call, and two Republican senators who had had contact with Mr. Paul, Mitt Romney and Mike Lee, both of Utah, quarantined themselves. It created another incentive for the Senate to bridge its divide as soon as possible to allow members — nearly half of them over 60 — to exit the capital.

And with members of the House falling ill and quarantine orders going into effect around the country, it was becoming clear that lawmakers from that chamber would not be returning to Washington to consider the plan. The emerging compromise would have to be acceptable enough to Democrats and Republicans that it could pass without a recorded vote.

In the Senate, Democrats’ vote to block the measure set off Republican rage, but also intensified round-the-clock negotiations to find an agreement. White House officials scrambled for a deal that would calm the markets.

“Failure could be catastrophic,” Eric Ueland, the legislative affairs director and a former top Senate aide, said as he shuttled offers and counteroffers between Mr. McConnell’s office and Mr. Schumer’s suite a short walk away on the second floor of the Capitol.

Tensions reached a breaking point on the Senate floor on Monday as Republicans assailed Democrats for holding up the aid even as Mr. Schumer and Mr. Mnuchin — now “Chuck and Steven” to one another — narrowed their differences just down the corridor. Democrats voted again to block the measure.

“This is disgraceful,” exclaimed Senator Susan Collins, Republican of Maine, in a lecture blasting the delay after Mr. Schumer objected to allowing her to speak.

After daylong negotiations on Tuesday, the two sides finally announced an agreement after midnight Wednesday and the final product drew praise and support at the White House from Mr. Mnuchin and Mr. Trump, who said the administration had been treated fairly by the Democrats.

But there was a final bit of drama as staff put the finishing touches on the 880-page bill. A group of Republican senators including Lindsey Graham of South Carolina and Ben Sasse of Nebraska objected to granting workers the extra $600 a week in unemployment benefits, arguing that it would encourage layoffs and discourage workers whose wages would be lower than the aid level from seeking jobs.

“They are very upset that somebody who is making 10, 12 bucks an hour might end up with a paycheck for four months that is more than they received last week — Oh, my God, the universe is collapsing,” said Senator Bernie Sanders, independent of Vermont and a contender for the Democratic presidential nomination. He also said that the bill was too slanted to big corporations, but that it was worthy of support.

A bid by Mr. Sasse to remove the extra jobless aid was defeated, though widely supported by Republicans. He summed up the sentiment of many in his party when he said of Mr. Sanders: “I appreciate his candor in admitting that this is kind of a big crap sandwich.”

In the end, however, no senator wanted to reject it. Every one of them voted “yes.”

Jim Tankersley and Catie Edmondson contributed reporting.

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