No Agreement on Covid-Aid Liability Reached

“We couldn’t quite get to the conclusion,” Sen. Angus King (I., Maine), who had been involved in the liability negotiations, said Monday.

The government’s current funding expires this weekend, setting up a deadline for months of grinding talks over how to craft an aid bill responding to the pandemic and its mounting death toll and economic pain. On Monday, the Covid-19 death toll in the U.S. reached over 300,000, just as the first doses of a vaccine were administered.

Democratic leaders hadn’t signaled Monday evening if they were ready to proceed with a smaller package focused on items with broad bipartisan support, such as aid for small businesses, vaccine distribution and unemployed workers, but they hadn’t ruled it out.

“I very much support state and local” funding, House Speaker Nancy Pelosi (D., Calif.) told reporters Monday but declined to answer whether she would hold out for a package this week that included it. “We are in negotiations,” she said.

While the bipartisan group said it reached consensus on state and local funding, Sen. Joe Manchin (D., W.Va.) was the only Democrat in the rank-and-file group to sign onto a GOP proposal creating a nationwide gross negligence standard in coronavirus-related lawsuits. Lawmakers said they would continue discussions to try to reach a broader compromise but acknowledged they were running out of time.

Sen. John Cornyn of Texas, a member of GOP leadership, said he expected congressional leaders would leave out those two components “in order to reach consensus, knowing we’re going to have to revisit this again next year. That seems like the glide path to me.”

Senate Majority Leader Mitch McConnell (R., Ky.) last week urged lawmakers to leave behind funding for state and local governments, as well as the liability protections he had long sought. But many in the bipartisan group pushed to include both in any agreement, noting that each party would swallow one difficult issue in exchange for a priority.

“That’s the trade-off,” said Sen. Mitt Romney (R., Utah).

Lawmakers in the bipartisan group, which includes senators and members of the Problem Solvers Caucus from the House, on Monday bundled the liability and state and local funding provisions together in one bill. The less controversial provisions of their agreement are combined in a separate $748 billion bill. It includes $300 a week to fund state unemployment benefits for four months, $300 billion in aid to small businesses, $16 billion for vaccine distribution, as well as testing and tracing and $35 billion for health-care providers, among other measures.

Some Democrats in the group said coalescing around the $748 billion bill was the most likely path forward.

Mr. McConnell said Monday that Congress should quickly pass a bill that focuses on common ground between the two parties. He again criticized funding for state and local governments, arguing that sending state and local governments money specifically for vaccine development was the most pressing need.

“This is the support that state and local governments need most urgently, not unfettered slush funds for non-Covid-related needs that predate the pandemic, but incredibly urgent targeted money to get citizens vaccinated,” he said Monday.

The liability protection proposal that Mr. Manchin signed onto along Republicans creates a nationwide gross negligence standard in coronavirus-related lawsuits. Businesses, schools or health care providers sued for alleged coronavirus exposure or medical malpractice could also remove suits to federal court.

The protections would apply from December 2019 until either one year after they were enacted or the end of the coronavirus public-health emergency. In several aspects, including the creation of a gross negligence standard, the bipartisan proposal resembles the offer of Mr. McConnell’s offer on liabilities, though his plan lasts set to last through December 2024 or the end of the public health emergency. Staff for Mr. McConnell told Democratic leadership aides last week that the liability proposals the bipartisan group was discussing wouldn’t be robust enough to win Republican support.

Democrats said the proposal didn’t achieve the balance they sought.

“All I can say is fundamental to this conversation is fairness,” between businesses and plaintiffs in any litigation, Sen. Dick Durbin (D., Ill.) said. “We’ve got to be able to find a middle ground here, strike a middle ground that’s fair to both.”

Republicans have said robust liability protections are needed so that businesses, schools and nonprofits can operate without the threat of litigation and jump-start economic growth. Democrats argued that businesses shouldn’t be given permission to relax safety precautions and that relatively few coronavirus-related lawsuits have been filed.

More than 6,500 such complaints have been filed across the country, according to a litigation database maintained by law firm Hunton Andrews Kurth LLP, but many of those cases aren’t related to tort liability for exposure.

The bipartisan group found more consensus around funding for state and local governments. Their proposal calls for sending $152 billion to state and local governments and $8 billion to tribal entities. The scheme would distribute one-third of the money for states based on population, while the other two-thirds of the money would be parceled out to states based on their revenue losses during the pandemic. Every state would receive at least $500 million in federal help, and states must distribute 40% of their funding to local governments.

Nationwide, the U.S. state budget shortfall from 2020 through 2022 could amount to about $434 billion, according to data from Moody’s Analytics.

Write to Kristina Peterson at [email protected] and Andrew Duehren at [email protected]