Republicans introduce $1tn COVID-19 recovery plan

Republicans have proposed spending an additional $1tn (£776bn) to address the economic damage caused by the coronavirus pandemic. The plan includes $100bn for schools and issuing stimulus payments of up to $1,200 to most Americans.

Under the plan, the payment would replace a $600 boost to unemployment benefits during the pandemic. The proposal sets the stage for negotiations with Democrats who have called it “totally inadequate”.

The US has already spent more than $2.4tn on virus relief measures, sending billions of dollars in aid to businesses and individual households. But economists have warned since the spring that more would be necessary.

Senator Mitch McConnell said Republicans wanted to see how existing programs were working but had now produced a “tailored and targeted draft” to address the economic fallout of the pandemic.

The proposal would reduce the $600 weekly unemployment benefit supplement to $200 until states can set up a more targeted system that replaces 70% of a person’s previous wage.

The reduction reflects worries that the current benefits discourage workers from returning to work since an estimated two-thirds of recipients are getting more from unemployment than they did working.

Mr. McConnell said Republicans “want to continue” the unemployment supplement, which expires this week. “But we have to do it in a way that does not slow down reopening.”

As well as money for direct payments to families and to help schools, Republicans said they want to put in place legislation to shield businesses from workers’ coronavirus health claims.

Mr. McConnell said on Friday he expected the negotiations to take “a few weeks”. The senator will also need to persuade members of his own party, who are worried about rising levels of government debt and opposed to further spending.

“The answer to these challenges will not simply be shoveling cash out of Washington. The answer to these challenges will be getting people back to work,” Republican Senator Ted Cruz said.

Some Republicans had proposed fast-tracking some pieces of the legislation – an idea rejected by Democrats, who see that strategy as an effort to avoid including their priorities.