• Senate Majority Leader Mitch McConnell says he wants Congress to pass a coronavirus relief bill with neither legal immunity for businesses nor state and local government relief.
• Congress is trying to come to agreement on coronavirus relief and government funding before the end of the year.
• Stimulus checks, liability protections and state and local aid are some of the biggest sticking points remaining in discussions.
• If Congress does not pass new relief, about 12 million people could lose unemployment benefits and millions could face the threat of eviction.

Senate Majority Leader Mitch McConnell on Tuesday backed off his demand for businesses to get coronavirus-related liability protections as part of a year-end rescue package.

The Kentucky Republican urged Congress to pass an aid bill that contains neither legal immunity nor state and local government support, two roadblocks to lawmakers striking a relief deal.

"What I recommend is we set aside liability and set aside state and local, and pass those things that we can agree on knowing full well we'll be back at this after the 1^st of the year" during the transition to President-elect Joe Biden's administration, McConnell told reporters on Tuesday.

Democratic leaders, who oppose a liability shield, quickly rejected the tradeoff. Senate Minority Leader Chuck Schumer, D-N.Y., told reporters a lack of state and local relief puts teacher and first responder jobs "in jeopardy" in cash-crunched areas of the country. He contended his GOP counterpart is "sabotaging" a bipartisan group negotiating a $908 billion aid proposal.

House Speaker Nancy Pelosi, D-Calif., said in a statement that "the bipartisan negotiations involving Senators and Members of the House have made good progress and must be allowed to proceed without Leader McConnell's obstruction."

In proposing to abandon both contentious issues, McConnell specifically mentioned a handful of areas where Republicans and Democrats have found consensus: Paycheck Protection Program small business loans, money for Covid-19 vaccine distribution and aid for health-care providers, among "a variety of other things that are not controversial." He did not say where he currently stands on direct payments to Americans.

Congressional Democrats, some Republicans and the Trump administration back another stimulus check after the federal government sent $1,200 payments to most Americans earlier this year. Several Senate progressives and one GOP lawmaker have signaled they oppose a relief bill if it lacks a stimulus check.

If Congress resolves neither the liability protection or state and local aid issues this year, McConnell could try to use them as leverage in talks with the Biden administration. The incoming president has backed state and local relief.

Leaders in Washington hope to pass a rescue package before the end of the year after months of inaction. Failure to send more help before then could cut off unemployment benefits to about 12 million people and leave millions facing the threat of eviction.

To strike a deal in time, Republicans and Democrats still need to resolve major disputes over how best to buoy the economy and health-care system. Lawmakers plan to buy themselves more time to reach both pandemic aid and spending agreements by approving a one-week continuing resolution to keep the government funded through Dec. 18.

Officials have put forward a bevy of proposals during the rush to approve aid. Treasury Secretary Steven Mnuchin added one more to the mix on Tuesday: a $916 billion offer made to Pelosi during a phone call.

He said it includes "money for state and local governments and robust liability protections for businesses, schools and universities." Mnuchin added that he and White House chief of staff Mark Meadows reviewed the plan with President Donald Trump, McConnell and House Minority Leader Kevin McCarthy, R-Calif.

The Treasury secretary did not detail what else it includes. In a joint statement Tuesday night, Pelosi and Schumer said McConnell's decision to sign off on a $916 billion package represented "progress."

However, they said "the bipartisan talks [in Congress] are the best hope for a bipartisan solution." They called it "unacceptable" that the Trump administration would put $40 billion toward unemployment payments, less than a fourth of the $180 billion set out by the lawmakers engaged in talks.

The bipartisan group has worked for days to craft a compromise bill. The lawmakers aim to release more details about the proposal this week.

Democrats have embraced the plan as a foundation for talks with Republican leaders. Before Mnuchin put forward the latest White House proposal, McConnell had called for a roughly $500 billion "targeted" bill.

A daily average Covid-19 infection rate of more than 200,000 has overwhelmed hospitals across the country. States and cities have implemented new economic restrictions to slow cases in an already sluggish economy where roughly 20 million people are receiving unemployment benefits.

Where the plans stand

Congressional leaders have signaled they want to attach coronavirus relief measures to spending legislation. The move would allow Congress to approve both must-pass bills in one swoop.

Reaching agreement on both fronts is the hard part.

The bipartisan plan as first outlined last week would put nearly $300 billion into Paycheck Protection Program small business loans and $160 billion into support for state and local governments that may have to lay off workers. It would reinstate the federal unemployment insurance supplement at $300 per week and put funds into Covid-19 vaccine distribution, education and transportation, among other measures.

The proposal as initially unveiled would also give companies temporary federal liability from coronavirus-related lawsuits until states make their own laws. However, the negotiators have not resolved how to craft final text around legal protections and state and local aid, Democratic Sen. Joe Manchin of West Virginia said Tuesday.

Before Tuesday, McConnell had insisted on including a liability shield in a relief package. His most recent proposal included that provision, along with PPP loans and money for vaccine distribution and education. He has opposed new state and local relief.

Speaking on the Senate floor Tuesday, Schumer urged the GOP to abandon the push for legal immunity.

"The situation is really quite simple," he said. "There are glaring needs across the country, and we will need to work across party lines to pass legislation to meet those needs."

Stimulus checks have emerged as a make-or-break issue in a relief deal. Two senators — independent Bernie Sanders of Vermont and Republican Josh Hawley of Missouri — have signaled they oppose a package that does not include direct payments to families.

In a letter to colleagues Tuesday, Sanders and five Democratic senators said the bipartisan proposal "does not go anywhere near far enough," according to NBC News. The group, which includes Sens. Elizabeth Warren, D-Mass., Ron Wyden, D-Ore., Jeff Merkley, D-Ore., Ed Markey, D-Mass., and Kirsten Gillibrand, D-N.Y., pushed for direct payments and against legal immunity.

Pelosi told Bloomberg on Tuesday that she still wants stimulus checks in an agreement. She said the question of including them "is really up to the president," according to the news outlet.

On Tuesday, Politico reported that the Trump administration will push for direct payments in aid legislation. At the same time, McConnell's opposition to the provision is "softening," according to the report.

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