GOP leaders draw red line on next phase of coronavirus aid legislation

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McConnell says US needs to provide protection for businesses and employees

Senate Majority Leader Mitch McConnell responds to Sen. Schumer's warning of layoffs without state aid.

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The top Republicans in the House and Senate made clear Friday their demands in the latest round of coronavirus relief legislation: granting businesses protection from lawsuits.

House Minority Leader Kevin McCarthy, R-Calif., and Senate Majority Leader Mitch McConnell, R-Ky., issued a joint statement saying granting liability protection to businesses "will be absolutely essential to future discussions surrounding recovery legislation."

The red line drawn by the GOP sets up a clash with Democrats who are leery about granting blanket protections to businesses who may fail to enact safety standards and ensure protective gear for their workers. Meanwhile, Democrats have insisted the fifth round of coronavirus legislation must include money for struggling state and local governments, which Republicans have resisted.

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House Speaker Nancy Pelosi Thursday said she hopes the funding for state and local governments would amount to "almost $1 trillion" in the next stimulus package. She framed the debate as a way to invest in "our heroes" whose jobs are at risk because they are funded through public dollars, such as first responders, educators and health care workers.

As for liability protections, Pelosi and Senate Minority Leader Chuck Schumer, D-N.Y., believe the pandemic workers need more protections -- not less -- and Democrats are not supportive of giving blanket immunity to businesses that could be negligent during the health crisis.

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"Especially now, we have every reason to protect our workers and our patients in all of this," Pelosi said Thursday. "So, we would not be inclined to be supporting any immunity from liability."

McConnell initially scoffed at any state and local funding -- dubbed a "blue state bailout" to help Democrat-led states he believes had been fiscally mismanaged -- and suggested states could file for bankruptcy. He's since softened his tone but made clear that any state and local funding would have to be conditioned by protections for businesses against "frivolous lawsuits."

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"As the nation continues fighting this pandemic and parts of our economy begin to emerge from shutdown, Senate and House Republicans are united in our demand that healthcare workers, small businesses, and other Americans on the front lines of this fight must receive strong protections from frivolous lawsuits," McConnell and McCarthy said in a joint statement.

Business leaders have expressed fears about reopening after stay-home orders have been lifted because they may get sued if a customer or worker claims they have contracted COVID-19 from their establishment. While businesses may be able to win meritless cases in court, the cost of mounting a legal defense could still suck already struggling businesses dry.

"We cannot let a second pandemic of opportunistic litigation enrich trial lawyers at the expense of Main Street and medical professionals," McCarthy and McConnell added. "Senate and House Republicans agree these protections will be absolutely essential to future discussions surrounding recovery legislation."

Critics have accused GOP leaders of using the coronavirus crisis to enact long-held desires of "tort reform" --  or reducing the ability of victims to bring civil lawsuits to seek damages from businesses.

Meanwhile, some Democrats are pushing for a potential compromise by setting up a special kind of pandemic insurance for businesses, similar to how terrorism risk insurance was established after the 9/11 terrorist attacks.

Rep. Hakeem Jeffries, D-N-Y., told WNYC this week that establishing pandemic risk insurance would be a "reasonable" response to help businesses.

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"It may be reasonable... to take a look at some of the things that were done in the aftermath of September 11, where, given the extraordinary nature of what occurred in that instance, there were things that were put in place such as terrorism risk insurance," Jeffries, a member of House leadership, said. "There has been some conversations about how you can create a similar vehicle for pandemic risk insurance to put businesses in a better place because what has happened is not their fault."

Legislation on the pandemic risk insurance is underway in the House Financial Services Committee and pitched as part of the next round of coronavirus relief legislation.

"That is a reasonable thing to take up to take a look at, as well as some of the things that were put into place on liability protection," Jeffries said. "... But a blanket pass to businesses would take us back 100 years to where workers were dying in factories without any real consequence."