A Dinner, a Deal and Moonshine: How the Stimulus Came Together

“I think divided government can be an opportunity,” said Ms. Murkowski, an Alaska Republican. “How we take that up, how we choose to use it, is up to us.”

With President Trump almost entirely absent from the talks, it took quiet prodding from President-elect Joseph R. Biden Jr., a month of frenzied negotiating by the moderates — on Zoom calls, in parking lots and over late-night sessions on Capitol Hill fueled by pizza and moonshine — intense bargaining by party leaders and several near-misses with a government shutdown to produce the final product. Two dozen lawmakers and aides described the legislative drive.

That November night at Ms. Murkowski’s house, Senator Mitt Romney, Republican of Utah and a former management consultant, had arrived ready with a proposal outlined on his iPad. But it was Senator Richard J. Durbin of Illinois, the No. 2 Democrat, whose presence at the gathering raised some eyebrows among the Republicans, who chimed in with the suggestion that set the tone.

Forget about a sweeping stimulus initiative, Mr. Durbin said. What we need here is a limited, emergency plan to get the country through March.

“That was really what opened up the eyes of all of us,” Mr. Romney recalled.

Two hours away, in Wilmington, Del., a similar theory was taking shape among members of Mr. Biden’s transition team as they prepared to confront a public health and economic crisis. In order to give the president-elect a fighting chance when he takes office in January, they privately told Democrats, Congress needed to enact another stimulus plan to serve as a bridge until the new administration, even if it was much smaller than what ultimately would be needed.

The problem was, there was not much time to produce a deal.

Embracing his inner task master, Senator Joe Manchin III, Democrat of West Virginia and the self-styled ringleader of the effort with Senator Susan Collins, Republican of Maine, scheduled meetings over Thanksgiving, on weekends and late at night. Lawmakers broke into subgroups focused on the thorny issues that had divided the two parties for months: how to structure unemployment benefits, aid to states and cities, coronavirus liability protections, funds for school reopenings and other issues.

Drawing from a $1.8 trillion stimulus framework proposed weeks earlier by the Problem Solvers Caucus, a bipartisan group of centrist House members, and signals from party leaders, Mr. Manchin, Senator Mark Warner and several others quickly cobbled together an initial outline that they felt both parties could live with. It roughly split the differences between Democrats and Republicans, including items that both sides agreed on, but also two dueling priorities that had bedeviled their leaders: the liability shield that Republicans were demanding, and money that Democrats were insisting on for state and local governments whose revenue had collapsed in the economic crisis.

The haggling was intense and constant. Ms. Collins said she had never done so much texting before. “This was not an instance where members started it off and turned it over to staff,” she said.

During one Friday session, Representative Tom Reed, Republican of New York and the co-chairman of the Problem Solvers Caucus, called from his car and ended up spending hours in a convenience store parking lot hashing out sticking points.

“If America only knew that $1 trillion of policy was negotiated in the Sheetz parking lot,” Mr. Reed said.

Two weeks after dinner at Ms. Murkowski’s, they honed the initial $908 billion framework over slices of pizza in a large Senate hearing room and rushed to arrange a news conference for the next morning. They moved so quickly that the posters Mr. Manchin had ordered were not done by the time the event began.

“None of us thought in good conscience we could go home for Christmas with all these people thrown out of their apartments, closing their businesses, getting into food lines,” said Mr. Warner, a Virginia Democrat. “It would be the ultimate Scrooge-like activity.”

The moderates did not know it, but Democratic leaders had been doing their own postelection recalibration after insisting for months that any deal less than $2 trillion was inadequate.

Three days after the dinner at Ms. Murkowski’s house, Speaker Nancy Pelosi and Senator Chuck Schumer, Democrat of New York and the minority leader, had driven to Wilmington to meet with Mr. Biden and plan the year ahead. The president-elect’s message was plain.

“He knew we could not get everything now, but anything we could get would make his job easier when he became president,” Mr. Schumer said. “We agreed.”

When the moderates introduced their plan, the top Democrats saw their opportunity. They quickly embraced it as the easiest vehicle for jump-starting negotiations.

It was a major shift for the leaders, who had rejected Trump administration proposals twice as large, refusing to budge as the election approached even as they privately conceded that there was little momentum for a deal. During one call in late September, Ms. Pelosi had told Treasury Secretary Steven Mnuchin that she had spent a sleepless night watching a rerun of “The Princess Bride,” the 1987 cult classic. She compared their negotiations to how Billy Crystal’s character, Miracle Max, describes a patient in the film who has been tortured to the brink of death, pronouncing them “mostly dead.”

Senator Mitch McConnell of Kentucky, the majority leader, was making his own reassessment but remained aloof in public as usual. Two days after the moderates unveiled their outline, Ms. Collins, Ms. Murkowski, Mr. Romney and Senator Bill Cassidy, Republican of Louisiana, met with Mr. McConnell in his spacious Capitol office suite to brief the leader on their plan.

He gave the lawmakers reason to be optimistic. What you have done is get Democrats off their $2 trillion dime and to re-engage, he told them. That is helpful.

A week went by, and Mr. McConnell began showing more openness to a deal. Speaking at his weekly news conference, he made what would prove to be a key offer: Republicans would drop their insistence on liability protections for businesses if Democrats would not pursue billions for state and local governments.

It appeared to be a surprising retreat by the leader, who had said the issue was a “red line” for Republicans, and Democrats initially balked.

But Mr. McConnell had concluded that he needed a deal and that time was running short. Senators David Perdue and Kelly Loeffler, two Georgia Republicans whose runoff elections in January will determine control of the Senate, were being harshly criticized over Congress’s failure to deliver more pandemic relief. Privately, the majority leader promised the senators that they would not leave for Christmas without a deal.

There was still one important person to persuade: the president, who was preoccupied with baselessly contesting his election loss.

When they gathered, their faces obscured by masks, in Ms. Pelosi’s Capitol Hill office suite, trimmed with Christmas garlands, there was at first little sign of a thaw.

Mr. McConnell insisted that Mr. Mnuchin be on the line. Republicans and Democrats sparred over the overall size of a package and each of its parts. At one point, Mr. Schumer, who was fighting for New York City’s transit funding, grew so frustrated with a Republican transportation proposal that he threatened to pull the plug.

“If that’s where you’re at, I’m out of here,” he said.

Both sides were also under pressure from some in their own ranks to include another round of direct checks for Americans, a popular component of the previous stimulus bill, but one that the gang of centrists had deliberately decided to leave out because it was not specifically targeted to those out of work. Mr. Trump and Mr. Mnuchin pushed, too, with the Treasury secretary working the phones to soften up skeptical Senate Republicans.

Senator Bernie Sanders of Vermont, the progressive independent, had pre-emptively panned the emerging framework, in part because checks were not included. He locked arms in the Senate with Josh Hawley of Missouri, a conservative Republican.

In the House, Representative Pramila Jayapal, Democrat of Washington and the chairwoman of an influential bloc of 96 progressives, made a similar stand. She had texted Ms. Pelosi in early December, threatening that her group would oppose the stimulus proposal if it did not contain some form of direct payment.

“If we can’t point to how this package is going to benefit regular people, it’s going to be very difficult for us to get on board,” Ms. Jayapal wrote.

When top leaders left Ms. Pelosi’s office that night, all four signaled that a deal might at last be at hand, including $600 checks. Their aides scrambled to begin drafting an emerging compromise, with little time left before government funding was set to lapse.

Senator Patrick J. Toomey, Republican of Pennsylvania, had other ideas. With less than 48 hours until the government was set to shut down without a deal, Mr. Toomey, a fiscal hawk who had long sought to end a series of the Federal Reserve’s emergency lending programs, stood firm on one demand. The stimulus measure must not only end an array of programs the Fed had created to help businesses and municipalities during the pandemic, he said, but also bar the central bank from creating anything like them in the future.

Democrats were incensed, accusing Mr. Toomey of trying to sabotage the ability of the incoming Biden administration to respond to the economic turmoil.

But Republicans rallied around Mr. Toomey, and congressional leaders agreed that they would need to extend government spending another day to buy time to resolve the new impasse.

They ultimately struck an agreement shortly before midnight, after haggling on the floor and in Mr. Schumer’s suite. It took another 18 hours before Mr. McConnell could walk onto the Senate floor and announce the deal.

By then, the moderates who kicked off the process had been relegated to the sidelines, left to wait and see if the stimulus effort could beat the odds. Several nights earlier, in a large Senate conference room, Mr. Manchin had opened a bottle of his West Virginia moonshine, which he likes to call “farm fuel,” to toast whatever was to come.

“It took the enamel off my teeth,” Mr. Durbin said. “But it tasted pretty good.”

Alan Rappeport and Jim Tankersley contributed reporting.