Bloomberg is reporting this week that to nobody's surprise, Speaker Nancy Pelosi, D-Calif., and Senate Minority Leader Chuck Schumer, D-N.Y., on Tuesday asked Senate Majority Leader Mitch McConnell, R-Ky., to resume talks on an additional stimulus package. However, McConnell is insisting on a “targeted package,” Bloomberg said.
“We write to request that you join us at the negotiating table this week so that we can work towards a bipartisan, bicameral COVID-19 relief agreement,” Pelosi and Schumer wrote. They said they were encouraged by McConnell's comments after Election Day calling for stimulus and saying “it's a possibility we will do more for state and local governments,” one of the key areas of disagreement.
McConnell's office, asked to respond to the call for talks, referred to the GOP leader's comments from earlier on Tuesday, when he reiterated his support for a bill of about $500 billion.
The Democratic call for talks with McConnell followed the decision by the White House and President Donald Trump to pull back from their involvement after months of negotiations failed to yield a deal. The administration had offered to back a $1.9 trillion package before the Nov. 3 election but the difference between the two sides continues to be wide as Democrats have been demanding $2.4 trillion.
“Millions of unemployed Americans and those facing eviction and hunger demand action from their leaders. The time to act is upon us like never before,” Pelosi and Schumer wrote.
Senate Republicans in July had put forward a $1 trillion stimulus bill that included direct stimulus checks, only to pare that back as the economy began to bounce back. They have been especially resistant to Democratic demands for more than $400 billion in aid to state and local governments with budget shortfalls due to lost revenue during the pandemic.
President-elect Joe Biden on Monday called on Congress to act on a stimulus bill this year, before he is inaugurated, but forecasters see that as unlikely. “I am open to a targeted bill roughly of the amount that we recommended, a half trillion dollars, which is not nothing,” McConnell said Tuesday. He also reiterated his call for liability protections from COVID-19 lawsuits, which Democrats have opposed.
Also, some virus-related relief could end up attached to the must-pass spending bill needed to keep the government open after Dec. 11. House Democrats and Senate Republicans are negotiating behind closed doors this week on an outline for the 12-part $1.4 trillion bill and are reporting that progress is being made.
Treasury Secretary Mnuchin had led talks with Democrats on new stimulus packages before the election. However, more recently the administration said it is stepping back and leaving those talks to McConnell. As a result, Biden emphasized with Pelosi and Schumer the “urgent need” for Congress to provide resources to deal with the pandemic, Bloomberg said.
At the same time, support for additional stimulus continues to come from Federal Reserve Chair Jerome Powell who earlier called a new fiscal stimulus package as “absolutely essential” to the U.S. economic recovery. He also argued that even if spending proved more than necessary, it “will not go to waste.”
And in a note regarding possible benefits of successful coronavirus vaccines, The Hill notes this week that while preliminary results from several highly effective vaccine candidates are boosting hopes of a quicker end to the pandemic and a faster recovery, and that “while the light at the end of the tunnel may seem brighter today than it was 10 days ago, economists fear the U.S. still has daunting obstacles in its path.”
The report notes that coronavirus cases and hospitalizations “are shattering state records across the country,” and as cases climb, unemployed workers and struggling businesses “may run out of ways to stay afloat between now and widespread distribution of a vaccine.”
This is especially true since several crucial government aid programs also are set to expire at the end of December, setting up a potential flood of foreclosures, evictions and bankruptcies. As a result, The Hill says economists are warning that if the White House and Congress are unable to bridge the gap between proposals, millions of Americans could suffer before the pandemic and economy turn around. The report cites Adam Ozimek who worries that, “If the government doesn't do more, then we could be looking at a lot more businesses going under, the recovery backtracking and heading in reverse, and a bigger economic hole to dig our way out of.” Ozimek is chief economist at Upwork.
So, we will see. The political situation is as toxic as ever even as the transition appears to be moving forward. The future roles of the government are expected to continue to be critical and should be watched closely as these debates intensify, Washington Insider believes.