There is plenty to fight about now as the nation works to move forward in its transition to a new government amid a growing coronavirus outbreak. At the same time, Bloomberg is reporting that President Trump's chief of staff is moving to “put the onus on Congress” as the White House retreats on proposed stimulus packages.
Chief of Staff Mark Meadows, once a lead negotiator working on a new coronavirus stimulus package, is now proclaiming that it's up to Congress to proceed with any talks, even though the issue has been a “priority” for the president.
“Obviously those discussions — if they happen — will be dictated by the House and the Senate,” Meadows told reporters when asked about the negotiations after a meeting with Senate Majority Leader Mitch McConnell, R-Ky. “We haven't seen a real willingness by our House colleagues to look at that.”
Meadow's comments came a day after House Speaker Pelosi, D-Calif., and Senate Minority Leader Chuck Schumer D-N.Y., urged McConnell to engage in talks. McConnell then “ridiculed” the $2.4 trillion Democratic measure that Pelosi and Schumer say must be the starting point for stimulus talks. “The problem is that their proposal is a multitrillion-dollar laughingstock” that “never had a chance of becoming law,” McConnell said.
McConnell reiterated his demand that any package be “targeted” and around $500 billion. He hadn't yet replied to the Pelosi—Schumer letter by mid-day Thursday, Bloomberg said but Senate Democrats upped the ante by introducing a new proposal to provide $10 billion for personal protection equipment in the next package, another sign of how far apart the two sides remain.
The comments came as numerous press reports are highlighting new lockdowns and anticipate new months-long survival tests until Covid-19 vaccines become widely available. More than 1 million US virus cases were reported in the recent week, leading states including Michigan, New Mexico, Ohio, and California to set tighter rules on movement and commerce, Bloomberg said. A wide swath of businesses — restaurants, hotels, retail shops, bowling alleys and theaters — will confront a devastating winter, if they are able to remain open at all. Many workers face the holidays with food and shelter in doubt.
“I'm looking for a sign of life,” said Jon Forman, founder and president of Cleveland Cinemas, an operator of four independent theaters in the metropolitan area that dismissed 90% of the staff. “We will not stay open through thick and thin.”
Senior citizens in long-term care have faced the worst of the pandemic, with no signs of stopping. States last week reported more than 29,000 new Covid-19 cases in places such as nursing homes and assisted-living facilities. Counts rose about 17% week over week, the steepest acceleration since May, when the COVID Tracking Project began tallying the data. Under 1% of the US population lives in such homes, but COVID fatalities there account for 40% of the national death toll, Bloomberg said.
In addition, the New York Times reported that the US Treasury Department's Office of Financial Research (OFR) warned on Wednesday that there were “significant downside risks” to the nation's overall financial stability from the economic fallout of the coronavirus pandemic and predicted that many households and businesses might be unable to recover without additional government assistance.
In its annual report to Congress, the OFR detailed the gravity of the threat that the financial system faced earlier this year as businesses were shut down across the United States and officials imposed stay-at-home orders around much of the country. The OFR praised government efforts to support the economy but suggested that substantial uncertainty remains because of the unpredictable path of the virus.
“Due to the novelty of the virus, the unknowns of its course and the response of health policy, many businesses are unsure when or even if they will resume normal operations and what new safeguards they must erect,” the report said. “Such uncertainty can weigh heavily on economic activity.”
The OFR was created out of the Dodd-Frank Act of 2010 and is a bureau within the Treasury Department. The report said that the “considerable” monetary and fiscal stimulus implemented earlier this year did serve as a bridge to an economic recovery, but that macroeconomic risk still remains “unusually high.”
Credit risk remains one of the biggest concerns, as lenders to the commercial real estate, energy and “high touch” sectors face big losses from defaults and bankruptcies. Meanwhile, a return to elevated valuations for risky assets could lead to another round of market stress despite efforts by the Federal Reserve to stabilize markets earlier this year.
The OFR noted that the federal debt is a long-term risk but suggested that there were more immediate concerns facing the economy. “Many households and businesses may be unable to recover absent additional government support,” the report said.
So, we will see. Pressure clearly is growing for the federal government to provide new stimuli, but concerns are also associated with some of the conventional approaches proposed. The intensity of the new, more recent outbreaks adds uncertainty to the outlook, as does the real time schedule for vaccine relief. These fights are likely to be prolonged and increasingly controversial and should be watched closely as they proceed, Washington Insider believes.