This is my stimulus update for Monday, July 20.
State of the Stimulus Negotiations
Well, the Senate is back in town today, and we haven’t heard anything yet in terms of specifics about the next coronavirus relief bill from Republicans, that said, I’m hoping that we see something early this week.
Both Mitch McConnell and Nancy Pelosi have said that they believe that they will be able to work together to get something done, but the truth is no real negotiations have started between the Republicans and Democrats.
It seems that at this point, the only talks that have been sustained are those between the White House and Senate Republicans, and as I told you yesterday, there are rumors that there are disagreements even between the White House and Senate Republicans.
Yesterday I told you that Trump on Fox News Sunday doubled down on his desire to see a payroll tax cut in the next stimulus bill. He said that he would not consider signing the next stimulus relief bill if it doesn’t have a payroll tax cut in it.
That could throw a wrench in things. If Senate Republicans have to make sure a payroll tax cut is in there, they might have to reduce the budget for other things like stimulus checks to reduce the overall price tag of the bill, making it more difficult to reach an agreement with the Democrats, who are definitely opposed to a payroll tax cut, as well as even some Republicans, who have expressed doubts about whether a payroll tax cut should be in the next relief bill.
State and Local Funding in the Next Stimulus
Complicating matters, many Republican senators are from states hard-hit by the coronavirus, and they want to see more money for testing and tracing. The President doesn’t like that idea because according to him, when you have more testing, you have more cases, and he thinks that makes him look bad.
We do know that right now, as I’m recording this, Donald Trump is meeting with the Congressional Republican leaders, which are as you know Mitch McConnell the Senate Majority Leader and Kevin McCarthy the House Minority Leader, to discuss the package.
Now apart from testing and tracing and stimulus checks, we know that one thing that Pelosi and the Democrats have pushed very hard for is state and local funding, nearly $1 trillion in the $3 trillion HEROES Act that Democrats passed in the House in May was for additional funding for state and local governments.
However, the Washington Post, again with its anonymous sources it loves so much in D.C., reported this morning that the Republican proposal “is not expected to include new aid for cities and states…Instead, according to two people familiar with its contents, it will contain provisions allowing states and localities more flexibility with the $150 billion already allocated by Congress in the CARES Act, which was restricted to coronavirus-related expenses…They cautioned, however, that negotiations were ongoing and provisions were subject to change.”
So according to these anonymous sources, the Republican bill is already existent in some form to the point where these sources could see the contents and they’re claiming that it’s not going to have any additional funding for state and local governments without subject to change, that would be an extremely tough pill for Democrats to swallow, going from their $1 trillion proposal for state and local governments in the HEROES Act down to zero, and frankly I don’t think that Democrats would swallow that bill, I think this would be a dealbreaker for them.
That said Treasury Secretary Steven Mnuchin reportedly said on a call on Friday to various members of Congress on Friday that state and local aid money would probably be necessary in the end.
Chuck Schumer’s Letter From This Morning
This morning Chuck Schumer wrote a letter to Senate Democrats stating, “Before this state work period, our caucus took to the floor to demand aid to state, local, and tribal governments; coronavirus testing; and supporting our nation’s childcare and education systems. Senate Republicans blocked each of our attempts. Now, Leader McConnell has said that he wants to write the next coronavirus legislation behind the closed doors of his office. From what we understand from press reports, Leader McConnell’s bill will prioritize corporate special interests over workers and main street business, and will fail to adequately address the worsening spread of the coronavirus. This one-party approach to this legislation is the same approach that delayed the passage of the CARES Act and the subsequent interim emergency relief legislation, failed on policing reform, and it won’t work this time around either.”
He goes on to say that McConnell’s priority in this bill appears to be the liability protection we’ve mentioned before that Schumer believes would grant immunity to negligent corporations.
Here’s the link to Schumer’s letter from this morning if you’d like to read the rest of the Senate Minority Leader’s scathing words.
End of Supercharged Unemployment Benefits
To top it all off we have the looming end of the supercharged unemployment benefits just around the corner with Republicans reportedly considering reducing those benefits from $600 weekly to something in the range of $200 to $400 weekly much to the Democrats’ frustration.
So What Am I Saying?
So what am I saying here? I’m saying that our Congressional leaders frankly don’t have a lot of time here to make something happen, and unfortunately it doesn’t look like anyone’s on the same page right now, not even the President and the Senate Republicans.
But I will continue to keep you informed about the next round of stimulus and definitely be keeping an eye on Mitch McConnell for when the Republican draft of the next relief bill is released, hopefully soon.
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