This is my stimulus update for May 9, 2020.
Pelosi was on C-SPAN yesterday hinting at the price tag of CARES 2, she was coy, very coy as you’ll see when I show you the clip, but first let me say something.
A lot of folks in the comments are saying I’m so negative about the $2,000 a month and that I don’t care about people who are struggling, and that’s not true at all.
I say the things I say because I do care about you and what’s going on, more so, in fact, than getting clicks.
I don’t put out headlines like “$2,000 a Month Coming Soon” and I come down hard on mainstream media and other YouTubers for sometimes making it sound like this $2,000 a month for up to 12 months like the Emergency Money for the People Act is “coming soon” because as a financial professional I’ve seen people make rash decisions because they thought they were going to come into some money, they were so confident they were going to get that raise, and they spent money, and they made financial decisions as though they already had the money in the bank, and guess what?
The money never shows up in the bank, they never got that raise they were so sure of.
They should have been penny pinching, not counting chickens before they hatch and spending a windfall they hadn’t received yet.
I can think of another situation with another client, only child, father had passed years ago, mom was in her last year of life, he thought that certainly mom had at least some money she would pass down, he’s her only child, only heir, and when she passed he was thinking he would get a small windfall, they never really talked about it, but turns out, nope, mom was broke, and he made some spending decisions that year that he wouldn’t have made if in the back of his mind he wasn’t thinking about the little bit he expected from mom.
Now, I’m not saying you’re going to on a spending spree in the middle of a crisis, but having things like, “$2,000 a month” in the back of your mind can cause you to splurge a little bit, to spend that $100 that maybe you should have deposited into your Webull account by May 11 to get two free stocks.
So point is I don’t want any of you to read all this stuff and watch and listen to all this stuff and think that, oh yeah, it’s gaining steam in Congress.
Rather, assume it’s not going to happen, and make the right financial decisions now assuming it’s not going to happen, and frankly as you all know I think there’s 0% chance of something like the Emergency Money for the People Act happening unless the virus gets a lot worse or the murder hornets swarm across the continent.
Realistically, there might be another round of direct payments, one-off, maybe two-off, right, but not these monthly essentially universal basic income proposals.
So conduct your financial affairs as though you’re not getting another check, always plan for the worst.
Now I want to tell you about something that Richard Neal, we’ve talked about him before, he is the Chairman of the House Ways and Means Committee, CARES 2 must pass through this committee.
So Neal as chairman is obviously someone who wields a great deal of power, he as a very strong voice in the House as Chairman of Ways and Means.
Now, I know many of you are on SNAP Benefits, so I know you’ll want to hear this, Neal did confirm that that expanded SNAP benefits will be part of the Democrats’ proposal for CARES 2, what exactly that looks like, we’ll have to see.
Now on to something Pelosi said yesterday, she basically hinted that CARES 2 could be in the multi-trillion-dollar range in terms of a price tag.
Someone pointed out to me that a few mainstream articles were saying that the price tag of the Democrats’ proposal for CARES 2 would be $800 billion, no, no, what, then they’d have nothing left after McConnell’s through with it, right, like I’ve said several times this past week, Democrats are going to come out with something huge because they know it’ll have to be pared down, but take a listen to what Pelosi, and she was kinda being tight-lipped, but she was still dropping hints here in this video, check it out:
I feel like a kid before school gets out, I’m so anxious to see what’s in this so I can pick it apart, piece by piece, right here on the channel, hopefully early next week we’ll see it.
But now let’s talk about Trump.
So in a meeting yesterday with Republican members of the House of Representatives, Trump said some very telling things, about where his mind is at.
The entire video is 98 minutes long, link is in the description if you want to check it out, but here are some key takeaways I had in my notes.
So Trump kept using this phrase “Transition to Greatness,” and he seemed to really like it, and you can tell why, it kind of has echoes of his campaign slogan, “Make America Great Again,” so we might be hearing more about this “Transition to Greatness” in the weeks and months to come.
Take a listen, by the way, and the audio is not very good in the original video, just FYI.
“So we’re looking at the transition to greatness, and I think it’s starting right now.”
Then later a Congressman asks Trump about the Phase 4 negotiations, that’s referring to CARES 2, that’s the next stimulus package, and here’s what Trump had to say:
“We’re in no rush, we want to see what the Democrats have, but I can’t say we’re in a rush, we were in a rush to get the money out to people, we have got the money out, some money is stalled due to state machinery…” referring to unemployment there and the clunky issues states are having there.
But it’s interesting because just in this remark, he’s looking back at CARES 1, we were in a rush, we have got the money out, not exactly the tone of someone interested in throwing more money out there.
Also a Congressman asked Trump about White House staff members who have recently tested positive for COVID-19 and what that means for getting America back to work.
It’s a fair question.
If people at the White House can contract COVID-19, in this presumably sanitized workplace with safety measures in place, why are you so confident, Mr. President, about people being able to go back to work?
Shouldn’t they be justifiably fearful of contracting the virus once they return to the workplace? Here’s what Trump said:
He says, “You can catch it anywhere, whether you did go back to work or whether you didn’t go back to work.”
And then later in the video he talks about some statistic he saw that most cases come from apartments and homes, and this is something that Governor Cuomo in New York has said, that preliminary reports show that 66% of new hospitalizations were from people who were sheltering at home, but that could mean anything, presumably more retired people, older people, more vulnerable populations, are more likely to be at home anyway, so that could be at least partially contributing to that statistic.
My point is that the President is deadset on getting this country back to work, and he’s in “no rush” regarding CARES 2, he says the ball is in the Democrats’ court, and that’s basically that, Kudlow was on yesterday too echoing the same sentiment, saying we’re gonna let Congress do its thing, and right now House Democrats are taking the lead on CARES 2 in Congress.
We know that Trump himself wants some business incentives that I’ve told you about and some other things to get the country going again, I mean those unemployment numbers are scary and it’s an election year. I’ve heard a lot of chatter about that how maybe Trump will cave in to a $2,000 a month stimulus for 12 months, Emergency Money for the People Act idea, because it’s an election year, but think about it, how would that make Trump look?
That would make him look like he caved to the Democrats, Trump wants to make America “great,” take it through this “transition to greatness,” and in his mind, greatness is a roaring economy, not a welfare state.
That said, if Republicans want to get what they want, they’re going to have to compromise and we will see some neutered versions of the Democrats’ original proposals find their way into the final bill.
Later this weekend I will be putting out a video with some updates on what the SSA said this week about stimulus and representative payees, I know that’s a very small subset of all of you out there who are interested in that topic, but stay tuned for that.