Will New Data Change Pelosi’s Mind?

Will New Data Change Pelosi’s Mind?

This is my stimulus and news update for Tuesday, September 22.

Quick Supreme Court Update

Before I get into it, real quick, Republican Senator Mitch Romney — who many thought would break with the Republican party along with Senators Susan Collins and Lisa Murkowski — has announced that he supports holding a vote for Justice Ginsburg’s replacement, so that appears to give Mitch McConnell enough votes to proceed with a nomination for Trump’s pick that the president should announce this week.

Will This New Data Change Pelosi’s Mind (State Tax Revenues)?

Yesterday I said, “Hey, with Ginsburg’s passing, with new government funding drama, it looks like stimulus is on the back burner unfortunately.”  But today I have a little bit of good news for you, not so much with stimulus timing unfortunately, but rather with a piece of news that I think could possibly bring Democrats and Republicans closer together on a stimulus package.

What am I referring to?  Well, to preface this, here’s a clip from my August 31 update.

So, in the span of almost exactly a month, we’ve reduced a $2.4 trillion difference between the parties for the next stimulus bill by $1.5 trillion to $900 billion. And that $900 billion sounds a lot like the nearly $1 trillion that the Democrats wanted in the HEROES Act for state and local government funding, I suspect that this remains the major point of contention in these negotiations, with perhaps unemployment a distant second. So what if in September states do are projecting a quicker recovery?  What if that sales tax revenue does start going up because slowly but surely people are going back to businesses, going out, of course practicing social distancing and all that, what if these states’ projections are better than they were a few months ago when the Democrats were drafting the HEROES Act?

So almost a month ago I was hopeful that perhaps state and local tax revenues would be higher than previously projected, and perhaps this could lead to Democrats and Republicans getting closer on a stimulus deal.  And guess what?  It looks like state revenues at least are doing better or at least less worse than people thought may have been the case a few months ago.

Let me just read you from this article in The Washington Post.

“State tax revenues in some parts of the U.S. are rebounding as the economy emerges from the coronavirus lockdown, a positive sign for governors and mayors who had been bracing for the biggest fiscal crisis in decades.  August sales-tax receipts in hard-hit New Jersey rose 3% from a year earlier and non-partisan legislative analysts are forecasting that revenue will exceed Governor Phil Murphy’s projections by $1.4 billion dollars for the fiscal year.  California’s revenue is exceeding forecasts, Georgia’s collections are on the rise and Ohio’s Cuyahoga County — home to Cleveland — dodged almost all of the devastating blow it once predicted. The figures are an early sign that the worst economic collapse since World War II may not decimate governments’ revenues as badly as some feared, potentially reducing the scale of budget cuts and tax increases that would exert a drag on the nation’s recovery.”

This article also tempers the excitement by pointing out that this is just the sales tax figures, there could be an income hit that wouldn’t be felt until a quarter or two after the fact since income tax revenues general lag due to the nature of tax deadlines, but overall this is good news.

Even so some experts think that the income tax hit will not be as bad as feared because job losses during the pandemic disproportionately affected lower-wage workers, while higher-paid workers could often work from home and make the same amount of money and not have their income affected, so they’ll still pay their tens of thousands of dollars in state income taxes in states like California, where I live.

So this recession is different than the Great Recession, the mortgage crisis, which hit a lot of folks across the board, including highly-compensated folks in the real estate industry, the finance industry, etc.

So don’t get me wrong, state tax revenues are still down, but not as down as a lot of people thought a few months ago.  Obviously this is good news in and of itself.

But for stimulus especially, this is also good news.

What’s the major point of contention between Democrats and Republicans with respect to another stimulus bill?  State and local funding.

Democrats refer, time and time again, to the HEROES Act, which calls for over $900 billion, almost $1 trillion dollars, in assistance to state and local governments.  Now, when was the HEROES Act drafted?

Late April, early May, passed the House on May Fifteenth.  And back then, I think a lot of us were fearing the worst with this pandemic, and yes, I know what’s going on in Europe with the case counts, a lot of places thinking, “Ah, are we going to shut down again,” you probably heard that Boris Johnson, British Prime Minister, has now ordered pubs to close early, so I’m not saying that it’s all smooth sailing from here, but this report is a good sign.

And maybe, just maybe, Dems will be willing to reduce their offer even more.  They could save face by saying, look, originally with the data and the projections we had in the springtime we thought state and local governments would need over $900 billion dollars in state and local assistance, and if those projections held true, we would be sticking to that today, but the new data shows things aren’t as bad on the state and local front as we all thought it would be back in late April, early May, so we’re willing to revise down this figure.

I think this would be a golden opportunity for Democrats, for Nancy Pelosi, to move closer to a compromise without really having to backpeddle.  Of course, Nancy Pelosi has already offered a top-line as low as $2.2 trillion dollars, so has she already taken into account positive or at least less-negative-than-anticipated revenue numbers from states?  Hard to tell at this point.

So that’s good news for stimulus.  But of course, on the other hand, this data from states could cause Republicans to dig even deeper on their party line opposing more funding for state and local governments, so in a sense, this data is somewhat of a double-edged sword, but I think it’s good news overall.

Bad News for Stimulus (Continuing Resolutions and Government Funding)

Bad news for stimulus of course, as I mentioned yesterday, continues to be the government funding bills.  I’ve covered this previously on the channel, but basically the government’s fiscal year begins on October 1.

So in September Congress is busy with appropriating money to various government agencies.  If Congress fails to do that by midnight on September 30, the government shuts down until a funding agreement is reached.

Of course this doesn’t mean everybody in the government stops working, it just means that certain operations will shut down.  And for the past couple weeks, Treasury Secretary Mnuchin and Nancy Pelosi were negotiating these funding bills, and things looked rosy, even up until this past Friday, things looked rosy, you know Republicans get their farm money, Dems get their food assistance money for children, and it was like, “Oh we just have to work out the details.”

But yesterday, House Democrats released a plan to fund the government through December 11, and it didn’t include $30 billion dollars to farmers that Republicans wanted, and like I told you yesterday that’s why Mitch tweeted that he didn’t like it, he would probably reject it.

And yesterday, Nancy Pelosi exhorted Republicans to accept the House proposal.  In a statement, she said, “The Continuing Resolution introduced today will avert a catastrophic shutdown in the middle of the ongoing pandemic, wildfires and hurricanes, and keep government open until December 11, when we plan to have bipartisan legislation to fund the government for this fiscal year.”

Larry Kudlow on Government Funding (Farm Aid) and Stimulus

And White House Economic Advisor Larry Kudlow was asked yesterday about the lack of farm aid in the Democrats’ proposal, and he said, “We do prefer additional farm aid, most of all we want a clean C.R., keep the government open.”  So he’s saying, at least from the White House’s perspective, or probably at least from Kudlow’s perspective, that additional farm aid is preferred but he, at least personally, didn’t make it sound like a huge sticking point.

Speaking of Kudlow, he was also asked yesterday if the economy will continue to improve with a stimulus package, and Kudlow gave a resounding “yes” in response to this question, Kudlow thinks that the economy will just recover without additional stimulus, he says things like stimulus checks will help, which he calls in this clip “direct assistance through checks,” but he’s not super gung-ho about the necessity for more stimulus, here’s the clip.

Reporter: Could I ask though, will the economy continue to improve if you don’t get a stimulus package?

Larry Kudlow: Yes, I’ve said this many times, we are in a self-sustaining, strong, V-shaped recovery. Now that battle’s not over yet, there’s still a good deal of hardship left, but unemployment having come down to 8.4 percent, we’ve created over 10 million jobs, 14 million on the household survey, these are good signs, strong retailing, strong autos, strong housing, inventory is going to be rebuilt.  So I think the so-called CARES 2 or whatever has elements that could help which are worth negotiating to wit the the small business sector we have long advocated extending the PPP for small business, there’s stories in the paper today about the restaurant, about the restaurant industry, which is struggling to come to come back a lot, we have argued from day one to help the small business including the restaurant, so let’s get that done.  We want to open up schools, so why don’t we get that done? The president favors the direct assistance through checks, so let’s get that done. There are certain things that could help, but I do not think the recovery is contingent on that assistance package, and um as long as businesses keep open and stay open we’re in much better shape than we were although we’ve got a lot of work to do.

But keep in mind, like I’ve said before, Kudlow can be kind of a loose cannon, right, these White House advisors, sometimes they say stuff and it’s, like, is that really the White House perspective as a whole or just your personal perspective, you have Kudlow here, kind of glossing over farm aid and glossing over stimulus, the more you listen to some of these advisors, the more you think, well, Kudlow talks for Kudlow, Navarro speaks for Navarro, not for Trump, not for the White House as a whole, so take what they say with a grain of salt, right.

Unemployment Update

I’ve seen reports of people getting paid in Indiana, the state did say that yesterday, September 21, was the date it would start. state unemployment memorandum update

And in Oklahoma, people are being paid today, though the Oklahoma Employment Security Commission tweeted this morning, “With the large number of payments being processed for the LWA benefit, some payments are continuing to process throughout the day today. Eligible claimants may not immediately see the LWA payment on their account this morning, but these payments will continue going through today.”  South Carolina looks like possibly not until next week, I was hoping it would be earlier based on statements.


  1. you’re really a good webmaster. The web site loading speed is incredible. It seems that you’re doing any unique trick. Also, The contents are masterwork. you’ve done a excellent job on this topic!

  2. Java Burn: What is it? Java Burn is marketed as a natural weight loss product that can increase the speed and efficiency of a person’s natural metabolism, thereby supporting their weight loss efforts

  3. hey there and thank you for your information – I have definitely picked up anything new from right here. I did however experience a few technical points the usage of this site, since I experienced to reload the web site many times prior to I may just get it to load correctly. I were considering if your web hosting is OK? No longer that I’m complaining, however slow loading circumstances instances will sometimes affect your placement in google and could injury your high quality ranking if ads and ***********|advertising|advertising|advertising and *********** with Adwords. Anyway I’m including this RSS to my e-mail and could glance out for a lot more of your respective fascinating content. Ensure that you replace this once more soon..

  4. Hi there, I found your web site via Google while searching for a related topic, your web site came up, it looks good. I have bookmarked it in my google bookmarks.

  5. Thanks for sharing superb informations. Your site is very cool. I am impressed by the details that you have on this site. It reveals how nicely you understand this subject. Bookmarked this web page, will come back for extra articles. You, my friend, ROCK! I found just the information I already searched all over the place and just couldn’t come across. What a great web-site.

  6. What¦s Taking place i’m new to this, I stumbled upon this I have found It positively helpful and it has aided me out loads. I am hoping to contribute & assist different customers like its helped me. Good job.

  7. I have been exploring for a little bit for any high-quality articles or blog posts in this kind of space . Exploring in Yahoo I ultimately stumbled upon this web site. Studying this info So i?¦m happy to convey that I’ve an incredibly good uncanny feeling I found out just what I needed. I so much surely will make certain to don?¦t put out of your mind this website and provides it a look on a continuing basis.

  8. I used to be very pleased to search out this net-site.I needed to thanks for your time for this wonderful learn!! I undoubtedly having fun with each little little bit of it and I have you bookmarked to check out new stuff you blog post.

  9. I was wondering if you ever thought of changing the structure of your website? Its very well written; I love what youve got to say. But maybe you could a little more in the way of content so people could connect with it better. Youve got an awful lot of text for only having one or two pictures. Maybe you could space it out better?

  10. naturally like your web-site but you have to check the spelling on quite a few of your posts. A number of them are rife with spelling problems and I find it very troublesome to tell the truth nevertheless I will definitely come back again.

  11. The subsequent time I learn a blog, I hope that it doesnt disappoint me as a lot as this one. I imply, I know it was my option to read, however I truly thought youd have one thing fascinating to say. All I hear is a bunch of whining about one thing that you possibly can fix should you werent too busy in search of attention.

  12. Thanks for the sensible critique. Me & my neighbor were just preparing to do some research about this. We got a grab a book from our local library but I think I learned more clear from this post. I’m very glad to see such fantastic information being shared freely out there.

  13. Hi there very cool blog!! Man .. Excellent .. Amazing .. I will bookmark your website and take the feeds also?KI am glad to seek out a lot of useful info here in the publish, we want develop extra strategies on this regard, thanks for sharing. . . . . .

  14. I was very happy to seek out this internet-site.I needed to thanks in your time for this excellent learn!! I positively having fun with each little little bit of it and I’ve you bookmarked to take a look at new stuff you weblog post.

  15. Please let me know if you’re looking for a article writer for your blog. You have some really good posts and I believe I would be a good asset. If you ever want to take some of the load off, I’d really like to write some material for your blog in exchange for a link back to mine. Please send me an e-mail if interested. Cheers!

  16. In this awesome pattern of things you actually receive a B- just for effort. Exactly where you actually confused everybody was on the facts. You know, they say, the devil is in the details… And that couldn’t be more accurate at this point. Having said that, let me inform you precisely what did give good results. The article (parts of it) is incredibly convincing and that is possibly the reason why I am taking an effort to opine. I do not really make it a regular habit of doing that. Next, whilst I can easily see a leaps in logic you come up with, I am definitely not sure of exactly how you seem to unite the points which produce the actual conclusion. For right now I will yield to your point but trust in the near future you link your facts much better.

  17. Thanks for sharing excellent informations. Your web site is very cool. I am impressed by the details that you have on this site. It reveals how nicely you perceive this subject. Bookmarked this website page, will come back for more articles. You, my friend, ROCK! I found simply the information I already searched all over the place and just couldn’t come across. What a perfect site.

  18. I’ve been browsing on-line more than 3 hours these days, yet I never found any interesting article like yours. It is pretty value sufficient for me. In my opinion, if all webmasters and bloggers made good content as you probably did, the web shall be much more useful than ever before. “Perfection of moral virtue does not wholly take away the passions, but regulates them.” by Saint Thomas Aquinas.

  19. Hi, Neat post. There is a problem with your web site in internet explorer, would check this… IE still is the market leader and a good portion of people will miss your great writing because of this problem.

Leave a reply

Please enter your comment!
Please enter your name here