While another direct payment from the government won’t hit your bank account before Election Day, that doesn’t mean you won’t see additional stimulus money before the end of 2020.
House Speaker Nancy Pelosi extended a self-imposed Tuesday deadline for passing a bipartisan aid package, saying she’s now open to continued negotiations with Republican leadership. Pelosi told reporters Tuesday she hopes to hash out a deal before the end of this week.
“It isn’t that this day was a day that we would have a deal. Today was a day where we would have our terms on the table to be able to go the next step,” Pelosi said in a Tuesday interview with Bloomberg TV. “I’m a legislator. They’re not necessarily legislators, so I’m trying to impress upon them: If we want to have this by Election Day, and I think we can, we have to engineer back from there to this week.”
Pelosi and Treasury Secretary Steven Mnuchin will speak again Wednesday. According to White House Chief of Staff Mark Meadows, Mnuchin is offering a $1.88 trillion deal while Pelosi is hanging tough at roughly $2.2 trillion. Both sides agree any deal will include direct payments to most Americans.
On Tuesday, Meadows told CNBC that negotiations have seen “good progress” but noted major hurdles remain, including the several billion dollars separating the two sides.
Meanwhile, Senate Majority Leader Mitch McConnell reportedly warned the White House not to approve a deal with Democrats ahead of the election. According to the Washington Post, McConnell believes it could disrupt the confirmation vote of Supreme Court justice nominee Amy Coney Barrett.
Hours after that warning was issued, McConnell and Republican senators are set to revote on a virus proposal Wednesday that is about one-third the size of a measure being negotiated by Pelosi and Mnuchin. But the Senate GOP bill has failed once before, and Trump himself says it’s too puny. The debate promises to bring a hefty dose of posturing and political gamesmanship, but little more.
This week’s action in the Senate has the chief benefit of giving Republicans in tough reelection races one last opportunity to try to show voters they are prioritizing COVID-19 relief — and to make the case to voters that Democrats are the ones standing in the way.
“It was important to indicate to the American people before the election — not after — that we were not in favor of a stalemate, that we were not in favor of doing nothing,” McConnell said in a Kentucky appearance last week.
McConnell is resurrecting a measure in the $650 billion range that would provide a second round of paycheck relief, add $300 per week in supplemental unemployment benefits, and help schools and universities reopen. It contains no funding for states and local governments sought by Democrats and ignores Trump’s demand for another, larger round of direct payments.
The last coronavirus relief package, the $2.2 trillion bipartisan CARES Act, passed in March by an overwhelming margin as the economy went into lockdown amid fear and uncertainty about the virus. Since then, Trump and many of his GOP allies have focused on loosening social and economic restrictions as the key to recovery instead of more taxpayer-funded help.
The most recent bill from House Democrats weighs in at $2.4 trillion — or more than $2.6 trillion when including a $246 billion tax increase on businesses that’s unlikely to gain GOP acceptance. The package is a nonstarter with Senate Republicans and McConnell, who is making the case for a more targeted approach that’s well south of $1 trillion.
Taking a smaller bill now would likely require Pelosi to give up tax cuts for the working poor and accept a far smaller aid package for states and local governments. But it would also mean that relief would flow immediately to millions of workers whose supplemental unemployment benefits were cut off this summer.
When an aid bill finally passes may depend on the outcome of the election.
If Trump loses, Congress is likely to stagger through a nonproductive lame-duck session comparable to the abbreviated session after the decisive 2008 Obama-Biden victory or the 2016 session that punted most of its leftovers to the Trump administration. That scenario would push virus aid into 2021.
Delays in coronavirus aid come as the recovery from this spring’s economic shutdown is slowing and as the massive stimulus effects of the $1.8 trillion March relief measure wear off. COVID-19 cases are spiking again heading into a third wave of the pandemic this winter. Poverty is climbing and the virus is continuing to take a disproportionate toll on minority communities.
“If Congress doesn’t act the next administration is going to inherit a real mess,” said Harvard economist Jason Furman, a former top Obama adviser. “Economic problems tend to feed on themselves.” He is in the Democratic camp that prefers imperfect stimulus now rather than a larger package in four months or so.
Instead, if history repeats, COVID-19 relief is likely to be the first major item out of the gate next year, but it’s not clear even then that it’ll be as big as Democrats hope.
“Pelosi decided in July that the political benefit of the next package would accrue to the president’s benefit and therefore she was going to lay out the most aggressive terms possible,” said veteran GOP Rep. Patrick McHenry of North Carolina, who predicts that Pelosi won’t get much more next year than she could have gotten now “unless they’re willing to break the filibuster for a $3 trillion bailout for blue states.”
The Associated Press contributed to this report.