On Sunday, Speaker of the House Nancy Pelosi said on ABC that lawmakers have until the end of Tuesday (as in, today) to hash out a deal if they want to pass a stimulus relief bill before November 3rd, reiterating that lawmakers do, in fact, want to pass a stimulus before the election. The stock market opened higher on both Monday and Tuesday morning, reflecting optimism that a stimulus agreement could come soon. As of today, we’re just two weeks out from November 3rd.
The CARES Act passed in late March, giving most Americans a $1,200 direct stimulus payment as well as supplementing state unemployment benefits with an extra $600 per week. But the unemployment boost expired at the end of July and there has not been another stimulus payment since then, despite millions of people remaining unemployed and over 8 million Americans falling into poverty since May, according to a paper published by Columbia University researchers. Even the Federal Reserve has warned more than once that slow or stingy stimulus relief could have long-term negative effects on economic recovery. A Bloomberg survey of economists found that $1.75 trillion was the median amount of stimulus relief they answered was necessary for recovery. Economists said that $1 trillion was the absolute minimum amount.
Though House Democrats passed the $3.4 trillion Heroes Act back in May, earnest bipartisan talk of a fifth stimulus bill didn’t begin until July, as life-saving CARES Act provisions like the $600/week unemployment were coming to an end. Since then, there’s been dizzying back and forth over how much money it will provide and what kind of relief it will give to whom, with talks stalling due to Congressional recesses throughout the summer.
To summarize some of the moves made in October alone, the White House offered at first a $1.6 trillion package, then $1.8 trillion, and yesterday it raised the amount to almost $1.9 trillion. But President Trump said on Monday that he actually wants to “do it at a bigger number” than the $2.2 trillion Pelosi and House Democrats want. Early this month, the House Democrats passed a leaner version of the Heroes Act that budgets $2.2 trillion, but the Senate has not voted on it. Instead, Senate Majority Leader Mitch McConnell scheduled votes on two separate bills this week: another Paycheck Protection Program bill and a $500 billion stimulus package that would include aid for schools, funding for the unemployment program, and money for testing and contact tracing, among other things.
So, where do the talks stand as of now? You’d be forgiven for having trouble keeping up with the ping pong match. There are a number of measures where the two sides still disagree, including the amount of aid that should be given to states and local governments and liability shields that would protect corporations against being sued by their employees for coronavirus-related negligence. Both Republicans and Democrats want the next stimulus bill to include a $1,200 direct payment, and there will also likely be some boost to state unemployment programs, though Republicans have resisted reinstating the $600/week boost.
Pelosi is also reportedly “seeking clarity” from Republicans during negotiations, because even if they’ve agreed on the broad categories of what the stimulus should contain, she says some of the language remains up in the air. The Speaker gave testing and tracing as an example, noting that rigorous testing and tracing would especially help communities of color; Black Americans have been dying at much higher rates from COVID-19 than white Americans. “We had pages and pages of how you would do this in the minority community,” Pelosi told ABC. “They crossed it all out.” She said that while the Democrats and Republicans agreed on the federal government paying for contact tracing, they disagreed on explicitly laying out a federal plan, with the Republicans’ language leaving it up to states to establish their own strategies.
This is, of course, just one example of the disagreements that still need to be ironed out between the two parties. But even if Democrats and the White House manage to arrive at an agreement by today, it’s unclear what will happen in the Senate. Last week, McConnell said he would not put such an expensive stimulus bill up for vote, even if the White House and Speaker Pelosi came to an agreement. More recently, he said he would “consider” whichever stimulus deal they reached. Pelosi said on ABC that while the Majority Leader has claimed a lot of different things regarding the stimulus, “most of the time he spends laughing, pushing the pause button, telling states to go bankrupt.”