More Stimulus Unlikely Before Election, Goldman Sachs Says


The chances that House Speaker Nancy Pelosi (D-Calif.) and Treasury Secretary Steven Mnuchin can reach an agreement and deliver the next round of federal coronavirus aid before the November 3 election are fading, economists from Goldman Sachs said late Tuesday. 

Key Facts

With just 13 days until the election, Pelosi and Mnuchin are continuing to hash out the details of a comprehensive bill. 

While Pelosi cited progress on some fronts on Tuesday—most notably in the form of concessions from the White House on testing and tracing language—major differences on state and local aid and liability protections still remain. 

In order to pass the relief bill before the election, Pelosi has said that the final bill needs to be drafted by the end of this week. 

The fate of the comprehensive bill under discussion has been complicated by Senate Majority Leader Mitch McConnell (R-Ky.), who on Tuesday told Republicans that he had warned the White House against making a sweeping deal with Pelosi before the election.  

Without the support of at least some of Republican Senators, no deal struck by Pelosi and the White House will make it through the Senate to become law. 

Crucial Quote

“With big differences and little time, it seems unlikely that Pelosi and Mnuchin will reach a deal before the election,” Goldman’s Alec Phillips wrote in a note to clients. “More importantly, even if a deal in principle is announced in coming days—this seems possible, but not likely—it looks very unlikely that it would pass before Election Day.”

What To Watch For

Pelosi and Mnuchin are scheduled to speak again by phone on Wednesday afternoon. The Republican-controlled Senate is also preparing a procedural vote on a $500 billion narrow relief package on Wednesday, but the plan is not expected to draw significant bipartisan support. Most Democrats also opposed a stand-alone Paycheck Protection Program extension in a Senate procedural vote on Tuesday. 

What We Don’t Know 

Goldman’s analysts said that the upcoming election continues to be the “biggest variable” when it comes to the stimulus bill. Pelosi has said that talks will continue beyond Election Day if a bill hasn’t passed by then. If President Trump is reelected and Republicans keep the Senate, it’s likely that the bill under discussion could still pass in December or January. If former vice president Joe Biden is elected and Democrats take control of the Senate, Goldman’s analysts say the odds of the bill passing in a lame duck session before Inauguration Day are lower. In that scenario, Democrats are likely to wait until January, when they’ll be able to pass a bigger package with less Republican opposition (though the analysts noted that there may be some short-term exceptions on PPP funding or enhanced federal unemployment benefits).

Further Reading

Democrats Vote Against GOP’s PPP Stimulus Bill As McConnell Tells White House Not To Make A Deal (Forbes)

Stimulus Deal Soap Opera Likely To Drag On Past Today’s Deadline As Pelosi, Trump And McConnell Send Mixed Signals (Forbes)

Stimulus Cliffhanger Drags On—With Staff Working ‘Around The Clock’—As Pelosi And Mnuchin Struggle To Cut A Deal (Forbes)

Pelosi Doubles Down On 48-Hour Stimulus Deadline (Forbes)

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