With No Stimulus Bill In Sight, Five Surprising Facts To Support Compromise
When the Senate returned from vacation in July, it seemed at that moment that a compromised stimulus package only had weeks until passing. Sure, disputes had to be ironed out, but the majority in the legislature expressed they wanted something even if they disagreed on the size.
Fast forward over two months later, and a stimulus package that shows any momentum has yet to materialize.
Speaker Nancy Pelosi (D-Calif) announced this week that the House of Representatives would remain in session, in case a compromised bill does develop. While representatives will still be allowed to go home when the session ends Oct. 2 in order to campaign, they will return at a moment’s notice to vote on a stimulus bill.
By all accounts, though, the belief that such an opportunity will come before the November election has grown slim. It’s a particularly surprising development with so many factors working towards a compromise.
The Fact The President Says He Wants It Passed
When the party of the President controls at least one arm of Congress, then there’s a good chance that his views will take an outsized role in shaping legislation. That’s certainly the case now, with President Donald Trump often providing marching orders for the Senate, since the Majority Leader, Mitch McConnell (R-KY) has incentive to see both the President and his Senators earn reelection.
And, in public, Trump has signaled he wants a stimulus bill to pass, particularly one that will provide checks to taxpayers. That hasn’t done much to improve momentum.
It does bring into question how badly he wants to see a bill pass. First, in the initial conversations, he demanded the size of the bill remain near $1 trillion. The House had already passed a $3.5 trillion HEROES Act, which was a bill that received primarily Democrat support. Pelosi has said she would compromise on a bill if Republicans move up to a cost of near $2 trillion. The White House wouldn’t budge on the number.
Trump also empowered Chief of Staff Mark Meadows in the negotiations. In the first stimulus, Treasury Secretary Steven Mnuchin handled much of the back-and-forth between the White House and Democrats. This time around, Meadows has had a bigger influence, much to Democrats’ chagrin.
On Wednesday, Trump seemed to ease his position, saying that he could support a larger bill and he thinks he can get the Republicans on board with a higher price. Now it’s a question of whether his actions will support his words.
The Fact There’s Little Support For The Compromise
This week, a group of bipartisan representatives dubbed the Problem Solvers Caucus developed a proposal that would offer a bill with the price tag of $1.5 trillion. It would include stimulus checks of $1,200 per person and $500 per child. Instead of $900 billion for state and local aid like Democrats want or $150 billion that Republicans prefer, the bill would provide $500 billion. For unemployment checks, it would add $450 per week for the first eight weeks and $600 additional for five weeks.
By and large, it’s less than what Democrats sought and more than what Republicans wanted.
Like most compromises, both sides got kind of what they wished, but just not to the full extent. The reception for the bill has been lukewarm at best.
Neither House leaders nor Republican Senators have shown much support for the proposal. For the House, Pelosi has made it clear she doesn’t plan on voting on a bill until both parties have a fully supported compromise.
The Fact Checks Could Get Nixed From A Deal
When the Republican Senators tried to move forward on a skinny stimulus bill, they showed a wiliness to remove stimulus checks from the discussion. It’s shocking only because it was the one portion of the stimulus proposal originally offered by Republicans – dubbed the HEALS Act – that matched the HEROES Act.
McConnell tried to move forward with a skinny version of stimulus last week with a price tag of about $300 billion in new aide and no checks to people at home.
While the bill had no chance to move forward on the Senate floor, McConnell wanted to try to use it to position Democrats as preventing stimulus. It would also help Republican Senators up for reelection, who don’t want to sign a big stimulus package as they canvas for votes.
Even though the bill had no chance of passing, it’s a signal that in order to produce a compromised bill, there’s a possibility that the checks won’t be included.
The Fact The Fed Has Asked For Help
While the economy has seen a few glimmers of hope, from the rise of the stock market or the decreases in total number of people unemployed, it remains on very slick footing. First, while unemployment has improved from shortly after the lockdowns, over 12 million people continue to collect unemployment checks. Consumer spending also dipped in August, as unemployment benefits from the initial stimulus package ran out. In July, while benefits remained, spending rose by 1.4%.
But maybe most glaring of all is the words of the Federal Reserve, which has continued to pressure lawmakers to pass more stimulus. The Fed is notorious for not making political statements, trying to avoid stepping into those debates. It’s only in moments of fiscal or economic concern will they pressure lawmakers more directly.
“A lack of action or an inadequate one presents a very significant downside risk to the economy today,” Chicago Fed President Charles Evans said last month.
The board, including Chairman Jerome Powell, continues to make similar comments, both in words and action. This week, the Fed announced that interest rates would likely remain at or near zero through 2023.
The Fact There’s An Election Around the Corner
Overhanging all the stimulus discussions is the upcoming election. The reason Congress can’t come to a compromise could very well have to do with November 3. Democrats may believe they can get a better deal in January, if they win the presidency and the Senate. Republicans may view the idea of a large spending bill as an antithesis to what they’re presenting to voters, preventing them to move forward.
But as incumbents, both sides would likely benefit from a deal, since they can present how they’re aiding the economy during the COVID recession to voters just as people lock in votes.
Yet, while the election seems both around the corner and a million miles away, so does a compromise at this point. It’s just hard to believe.