The Status of Stimulus Talks

Robert Brooks Contributor
The Status of Stimulus Talks
Read Time: approx. 2:56

This is the top story from our daily newsletter published on December 4, 2020. To have this and more delivered directly to your inbox scroll down and enter your email or click here to sign up.

Top story from the CNBC news team: “Senate Majority Leader Mitch McConnell said Thursday that he has seen ‘hopeful signs’ toward Congress striking a coronavirus stimulus deal before the end of the year. On Wednesday, House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer urged McConnell to use a $908 billion bipartisan stimulus plan as the basis for relief talks, endorsing a smaller relief bill than they previously have.” Here’s what both sides have to say about the elusive fifth coronavirus relief bill:

On the Left: Democrats and left-leaning outlets are optimistic that a near-term agreement might be reached, but are confused about why Pelosi and Schumer are just now endorsing a much cheaper aid package. In an opinion piece for the Washington Post, Greg Sargent says the new $908 billion number mentioned above signifies “a remarkable turn of events. Earlier this fall, Democrats were calling for $2 trillion in new spending. Now they’re willing to accept less than half of that.” (Vice, which is a little further left on the political spectrum, echoed this sentiment in an article titled: Democrats Just Caved on COVID Stimulus Checks). Sargent says, “here’s what I think is going on with Democrats right now.” He writes that the “starting point for understanding their perspective is what Joe Biden said on Monday. The president-elect commented that anything that passes during the lame-duck session will likely be ‘at best just a start.’ This means that Democrats badly want to get something done before the end of the year just to throw some money at the deepening economic crisis, on the thinking that next year will offer new opportunities.” From a strategy standpoint, Sargent believes the $908 billion number will chip away McConnell’s tightly-knit contingent of Republicans who have had an easy time saying “no” to the much bigger stimulus Democrats want. A reduced version might mean that “several Republicans (such as Sen. Susan Collins of Maine and Sen. Mitt Romney of Utah) could endorse the compromised plan.” After, Sargent highlights Biden’s beliefs that once he’s in office “he’ll be able to exert a lot more pressure on Republicans.” This could mean more fiscal stimulus later in the first quarter of 2021.

On the Right: Conservatives and right-leaning outlets generally favor a more targeted approach. On the first of the month “McConnell circulated a new framework for coronavirus stimulus legislation to Republican members that would establish a fresh round of funding for the small-business Paycheck Protection Program and implement widespread liability protections,” Axios reported. The first item on the copy of the draft proposal calls for rescinding “all unused money from lending facilities, allowing those funds to be used for other important purposes.” This highlights the GOP position that there is no reason for a $2 trillion aid package that the Democrats were originally calling for if there is still money left over from the bills passed earlier this year. Less funding shouldn’t be confused for less attention to stimulus talks, however. Karen Townsend of Hot Air thinks that coronavirus relief should absolutely be prioritized because it’s “set to expire at the end of December. However, this week Pelosi and “the House is taking up decriminalizing marijuana and a ban on breeding and private ownership of big cats.” Townsend highlights a tweet from House Minority Leader Kevin McCarthy (R-CA), which reads: This week, your House Democrat majority is tackling the tough issues by holding a vote on legalizing pot and banning tiger ownership. Nothing for small businesses. Nothing for re-opening schools. Nothing on battling the pandemic. Just cannabis and cats.”

Flag This: If an agreement can be reached, one of the items that may not be included in the fifth iteration of support are The Economic Impact Payments, otherwise known as stimulus checks. Remember, direct cash payments were sent out earlier this year as part of the CARES Act. According to a Gallup poll in September, “seven in 10 Americans (70%) said they would support the government sending an additional economic impact payment (EIP) to all qualified adults.” HuffPost said, “People used the money for basic expenses such as food, shelter, utilities and car payments, according to the Congressional Research Service.” While that may be true, the direct checks were also used for other quarantine activities, such as day trading. According to software and data aggregation company Envestnet Yodlee, securities trading was one of the most common uses for the government stimulus checks in nearly every income bracket. Here’s a final thought: Would you be willing to get a COVID-19 vaccine in exchange for a $1,500 stimulus check? Here’s how one bold proposal would work.