Going down to the wire July 31, the CARES Act stimulus bill, that gave a $600 bonus to ordinary unemployment compensation, is about to expire, with millions of unemployed workers slated to lose weekly income. With Democrats pushing hard for a $3 trillion bailout that extends the $600 unemployment bonus for six months, the White House and Senate Republicans called the demand “Democrat wish list.” Treasury Secretary 57-year-old Steve Mnuchin looks at a $1 trillion stimulus bill, reducing the bonus on unemployment compensation to $200 a week. Minuchin and 74-year-old President Donald Trump cite evidence that many laid off workers refuse to return to work because they get more cash on unemployment compensation. Republicans see rising federal budget deficits and a soaring national debt as reason enough to cut back on the next round of stimulus.
Trump’s Chief of Staff 61-year-old former congressman Mark Meadows said both sides were a long way from a deal, with Democrats insisting on three times the size of the bailout. “No deal certainly becomes a greater possibility the longer these negotiations take,” Meadows said entering House Speaker Nancy Pelosi’s (D-Calif.) office for a new round of talks. “Were nowhere close of a deal,” Meadows said. “It means enhanced unemployment insurance provisions will expire,” leaving millions of unemployed people unable to pay their bills. With unemployment running at over 11% nationwide, the prospects of returning any time soon to pre-Covid-19 3.5% unemployment remains a distant wish. With the national debt approaching $28 trillion, federal budget deficits at $3.4 trillion and rising, Republicans want Democrats to scale back the bailout legislation. Democrats reject Trump’s suggesting that the White House and Congress work on short-term bailout legislation.
Pelosi and Senate Minority Leader Chuck Schumer (D-N.Y.) reject the idea of a stop-gap spending bill, demanding the Republicans negotiate for long-term stimulus legislation. “Speaker Pelosi and Leader Schumer has made it very clear that they’re not going to do that,” Meadows said, rejecting any short-term legislation. Pelosi and Schumer want another $3 trillion bailout, even bigger that the March 27 CARES Act. If both parties split the difference the new stimulus bill would wind up about $2 trillion, something that could work for Democrats as long as cities, counties and states were part of the bailout provisions. Trump has said he opposes cities receiving direct bailout payments because they’ve obstructed reopening plans, now claiming they’ve run out of cash. Pelosi thinks with Trump’s low approval ratings, he’ll compromise only three months before the Nov. 3. Election.
When you consider how many unemployed workers suffer with Republicans and Democrats posturing for the election, you’d think that a House-Senate conference committee could come up with a compromise. Both sides like to play chicken with unemployed workers caught in the middle. “They [Republicans] have not comprehensive plan, they are trying to come up with a skinny little bill that doesn’t address the moment, and they can’t even pass that in their own Senate,” Schumer said. Schumer knows the grave consequences to the U.S. economy of piling on more excessive debt, now approaching $28 trillion. Wall Street can’t keep the economy afloat indefinitely with both sides bickering over dollars-and-cents. When Schumer talks of a comprehensive plan, he’s talking about a Democrat wish list to fund many programs unrelated to economic stimulus.
No one at the White House or on Capitol Hill knows how long the coronavirus AKA SARS CoV-2 or Covid-19 crisis will continue. Dr. Robert Redfield, 69, head of the Centers for Disease Control and Prevention [CDC], worries about a double-whammy in the fall, when Covid-19 joins the seasonal flu in what promises a challenging flu season. With the economy already in recession, shutting down the economy again is out of the question, prompting mayors and state governors to continue reopening businesses, even where there’s a spike in the virus. Pelosi and Schumer were insulted by the Republicans $1 trillion offer, acting like it’s chump-change. Today’s national debt and budget deficits threaten long-term recovery to the U.S. economy, prompting Republicans to take a more cautious approach. Instead of playing hardball, both sides should start to compromise.
Wherever the cash goes in the next round of bailouts, it should not go to well-heeled corporations and especially to family members of Congress tied to certain companies. When you consider the lost revenue to cities, counties and states around the country, it would make a lot more sense of make city, county and state government whole because of services they provide to communities. Issuing direct checks to individuals and families also makes sense to keep the consumer spending going, staving off a more protracted recession in the months ahead. Quibbling over the amount of bonus unemployment compensation does no one any good, especially workers that must figure out how to make ends meet. Continuing the moratorium on foreclosures and evictions also must be top priority for any stimulus legislation. With Democrats and Republicans off by $2 trillion, it’s time to split the difference.
