House Speaker Nancy Pelosi, 80, showed she’s still a tough negotiator, squeezing the White House to compromise on her May 15 $3.5 trillion HEROES Act. Pelosi knew she’d throw everything in the new stimulus bill but the kitchen sink, including forcing the government to allow cannabis businesses to use the international banking system. Pelosi knows that spending $3.5 trillion would push the national debt close to $30 trillion, a number so astronomical it’s even hard to digest for the Federal Reserve Board. Republicans bristle at the idea of adding so much more to the national debt fearing the recent slide in the U.S. dollar could become a free fall, devaluing the dollar against foreign currencies. White House point man, Chief of Staff Mark Meadows, signaled that 74-year-old President Donald Trump was open to continuing the $600 enhanced unemployment benefits.
Trump signaled he’s OK with another round of $1,200 payments to individuals earning $75,000 a year or less income, agreeing to boost consumer spending.. Trump also agreed to enhanced unemployment benefits and a federal ban on evictions and foreclosures. Pelosi has pushed to fund local, county and state governments to a trillion dollars, something not in the GOP bailout plan. But judging by the drop in local, county and state revenues from nationwide coronavirus AKA SARS CoV-2 or Covid-19 lockdowns, failing to bailout out local, county and state government would be catastrophic. As negotiations continue, it’s clear that both sides must give a little to complete the package. With Trump running behind Democrat presumptive nominee former Vice President Joe Biden, the pressure’s on the White House to open up the coffers in an election year.
While Meadows continues to say both sides are a long way off, time is running out because enhanced unemployment benefits ended July 31. Both sides know it will take weeks to reinstate benefits even if a deal were struck tomorrow. Meadows must see that aid to cities, counties and states are essential, since so many services are provided through local and state governments. “We still have a long ways to go,” said Meadows, knowing that time is running out. “I’m not optimistic that there will be a solution in the very near term,” knowing that it’s more important for Trump to come to the rescue. Pelosi showed a willingness to cut the enhanced unemployment benefit as long a cities, counties and state get made partially whole. Even with $1 trillion bailout, local and state governments could still run deficits into the foreseeable future, especially if the economy continues to run downhill.
Republicans want to avoid the unthinkable prospect to a whopping spending bill that crushes the national debt, adding to unsustainable federal budget deficits. If both sides agree to a $2 trillion spending plan, it would go a long way in satisfying both sides. Democrats can’t say that exploding the national debt, no matter who’s in office after Nov. 3, would hurt any chances of an economic recovery. Democrats can’t have it both ways: Blaming Trump for the new Great Recession, while, at the same time, exploding the national debt making future prosperity unlikely. Pelosi couldn’t see the logic in reducing $600 in enhanced unemployment benefits when many companies under the March 27 CARES Act received millions without much scrutiny. Pelosi wants the GOP to give up on giving schools more money if they open their doors to classroom instruction before its safe to do so.
Pelosi criticized Dr. Deborah Birx, a member of Trump’s Coronavirus Task Force, for saying that it’s safe to reopen schools. “If the areas where we have this widespread cases increase, we need to stop the cases, and then we can talk about safely reopening,” Birx said on ABC’s “This Week.” Pelosi had made some disparaging remarks about Birx, suggesting that it was safe to reopen schools. Whatever the differences between House Democrats and the GOP, the time to split the difference has come. Republicans in the Senate led by Majority Leader Mitch McConnell (R-Ky.) aren’t comfortable with adding another $3.5 trillion to the national debt. Democrats must get real about getting priority funding to cities, counties and states. If that’s their priority, then it’s time to stop loading up the HEROES Act with non-essential funding, compromising with Senate Republicans.
Time is running out on Trump to complete a deal with House Democrats before it inflicts more damage on his presidential campaign. Running behind Biden leaves Trump no choice but to play ball with Pelosi, even if it involves growing the national debt. Unless there’s a vaccine soon or a major drop in Covid-19 cases, Trump needs to show he’s serious responding to the needs of 30 million unemployed voters. Quibbling over a few hundred more-or-less dollars for the unemployment only antagonizes potential voters looking to see what concessions the president is willing to make. Treasury Secretary Steve Mnuchin , 57, should continue the number crunching as long as it takes to get a deal that works for both sides. Failure to reach an agreement will only hurt Trump’s uphill reelection bid, now trailing Biden by double digits. Whatever the future holds, the time for a deal is now.
