House Speaker Nancy Pelosi, 80, signaled she’s willing to cut the $3.4 trillion HEROES Act in half to get a deal with Republicans. So far, Republicans have refused to budge on their $1 trillion offer, designed to continue enhanced unemployment benefits of $300 a week and extend the Payment Protection Program [PPP] designed make businesses whole after losing their revenue stream during shutdowns during the coronvirus AKA SARS CoV-2 or Covid-19 crisis. Lawmakers expect the economy to continue needing stimulus while the economy opens up after lockdowns in March through June, driving the nation’s record 3.5% unemployment rate to over 11%. Former President Bill Clinton, 74, criticized the U.S. economy last night at his presentation to the Atlanta-based Democrat National Convention. Clinton said no other country has seen its unemployment rate triple.
Clinton used his time to highlight that the economic collapse from Covid-19 was more severe in the U.S. than anywhere in Europe or Asia. Whatever the differences with the European Union [EU] or Great Britain, all EU states have been struggling like the U.S. with elevated unemployment. Unlike the EU, the U.S. has far less union-protected jobs, less likely to shed jobs during the Covid-19 crisis. Germany, the EU’s most prosperous country, watched its GDP fall 10.1%, about the same as the U.S. Clinton cleverly distorted his convention speech, suggesting the U.S. economy is far worse than its European allies. Great Britain watched its GDP fall by 20.4% or annualized drop of 59.8%, a staggering drop in productivity, far worse than anything in the U.S. France watched its GDP drop 14%, Italy 12% and Spain 19%, all reeling from the global coronavirus pandemic.
Clinton’s speech to partisan delegates, potential Democrats and crossover voters indicateds that Trump’s economy has been a disaster. Actual data shows that the EU and Asia are equally bad off if not worse than the U.S. Knowing the economic backdrop dropping 32.9% in the Second Quarter, U.S. GDP is officially in a deep recession, hoping for better days in 2021. Pelosi knows that U.S. workers are hurting less than three months before the election, requiring Congress to act swiftly to make things better. “We have to try to come to that agreement now,” Pelosi told Politico. Senate’s 78-year-old Majority Leader Mitch McConnell (R-Ky.) refused to accept the $3.4 trillion HEROE’s Act, thinking it would damage long-term economic growth. “We’re willing to cut our bill in half to meet the needs right now,” Pelosi said, asking McConnell to compromise on a new relief bill.
Pelosi’s HEROE’s Act sought to give cities, counties and state a trillion dollars, something opposed by Republicans, believing that Democrat-run states have had fiscal problems for years. “We’re willing to cut our bill in half to meet the needs right now. We’ll take it up again in January. We’ll see them again in January. But for now, we can cut the bill in half,” hoping by that time Trump will not longer be president. With unemployed workers hurting now before the election, Pelosi cannot afford to look like she’s playing hardball with Trump, while U.S. workers suffer. Democrats have many things they want in the HEROE’s Act but now isn’t the right time for impose a wish list on McConnell. Democrats don’t want more distractions in the middle of their national convention to detract from whatever momentum they get from the convention heading to the Nov. 3 election.
Democrats have spent their convention ripping Trump, not saying exactly what they plan to do if they’re handed the White House Jan. 20. Trump’s been challenging the attacks on Twitter, holding scaled-down rallies in battle ground states, where the election will be won or lost. When it comes to fashioning a relief bill, it’s going to be difficult for Pelosi to convince McConnell that cities, counties and states should be fed cash at taxpayers’ expense. Republicans have watched the U.S. dollar lose value to foreign currencies due to $28 trillion spiraling national debt and $3.8 trillion annual budget deficit. Trump wants Pelosi to scale back demands to deal with enhanced unemployment benefits and more payroll protection. Raising city, county and state budget deficits won’t fly with Republicans who are trying to target the next relief package to individuals and businesses.
Closing the gap between Republicans and Democrats, Pelosi will have to wait until 2021 to provide more relief to cities, counties and states. Republicans expect, as the recovery continues, for states to collect more tax revenue from businesses now opening up, generating more tax revenue. What Pelosi thinks will happen in January is anyone’s guess. What clear now is that she’s ready to let go of the May 31 HEROE’s act to get a deal before the election. With about $2 trillion separating both sides, McConnell has refused to split-the-difference, instead holding firm on his $1 trillion offer. Enhanced unemployment benefits and more payroll protection is far easier for Republicans than throwing cash at cities, counties and states running big deficits. Pelosi’s sudden willingness to compromise with McConnell indicates that House Democrats are being blamed for the impasse.
