Federal Update: Is $1 Trillion Enough for a New Economic Relief Package? No.

August 17, 2020

Over the weekend, House Speaker Nancy Pelosi discussed possibly bringing back the members of the House of Representatives, presumably to deal with USPS sabotage and related emergency funding issues.  Meanwhile Senate Minority Leader Charles Schumer is pushing Senate Majority Leader McConnell to bring back the Senate to address additional issues including a new federal emergency stimulus bill (remember: the House passed the Heroes Act in May).  

Below CBPP reports on the urgency of a comprehensive deal rather than the piecemeal approach being employed by Senate Republicans and the White House, especially in light of recent White House statements that it supports some of the other critically important provisions Senate Rs are currently rejecting, to include some state and local aid.  But at the same time, the President continues to call out Governor’s of blue states that he says have mismanaged their state budgets and were doing so long before COVID-19, saying he will not agree to ‘bail out’ blue states for their past mistakes.

At the end of the day, it’s the amount of money each side is willing to agree to that is the sticking point with Senate R’s and the White House continuing to say they will not appropriate more than  $1Trillion in additional assistance for a new bill while the House says it is willing to come down to $2 Trillion.  So one could say that they are getting closer.  Perhaps if both sides come back this week for ‘other reasons’ a deal will materialize? 

Otherwise, we are looking at a timeframe that takes us into the second week of September before lawmakers ‘officially’ return to Washington.  And at that point, they will have two major issues running simultaneously with the ongoing emergency stimulus fight AND the need to pass a new federal budget – quickly. 

Center on Budget and Policy Priorities

Negotiations between the White House and congressional Democrats over an economic relief package have stalled. White House Chief of Staff Mark Meadows has insisted that the package cost no more than $1 trillion, while Democratic leaders have said they could down from the $3.4 trillion cost of the House-passed Heroes Act to about $2 trillion.

The Senate Republican economic relief plan, which costs about $1.1 trillion, leaves out several key measures that President Trump, various Republican senators and governors, or both have indicated they support.

These policies include further fiscal relief for states and localities that face huge budget shortfalls due to COVID-19 and its economic fallout as well as rental and food assistance. And, the plan includes substantially less in supplemental unemployment benefits than the President endorsed in the executive actions he announced on August 8.

These provisions, supported by Republican senators and the President, would cost close to $2 trillion.

There is no pathway to a robust package that meets these well-understood needs and garners bipartisan support and that costs just $1 trillion.

Reaching a bipartisan agreement soon is essential. The President’s recent executive actions cannot come close to accomplishing what’s needed to combat the virus, strengthen a reeling economy, and address the serious and growing hardships that tens of millions of people face.

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