Trump Says Yes to More Stimulus Checks … or Something

By Yuval Rosenberg

Trump Says Yes to More Stimulus Checks … or Something

President Trump kinda sorta committed to another round of stimulus
checks on Monday.

Asked in an interview
with Scripps televisions stations if he’d get viewers (read:
voters) who are struggling financially in Florida, Ohio, Wisconsin
and Michigan — all key swings states in the upcoming election
—another round of stimulus checks, Trump said, “Yeah, we are. We
are.”

Trump’s pledge sounds less than iron-clad. Pressed on how much
and when the next round of coronavirus relief would be, Trump
shifted to touting the pre-pandemic economy before adding, “We will
be doing another stimulus package. It’ll be very good. It’ll be
very generous.”

As for how much the checks would be, the president said, “You’ll
find out about it. You’ll find out.” He said the next package would
be bipartisan and would be done “over the next couple of weeks,
probably” — an unlikely timeframe given what top GOP senators

have said. Senate Majority Leader Mitch McConnell
(R-KY) has indicated that negotiations on the next relief bill will
only begin next month.

Trump has told aides he largely supports another round of
stimulus checks since he believes they will help the economy and
his reelection chances, The Washington Post
reports. But the idea faces resistance from some
conservative lawmakers and White House officials.

“The White House has not officially taken a position on the
matter” and the president hasn’t reached a final decision, The Post
reports, noting that “the president’s advisers and allies are
split,” with Treasury Secretary Steven Mnuchin in favor of a second
round of payments and National Economic Council Director Larry
Kudlow more skeptical about another program matching the first,
which cost about $300 billion. “Probably, we would want to target
those to those folks who lost their jobs and are most in need,”
Kudlow reportedly told Fox Business on Tuesday. “All right, that’s
the speculation on my part, but I think this is -- that’s where
it’s going.”

Mnuchin said Tuesday that a number of different ideas are still
under discussion for the next coronavirus bill, but that it would
be more targeted and focused on the job market. “We’re talking
about a bunch of different ideas that we may need to do in another
bill, and we want to take our time and make sure we’re thoughtful,”
Mnuchin
told reporters. “So whatever we do it’ll be much
more targeted, much more focused on jobs, bringing back jobs and
making sure we take care of our kids.”

The bottom line: Another round of
stimulus checks is still in question, and it would reportedly be
more likely if paired with reductions in the $600-a-week enhanced
unemployment benefit Congress approved in March. That boost in
jobless benefits is set to expire at the end of July and its future
will also be the subject of negotiations.

Quote of the Day

“I don’t kid.”

– President Trump, when asked by CBS
News if he was kidding when he said at his Tulsa,
Oklahoma, campaign rally Saturday that he had asked his
administration to slow down coronavirus testing. White House
officials had defended the remarks by saying they were made in
jest.

4 Potential Pitfalls for the Economic Recovery

Congress is expected to pass another major economic relief and
stimulus bill later this summer, but there is still considerable
uncertainty about its final form. Will it include another round of
stimulus checks, or tax cuts for businesses? Will the unemployed
continue to get additional aid? And will state and local
governments get a lifeline as they confront huge budget shortfalls?

Annie Lowrey of The Atlantic
writes Tuesday that the next set of federal
policies will likely play a key role in how we navigate the serious
pitfalls that the economy still faces, warning that a “second great
depression” could be in the offing if lawmakers fail to respond
appropriately to the crisis at hand. She focuses on four major
issues that will require attention from federal policymakers:

The “household fiscal cliff.” The $1,200 stimulus checks
and enhanced unemployment benefits have kept millions of households
afloat, but they are temporary. If federal aid is pulled back
prematurely, before the economy fully recovers, many of those
households could tumble into poverty.

The decimation of small business. While the Paycheck
Protection Program and other forms of federal assistance appear to
have helped thousands of businesses remain viable in the short run,
the lack of consumer demand in a high-unemployment economy, along
with the continued need to maintain some degree of social
distancing as the coronavirus continues to spread, will likely
force many small businesses to close their doors for good in the
coming months.

The budget crunch for state and local governments. With
plummeting tax collections and soaring safety net spending, state
and local governments are facing massive deficits that are already
forcing layoffs and service cutbacks. Without targeted aid from the
federal government, millions of public employees could lose their
jobs, creating another drag on the recovery.

The ongoing health crisis. “Ending the pandemic would
have been the single best thing the federal government could have
done to preserve the country’s wealth, health, and economic
functioning,” Lowrey says. But the U.S. has failed to develop and
deploy some of the basic tools used to control the spread of the
coronavirus, and the result is a new surge of cases in some states
that are reopening. Given the lack of preparation and
well-coordinated response, parts of the country are likely going to
have to muddle through well into the fall, depressing the economic
rebound.

Still, the good news is that all of these potential pitfalls can
be addressed by federal policies, Lowrey says, ranging from income
support to a nationwide test-and-trace system. All that’s required
is for policymakers to make the right decisions.


Read the full piece at The Atlantic.

Number of the Day: 28,000

The U.S. has about 28,000 contact tracers, Centers for Disease
Control and Prevention Director Robert Redfield
told Congress Tuesday. But the country needs
upwards of 100,000 of these workers, who help control the spread of
the coronavirus by contacting all those who have tested positive
for the illness, Redfield said. Congress has provided $25 billion
for testing and tracing so far, and the stimulus package that the
House passed in May provides another $75 billion for those
functions.
Poll of the Day: What Voters Want if Covid Cases
Climb

A new
survey by Morning Consult finds that most voters
(53%) don’t think the United States is prepared to handle the
economic consequences of a second wave of coronavirus, while 45%
said the country is not prepared for the public health impact of a
second wave. If their state reported an increase of Covid-19 cases
in the next month, voters are most likely to support quarantines
and additional aid to small businesses. They’re less supportive of
additional closures of non-essential businesses.

The poll of 1633 registered voters was conducted between
June 16 and June 18. It has a margin of error of 2 percentage
points.

A ‘Wacky’ Tax Credit Idea: $4,000 for Vacation

Sen. Martha McSally (R-AZ) wants to use a tax credit to encourage
Americans to take a vacation over the next two years. Under her
proposed TRIP Act, adults would be able to tap a $4,000 tax credit
for travel within the U.S., with eligible expenses including
lodging, transportation costs and entertainment. And the credit
would apply to each adult, so a couple could claim an $8,000
credit, plus another $500 per child.

While McSally says her proposal is aimed at reviving the
domestic tourism industry, critics point out that the
non-refundable credit won’t do much good for the millions of
Americans facing lost jobs, reduced incomes and an uncertain
future.

“That idea [is] one of the wackiest I’ve come across in recent
months in an effort to stimulate the economy,” financial adviser
Ric Edelman
told Yahoo Finance. “It’s tone deaf and doesn’t
acknowledge that there are millions of American households who
can’t afford to pay their rent or afford to buy food or
medicine.”

Matthew Gardner, a senior fellow at the left-leaning Institute
on Taxation and Economic Policy,
says that the loose requirements in the bill mean
“that any car owner with an ounce of creativity should be able to
gin up an excuse for taking a tax credit for every tank of gas
they’ve purchased in 2020.” That, says Gardner, makes the bill “an
invitation to tax avoidance.”

Send your tips and feedback to yrosenberg@thefiscaltimes.com.
Follow us on Twitter:
@yuvalrosenberg,
@mdrainey and
@TheFiscalTimes. And please tell your
friends they can
sign up here for their own copy of this
newsletter.

News

Views and Analysis