What’s in Pelosi’s Next Massive Aid Package?

What’s in Pelosi’s Next Massive Aid Package?

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Plus: Trump advisers' debt fears
Monday, May 11, 2020

What’s in Pelosi's Next Coronavirus Rescue Plan?

Even as the Trump administration and congressional Republicans take a wait-and-see approach to the next phase of coronavirus relief, House Democrats led by Speaker Nancy Pelosi are racing this week to finalize their own proposals for a multitrillion-dollar rescue package.

“We all agree that we must put more money in the pockets of the American people. This is not only necessary for their survival but also is a stimulus to the economy. Direct payments, unemployment insurance, rental and mortgage help and student loan assistance are essential to relieve the fear that many families are facing,” Pelosi wrote in a Mother’s Day letter to colleagues, adding, “Not acting is the most expensive course.”

GOP in ‘no rush’: President Trump said Friday he’s “in no rush” to pass another bill. White House economic adviser Larry Kudlow said that, while informal talks are happening, formal negotiations are paused and likely will be until early next month. And Senate Majority leader Mitch McConnell said Monday that there’s no urgent need for additional legislation.

"We're basically assessing what we've done already. I'm in constant communication with the White House and if we decide to go forward we'll go forward together," McConnell told reporters, according to The Hill. "I don’t think we have yet felt the urgency of acting immediately. That time could develop, but I don’t think it has yet."

McConnell reportedly declined to specify a timeline for the any additional coronavirus package.

What’s in the Democratic package: The Democratic package, dubbed CARES 2, hasn’t been unveiled yet, but a vote could happen as soon as Friday or slip into next week. If or when the bill passes, it likely won’t mean all that much: “Neither this bill nor anything resembling it will ever become law -- it’s a Democratic wish list filled up with all the party’s favored policies,” Politico reports. But it will serve as a political messaging tool — one that House Democrats will use both to show that they’re still working to address the pandemic and to set out their priorities for future negotiations.

Here’s a look at eight key provisions expected in the bill, according to The Hill:

  • More aid for state and local governments: Democrats are reportedly looking to provide three separate pots of money for states, counties and municipalities at a total cost approaching $1 trillion.
  • More direct payments: Democrats are reportedly coming together behind a plan to give most Americans $2,000 a month for as long as the pandemic lasts.
  • More help for workers and businesses: Democrats will call for further expansion of unemployment benefits as well as additional aid for small businesses, either under the Paycheck Protection Program, which provides grants and loans to keep small businesses afloat and employees on the payroll, or a revamped alternative. Democrats are “eyeing a strategy for replacing the PPP with a program that provides federal grants directly to employers, allowing workers to remain employed — and receiving health benefits — without navigating approval through the middleman banks,” The Hill says.
  • Rent and mortgage assistance: Reps. Denny Heck of Washington and Maxine Waters of California have proposed a $100 billion program to help people pay their rent and utilities.
  • Expanding broadband service to rural and low-income areas: This may be the main piece left from scrapped plans to propose a huge infrastructure spending package.
  • Money for coronavirus testing, treatment and contact tracing: “In this critical moment for our country, we must demonstrate a clear strategy of testing, tracing, and treatment,” Pelosi said in her letter.
  • The U.S. Postal Service: Democrats are reportedly aiming for at least $25 billion in aid.
  • Food programs: Democrats has wanted a 15% increase in the Supplemental Nutrition Assistance Program, commonly called food stamps, as part of the first CARES Act. That didn’t happen, but the party will look to ramp up nutritional assistance funding — for SNAP and other programs —in the next bill.

    Top Trump Advisers Want to Limit Debt From Stimulus. One Problem: Trump

    Wary of the cost of surging federal spending to combat the coronavirus crisis, senior Trump administration officials are looking at ways to reduce the additional debt created by any future stimulus, The Washington Post reports, adding that President Trump isn’t likely to go along:

    “The concerns about the deficit are coming from traditional conservatives at the White House, including new chief of staff Mark Meadows and acting budget director Russ Vought. But officials say they are likely to face much more skepticism from President Trump himself. Trump has shown little interest since becoming president in shrinking the deficit and has so far stood firm on his campaign pledge not to alter Social Security. … Meadows, who founded the conservative House ‘Freedom Caucus,’ has warned against an emergency relief package for the states, although he has told others in the White House Trump is unlikely to support deficit-limiting measures being considered and that the president is most focused on improving the economy.”

    The Post says that some White House officials have explored options such as automatic spending cuts once the economy recovers or letting workers receive Social Security benefits before they become eligible. Other ideas reportedly being explored by White House officials include two plans that would allow Americans to receive payments now in exchange for delayed or reduced Social Security benefits.

    A White House spokesperson told the Post that Trump would not support any proposal that cuts benefits.

    Why it matters: These ideas aren’t likely to go anywhere, officials tell the Post, but the discussions themselves are an indication of how troubled some administration officials are with the massive coronavirus spending. Jason Pye, vice president of legislative affairs at FreedomWorks, a conservative advocacy group, told the Post: “A lot of people in the administration are concerned Republicans have completely surrendered the argument on spending, and they want to address it. And it’s an entirely valid concern.”

    At the same time, the discussions may be a tacit acknowledgment that additional coronavirus relief is likely necessary, as many economists insist, even as Trump as top Republicans say they’re in no rush to pass the next stimulus package.

    Chart of the Day: Paths to Recovery

    Some politicians are promising a “v-shaped” recovery, in which the economy bounces back from its coronavirus-induced swoon and rapidly returns to its pre-crisis trajectory, but many experts are now focused on a “swoosh-shaped” rebound, according to The Wall Street Journal Monday. With a swoosh, the economy bounces back but takes a much longer time to return to the trend line. Other possibilities being debated by economists include U, Z, W and L-shaped recoveries, each with its own peculiar dynamics.

    Although there is still enormous uncertainty about how a recovery will play out, it’s becoming increasingly likely that it will take a significant amount of time. “This is not going to be a quick recovery,” Mark Schneider, chief executive of Nestlé SA, told the Journal. “This is going to be a several-quarter, if not several-year kind of process.”

    Tweet of the Day

    Larry Levitt of the Kaiser Family Foundation highlights the need for a more rigorous testing program in the U.S.

    Fiscal Flashes

    Small biz program stretches out its funding: Amid complaints that larger companies were claiming the lion’s share of funds allocated to the Paycheck Protection Program, the U.S. Treasury last week reduced the maximum loan amount from $2 million to $150,000. As a result, the volume of loan approvals has dropped to less than $2 billion a day, extending the life of the program and easing concerns that it would soon run out of money. The Small Business Administration says that $188 billion of the $311 billion Congress provided in a second round of funding in April has been claimed, with the average loan size dropping from $206,000 to $73,000. (Axios)

    Trump administration sees unemployment near 20%: White House economic adviser Kevin Hassett expects the unemployment rate to keep rising. “Right now, looking across the U.S., there are more than 30 million people that are getting initial claims from unemployment insurance, and that's the biggest negative shock to the jobs market that we've seen since World War II,” Hassett told “Face the Nation” on Sunday. “To get unemployment rates like the ones that we're about to see ... which I think will climb up towards 20% by next month, you have to really go back to the Great Depression to see that. I think you can expect to see jobs probably trough in May or June." (CBS News)

    School spending rises: Per capita spending in public schools rose in 2018, the U.S. Census Bureau announced Monday. “The amount spent per pupil for public elementary and secondary education (pre-K through 12th grade) for all 50 states and the District of Columbia increased by 3.4% to $12,612 per pupil during the 2018 fiscal year, compared to $12,201 per pupil in 2017,” the agency said in a press release. The increased spending was driven by higher revenues, which came to $720.9 billion in 2018. (U.S. Census)


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