The Republican Clash Over Coronavirus Aid

The Republican Clash Over Coronavirus Aid

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Plus: More than 38 million jobs lost
Thursday, May 21, 2020

As Unemployment Filings Top 38 Million, McConnell Vows to End Enhanced Benefits

About 2.4 million people filed claims for unemployment benefits last week, the Labor Department announced Thursday, bringing the nine-week total since the coronavirus crisis struck to more than 38 million.

The weekly initial claims data continued on a downward trend, falling for the seventh straight week, but the overall level remains at historic highs. "The jobs numbers will be worse before they get better," Treasury Secretary Steven Mnuchin warned earlier this week.

Meanwhile, the debate over enhanced unemployment benefits — which provide an additional $600 per week in support, over and above state-level payments — continues in Washington.

Senate GOP Leader Mitch McConnell (R-TN) reportedly said this week that the additional benefits were “crazy policy” that might motivate some people to stay on unemployment and avoid returning to work. Although critics have pointed out that workers aren’t able to make that decision on their own, McConnell nevertheless vowed Wednesday that the enhanced benefits "will not be in the next bill,” referring to the next round of relief and stimulus funding currently under consideration.

Top Republican leaders have repeatedly expressed their concerns on the issue and are joining forces with the White House and powerful business lobbies including the Chamber of Commerce to oppose any extension of the enhanced benefits, which expire at the end of July. Mnuchin said Thursday that the administration and lawmakers will need to fix the enhanced unemployment benefits, given what he called “the quirk that in certain cases we’re actually paying people more than they made.”

Conservatives worry that any delay in workers returning to their jobs could slow the recovery. “The government is competing with businesses for workers, and that’s the craziest idea ever,” said Sen. Rick Scott (R-FL). “We can’t hurt our ability to reopen the economy.”

Democrats are pushing for an extension of the benefits, citing the ongoing need for aid amid the worst economic conditions since the Great Depression. “The economic need is not going away,” Martha Gimbel, a labor economist at Schmidt Futures, told The Washington Post. “The fact that we are two months into this, and we’re still getting multi-million claims numbers, speaks to how deep and intense the economic pain is right now.”

What’s next: The enhanced jobless benefits will be a point of contention in the next stimulus bill, which lawmakers are expected to negotiate in the coming weeks. The $3 trillion bill passed by House Democrats last week would extend the benefits through January, but Republicans appear to be unified in trimming those benefits back, if not eliminating them entirely. GOP staffers told the Post that in the end, they expect to see some kind of compromise on the issue, with Congress passing either a smaller weekly enhancement taking effect after July or a one-time bonus for workers who return to their jobs.

Can Republicans Come Together on Another Coronavirus Relief Bill? 

Treasury Secretary Steven Mnuchin said Thursday that there is a “strong likelihood” that Congress will need to pass another coronavirus relief bill, though he said the additional stimulus won’t be needed right away.

“We’re going to carefully review the next few weeks,” Mnuchin said via video at an event hosted by The Hill. “I think there is a strong likelihood we will need another bill, but we just have $3 trillion we’re pumping into the economy and we’re going to step back for a few weeks and think very clearly how we need to spend more money and if we need to do that.”

Mnuchin’s comments come after a number of Senate Republicans, particularly those facing difficult reelection bids, indicated support this week for passing another coronavirus relief bill as soon as next month.

“Publicly and privately, Republicans are signaling that they believe the Senate will have to move beginning in June on another recovery package, calls that many believe will intensify next month after senators hear concerns about the deteriorating economy in their states during next week's Memorial Day recess,” CNN’s Manu Raju and Lauren Fox report. “And some are quietly urging President Donald Trump to get more involved.”

The president earlier this month said he was in “no rush” to negotiate another rescue package, and Senate Majority Leader Mitch McConnell has also argued that there’s no urgency to pass another bill, saying lawmakers need to take time to see how the nearly $3 trillion already provided is working. But Federal Reserve Chairman Jerome Powell warned lawmakers in recent days that the economy may need more support and that the pain from the pandemic could drag on for years, and McConnell may be sensitive to the entreaties of senators looking to hold onto their seats — and the GOP’s Senate majority.

What Some Senate Republicans Are Saying
  • "I think June doesn't need to come and go without a phase four," Sen. Roger Wicker of Mississippi said. According to The Hill, Wicker said that “almost everybody” in the GOP conference “in their heart” wants to move ahead on another relief package next month, even if they aren’t publicly pressing for action.
  • “Congress has a tremendous responsibility to help mitigate the impact of this crisis on our states and our local communities and on the families they serve,” Sen. Susan Collins of Maine said Wednesday. “We must not wait. We should act now.” Collins urged the Senate to start negotiating with the House and warned that “massive layoffs and huge reductions in services” could follow if states, cities and counties don’t get more aid.
  • Sen. Cory Gardner of Colorado urged the Senate to stay in town instead of taking its Memorial Day recess. “It’s unfathomable that the Senate is set to go on recess without considering any additional #COVID19 assistance for the American people. Anyone who thinks now is the time to go on recess hasn’t been listening,” he tweeted. Gardner later told Politico he feels good about the progress made by senators working on changes that would give businesses more time to spend Paycheck Protection Program funds.
  • Sen. Lindsey Graham is pushing Trump to pursue another infrastructure package, despite resistance from Senate Majority Leader Mitch McConnell. "I want to do infrastructure," Graham told CNN. "I told Trump, this is the time. We got it teed up. This is the time to go big. ... It really is a once-in-a-lifetime opportunity to give a facelift to the country." Blunt and Wicker reportedly also want an infrastructure package. “Personally, I’d like to see infrastructure,” Blunt said, according to The Hill. “If we’re going to have to spend money to reignite the economy, I’d prefer to spend it on something that has long-term benefit.”
  • “Optimistically, we might move before the Fourth of July,” said Sen. Roy Blunt of Missouri, “but I don’t know that we move that quick. I do think that we move on a phase four before the August break.” The break is scheduled to start August 8.

GOP may have a hard time reaching consensus: Republicans face some significant internal divisions that may make it difficult to agree on the size and scope of any additional aid. Some want to hold off and warn that there may not be a need to spend more. Others reportedly want narrow tweaks to existing programs. Still others aim to provide a larger, more ambitious package.

“Republicans have been debating ideas, including giving unemployed workers a bonus for returning to companies that reopen, giving small business owners more flexibility on how they handle forgivable loans under the Paycheck Protection Program, providing states and cities more leeway in how they spend $150 billion that's been already approved or whether to give those governments and other distressed industries another massive bailout from Washington,” CNN’s Raju and Fox report.

Pelosi says “it’s just a matter of time”: House Democrats last week passed a $3 trillion relief bill, but Senate Republicans said that legislation was dead on arrival, dismissing it as a “liberal wish list.” House Speaker Nancy Pelosi told Bloomberg TV Thursday that “it’s just a matter of time” before the Senate takes up another package. “I’m optimistic,” she said, “because the American people fully support what we are doing and oppose the Senate obstructing it.”

The bottom line: Another relief package is likely. Michael Pearce, senior U.S. economist at Capital Economics, suggests in a new note to clients that a compromise is likely “because Republicans won’t want to undermine the recovery in an election year and because they need Democrat support to pass a bill limiting legal liability for coronavirus-related claims” against hospitals and businesses. “Overall, it seems likely that the next fiscal package will measure in the billions rather than trillions,” Pearce writes, suggesting that wouldn’t make a huge difference to the economy. “We doubt a substantially larger package would be agreed unless there was a damaging second wave of the virus later this year, in which case the deficit could rise by an additional 10-20 percentage points.”

Chart of the Day

New estimates from Columbia University researchers suggest that about 54,000 fewer people would have died from the Covid-19 pandemic by early May if the United States had begun social distancing measures at the very beginning of March, and about 36,000 fewer would have died if the lockdown measures had started a week later. “It’s a big, big difference. That small moment in time, catching it in that growth phase, is incredibly critical in reducing the number of deaths,” Jeffrey Shaman, an epidemiologist at Columbia and the leader of the research team, told The New York Times.

Fiscal Flashes

US Commits Up to $1.2 Billion for AstraZeneca Vaccine Effort: The Trump administration said Thursday it would provide up to $1.2 billion to drug company AstraZeneca to develop a potential Covid-19 vaccine. The announcement, reportedly the largest the Department of Health and Human Services has announced, will accelerate Phase 3 clinical studies of the potential vaccine as part of the administration’s “Operation Warp Speed” project to develop 300 million doses of vaccine by January. HHS said that the first doses of the vaccine could be delivered as early as October. Many scientists have cautioned that such a timetable is very ambitious and that an effective vaccine could take much longer to develop and manufacture. The government has also backed vaccine-development projects at Johnson & Johnson, Moderna and French drugmaker Sanofi. (New York Times)

More Than 76 Million Americans Deferred Medical Care Over Past Month: Data from the Census Bureau show that, in the past month, more than 76 million Americans put off needed medical care unrelated to Covid-19. “The estimate from the new Household Pulse Survey is the clearest picture yet of how pandemic-related shutdowns led to a staggering drop in people seeking medical care, cratering revenue for doctors and hospitals,” Bloomberg News reports. In all, almost 94 million adults have delayed medical care during the pandemic, according to Census estimates. (Bloomberg)


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