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.”
- America Is Too Broken to Fight the Coronavirus – Michelle Goldberg, New York Times
- A Plague of Willful Ignorance – Paul Krugman, New York Times
- Americans Are Failing the Mask Test – Tyler Cowen, Bloomberg
- As Trump Ramps Up His Coronavirus Denialism, GOP Allies in Hard-Hit States Are Singing a Very Different Tune – Aaron Blake, Washington Post
- Trump Has Raised the White Flag in the Fight Against Covid-19 – Michael Gerson, Washington Post
- A Political Disaster Is Looming for Republicans on Health Care – Paul Waldman, Washington Post
- Big Pharma Must Suspend Summer Price Hikes Amid Historic Economic Uncertainty – Lauren Aronson, Morning Consult
- How the IRS Could Begin to Fix the Tax Gap – Lawrence H. Summers and Natasha Sarin, Washington Post
- The Fed’s Risky Business Is Worth It – Bill Dudley, Bloomberg
- The House Should Save America's National Parks – Bloomberg Editorial Board
- Pandemic Forced Insurers to Pay for In-Home Treatments. Will They Disappear? – Julie Appleby, Kaiser Health News
- Restaurants Will Endure With Continued Support From Lawmakers – Thomas Boucher, Morning Consult