Pelosi Says $1.3 Trillion ‘Not Enough’ for Next Coronavirus Relief Bill
House Speaker Nancy Pelosi said Thursday that the next coronavirus relief bill, which is expected to include some kind of extension of the $600 per week unemployment supplement, would cost at least $1.3 trillion — but that amount is “not enough.” In an interview on Bloomberg Television, Pelosi said she was confident Republicans would “come around” to make a deal in the coming weeks, with the final package totaling close to the $3 trillion proposed by House Democrats.
White House says stimulus must include payroll tax cut: So the two sides are potentially trillions of dollars apart, and the prospects for reaching any deal may be further complicated by White House insistence that any package include a payroll tax cut. “As he has done since the beginning of this pandemic, President Trump wants to provide relief to hardworking Americans who have been impacted by this virus and one way of doing that is with a payroll tax holiday,” White House spokesman Judd Deere said in a statement cited by The Washington Post. “He’s called on Congress to pass this before and he believes it must be part of any phase four package.”
Lawmakers, including key Republicans, have been cool to the idea, which Trump and administration officials have been pushing for months. A spokesperson for Sen. Chuck Grassley, the Republican chair of Senate Finance Committee, said, “Chairman Grassley looks forward to working with the Administration and his fellow lawmakers on the next coronavirus bill. A number of tax relief proposals will be part of the discussion.” That’s not exactly a wholehearted endorsement of a payroll tax cut.
Emergency unemployment aid expires soon: The $600 per week boost in unemployment benefits — which has helped keep millions of Americans afloat since payments began in April — expires in most states on July 25, and it looks increasingly likely that Congress will allow the program to lapse or end, even as lawmakers negotiate a potential extension. The failure to pass an extension before July 25 means there could be a period of at least several weeks with no additional unemployment payments, which could be disastrous financially for the millions of unemployed workers in the U.S., as well as for the economy as a whole. (For more details on how this could play out, see this CNBC piece.)
The Trump administration said earlier this week that it was open to a limited extension at a lower payment level, possibly between $200 and $400 per week. Pelosi on Wednesday signaled that she is willing to negotiate with Republicans on the size of the supplemental payment, though any agreement would depend on how much money is provided in the form of direct assistance to individuals as part of the next stimulus package.
Senate Majority Leader Mitch McConnell (R-KY), however, sounded less interest in extending the extra unemployment payments, saying Tuesday that the “bonus” had been a “mistake.” Many Republicans believe the higher unemployment payments are motivating workers to avoid going back to their jobs, depressing the recovery. Many Democrats, however, argue that there simply isn’t enough work available for the more than 30 million people currently receiving unemployment assistance, and that the supplements are needed to prevent the economy from sliding backwards.
Many other obstacles: Pelosi reportedly wants to include another direct payment to individuals in the bill, and McConnell has said he’s open to the idea, though it’s likely that any payments will be more strictly limited by income. Both leaders also say they want to see aid for schools in the package, and Republicans reportedly are looking at tying aid to schools reopening.
Those and numerous other issues will be difficult to negotiate. Democrats want to include housing assistance for renters and homeowners, but Republicans are opposed. Pelosi wants to provide substantial aid — as much as $1 trillion — to state and local governments, but McConnell and the White House have resisted the idea, expressing concerns about ‘bailing out’ governments that have run large deficits. Democrats also want more food aid and tougher workplace safety rules, but Republicans have resisted, while maintaining that doctors and businesses need more liability protection from lawsuits over potential coronavirus-related illnesses and deaths.
Negotiations expected to start next week. Congress returns to town from its Fourth of July break on Monday and negotiations over the relief bill are expected to begin next week. But it looks like there’s a good chance it may be too late to extend the enhanced unemployment payments without disruption.
Schumer, Democrats Propose $350 Billion in Aid for Minority Communities
Minority Leader Chuck Schumer and 14 Senate Democrats on Thursday proposed to invest $350 billion in communities of color, which have been hit disproportionately by the coronavirus pandemic, as part of the next aid package.
The proposal would provide $135 billion for child care, mental health, primary care and job training and $215 billion for infrastructure including high-speed internet; tax credits for homeowners and renters; and Medicaid expansion. The proposal would be partially paid for by re-programming $200 billion of unspent funds provided by the CARES Act passed in March.
"Long before the pandemic, long before this recession, long before this year’s protests, structural inequalities have persisted in health care and housing, the economy and education,” Schumer said in a statement. “Covid-19 has only magnified these injustices and we must confront them with lasting, meaningful solutions that tear down economic and social barriers, and reinvest in historically underserved communities. The Economic Justice Act is a needed step in a long journey to address systematic racism and historic underinvestment in communities of color."
Quote of the Day
“Never before in our history has Congress spent so much money so quickly as we have in response to COVID-19. Unprecedented spending, while necessary, creates an unprecedented opportunity for funds to be misused and other forms of mischief. Although the Administration has taken limited steps to increase transparency and accountability, it is incumbent upon Congress to further strengthen oversight.”
– 17 Blue Dog Democrats in a letter to congressional leaders asking that Congress “protect taxpayer dollars” by passing legislation to stop improper coronavirus payments to dead people, strengthen inspectors general, require more information from federal agencies and have the Federal Reserve record and release details of meetings pertaining to pandemic response. Read more at The Hill.
FreedomWorks President: ‘No New Spending as Part of Coronavirus Relief Bills’
Adam Brandon, president of FreedomWorks, the conservative and libertarian advocacy group, says that the federal government can’t afford to spend any more on coronavirus relief. In an opinion piece at The Hill, Brandon argues that while another coronavirus aid package may be inevitable, it shouldn’t extend the $600 in enhanced weekly unemployment benefits set to expire this month.
Economists warn that cutting off those benefits could sharply reduce incomes for some 30 million Americans, which could reverberate across the economy. A new study released Thursday by JPMorgan Chase found that unemployed households actually increased their spending once they began receiving benefits. "The fact that spending by benefit recipients rose during the pandemic instead of falling, like in normal times, suggests that the $600 supplement has helped households," the report says.
But Brandon argues that extending the benefit would hurt businesses:
“Not only would extending these benefits drive up the deficit, which already exceeds $2.744 trillion this year and is expected to continue to rise, but it would also deal a serious blow to small businesses who may need workers as they struggle to pick up the pieces from the economic shutdowns that sent the economy in a tailspin.
“Paying workers more to stay home than to return to work is a surefire way to cause thousands of small businesses -- a cornerstone of the economy across the country -- to go under.”
What’s more, he says, extending the federal unemployment benefit may be “a stepping stone on the path to universal basic income.” A better idea, he suggests, would be to cut payroll taxes, as President Trump is reportedly demanding. “Businesses deserve the support they need to safely and responsibly reopen,” he writes. “This starts with no new spending as part of coronavirus relief bills.”
Jobless Claims Top 1 Million for 17th Week in a Row
Another 1.3 million Americans filed initial claims for state unemployment benefits last week, the Labor Department said Thursday. New applications fell for the 16th straight week, but the size of the decrease fell short of expectations, with just 10,000 fewer filings than the week before. It was the 17th straight week in which initial claims exceeded 1 million.
In addition to the claims through the state systems, more than 900,000 people applied for benefits through the federal Pandemic Unemployment Assistance program, which provides assistance to self-employed and gig workers who are usually ineligible for unemployment aid.
In all, about 2.2 million people applied for unemployment benefits in the week ending July 11. (Using data that is not seasonally adjusted, the number is 2.4 million).
“The level of jobless claims is stalling -- and that's a very worrying sign,” said Heather Long of the Washington Post.
Chart of the Day: The Cost of Covid-19 Hospitalizations
The median charge for hospitalization of a Covid-19 patient ranged from $34,662 for those between the ages of 23 and 30 to $45,683 for the 51-60 age group, according to a new analysis of commercial claims by not-for-profit research firm Fair Health. (h/t Modern Healthcare and Morning Consult)
The Case of the Disappearing Covid Data
A sudden change by the Trump administration in how coronavirus data is reported is raising concerns among political leaders, public health experts and state and hospital officials that it could lead to increased burdens on already strained facilities and reduce transparency about the state of the pandemic.
“To have the CDC not be able to distribute publicly the number of hospitalizations and the number of deaths is going to hurt us in our bid to end this crisis,” Senate Minority Leader Chuck Schumer said oin a statement. “Because when you don't know the truth, and you don't go after the truth, inevitably, you lose out.”
Health care watchers noted Wednesday that previously public data like a dashboard tracking hospital capacity were no longer available on the Centers for Disease Control and Prevention website.
The change came after the Trump administration transferred control of the information to the Department of Health and Human Services. The CDC reportedly restored the site’s previous dashboards later in the day, with data through Tuesday and a note saying: “This file will not be updated after July 14, 2020 and includes data from April 1 to July 14.”
HHS spokesman Michael Caputo told CNBC the CDC was directed to make the data available again. “Yes, HHS is committed to being transparent with the American public about the information it is collecting on the coronavirus,” he said. “Therefore, HHS has directed CDC to re-establish the coronavirus dashboards it withdrew from the public on Wednesday.”
Some experts expressed concerns that the change could lead to the data being politicized, or could hamper tracking of the pandemic.
Dr. Jennifer Nuzzo, an epidemiologist at Johns Hopkins University, told CNBC she was concerned that the administration didn’t appear to have detailed planning for the sudden transition in data reporting from the CDC to HHS and didn’t give hospitals or researchers a warning about the change.
“The question is, what are we going to lose in this transition, and in particular at a moment where we really don’t want to lose any ability to understand what’s happening in hospitals,” she said. “I think it’s reasonable to worry that it could lead to erosion of capacities at a moment where we very much can’t afford to lose any abilities.”
- Allowing Unemployment Benefits to Expire Is Political and Economic Malpractice – Jared Bernstein, Washington Post
- 9 Charts That Show the Good, the Bad and the Alarming of This Early Economic Recovery – Heather Long, Washington Post
- I’m a GOP Governor. Why Didn’t Trump Help My State With Coronavirus Testing? – Gov. Harry Logan (R-MD), Washington Post
- The American Right Is Pushing 'Freedom Over Fear'. It Won't Stop the Virus – Jan-Werner Müller, The Guardian
- A Second Coronavirus Death Surge Is Coming – Alexis C. Madrigal, Atlantic
- Testing Is on the Brink of Paralysis. That’s Very Bad News – Margaret Bourdeaux et al, New York Times
- Start Building the Post-Pandemic Economy Now – Karl W. Smith, Bloomberg
- Wall Street Sets High Stakes for Next Fiscal Stimulus – Brian Chappatta, Bloomberg
- Covid Leaves Its Mark on Three Health Giants – Max Nisen, Bloomberg
- We Missed One Chance to Open Schools Safely. Here’s the New, More Expensive, Option – Danielle Allen, Washington Post
Where Is My Income Tax Refund? – Howard Gleckman, Tax Policy Center
- How Can The IRS Do Correspondence Audits When It Can’t Open Its Mail? – Janet Holtzblatt, Tax Policy Center
- Why America Needs a National Innovation Plan Right Now – John R. Allen and Darrell M. West, The Hill
- Americans Want Evidence and Data to Drive COVID Decisions — They Don't Believe It's Happening – Benjamin Harris and Kate Tromble, The Hill