Don’t Count on a Covid Relief Bill Anytime Soon

By Yuval Rosenberg

White House ‘Not Optimistic’ About Reaching Coronavirus
Stimulus Deal Soon

White House Chief of Staff Mark Meadows said Wednesday that he’s
“not optimistic” about reaching a coronavirus relief deal with
congressional Democrats before the end of September and sought to
cast blame for the ongoing impasse on House Speaker Nancy
Pelosi.

Meadows said he has not had conversations with Democratic
leaders since talks broke down nearly three weeks ago and that he
had asked his staff to reach out to Pelosi on Tuesday but did not
anticipate a response. He said that rank-and-file Democrats have
been more open to a deal.

“If we got back in the room with some of their priorities, we
could cut a deal — the president wants to do that. But I’m not
optimistic,” Meadows said in a morning
interview with Politico, adding, "It's really been
Speaker Pelosi really driving this train as a conductor more so
than anybody. And I think she talks privately that she wants a deal
and maybe even publicly that she wants a deal, but when it comes to
dealing with Republicans and the administration, we haven't seen a
lot of action."

Pelosi spokesman Drew Hammill told
Politico that a Meadows' staffer had texted to
confirm that Pelosi’s office had the correct number for the chief
of staff, but did not mention resuming talks. "Democrats have
compromised in these negotiations," Hammill said in a statement to
Politico. "We offered to come down $1 trillion if the White House
would come up $1 trillion. We welcome the White House back to the
negotiating table but they must meet us halfway."

Republicans have refused those demands and continue to work on

their own, narrower package. "We're very close to
having a bill that Republicans are prepared to move on, hopefully
as early as next week," Republican Sen. Marco Rubio of Florida

told “Fox & Friends” on Wednesday.

Government funding deadline looms: As if a pandemic, a
recession, stalemated coronavirus relief talks, racial justice
issues, an election, wildfires and hurricanes weren’t enough for
the nation to deal with, Congress must also agree on government
funding for the fiscal year that will start on October 1. Lawmakers
are expected to have to pass a stopgap measure known as a
continuing resolution, or CR, to extend funding and prevent a
government shutdown just ahead of the elections.

In his interview with Politico, Meadows suggested that Pelosi
may want to link coronavirus relief to such a funding bill as a way
to gain more leverage. “I think the speaker is going to hold out
until the end of September and try to get what she wants in the
funding for the government during the CR or whatever funding
mechanism happens to come up at the end of September,” he said.

Pelosi has rejected the idea of waiting until next month for a
coronavirus deal, saying earlier this month that “people will die”
if Congress didn’t act sooner.

Meadows backed the idea of coupling the bills and doing it
quickly. “I think that if we do a COVID deal right now, we ought to
just do a continuing resolution as part of that solution so that we
take a shutdown off the table,” he said.

Bloomberg News
reports that Senate Republicans are “actively
preparing” for talks combining coronavirus stimulus and government
funding and that Senate Majority Leader Mitch McConnell (R-KY) has
circulated a draft of a slimmed-down stimulus bill that would
provide $300 a week in unemployment benefits through December.

The bottom line: There’s still no
movement toward a deal that can pass both chambers of Congress.
“The stimulus delays come as economists are increasingly warning
that the U.S. risks a prolonged recession if Congress doesn’t
provide $1 trillion to $2 trillion in relief funds this fall,”
Bloomberg’s Erik Wasson and Justin Sink write.

Quote of the Day: Rock-Bottom Interest Rates for Years to
Come

“I wouldn’t be surprised if interest rates are still zero
five years from now.”

– Jason Furman, chief White House economist
in the Obama administration, in a
Bloomberg News article on expectations that the
Federal Reserve could hold interest rates near zero for the next
five years, if not longer. David Wilcox, a former Fed official now
with the Peterson Institute for International Economics, tells
Bloomberg that rock-bottom rates could last six or seven years if
damage from the coronavirus recession lingers.

More Than $1 Billion in Suspicious Coronavirus Relief Grants:
Report

In some parts of the country, the federal government has
provided coronavirus relief grants to more businesses than are
eligible to receive them, at a cost of at least $1.3 billion.

An
analysis by Bloomberg Businessweek found 52
congressional districts in which the number of recipients of
emergency grants made by the Small Business Administration exceeded
the number of eligible small businesses.

The grants, made through the now-depleted $20 billion Economic
Injury Disaster Loan program, were intended to help small
businesses keep their doors open during the coronavirus crisis.
Firms could receive $1,000 per employee, up to $10,000. But the
analysis found that in some cases far more small businesses
received the maximum grant of $10,000 than there were firms with 10
or more employees in the area.

“The epicenter was six adjacent congressional districts in the
Chicago area, where 81,000 grants were approved even though there
are only 19,000 eligible recipients,” Bloomberg Businessweek said.
“That’s more than $600 million going to phantom entrepreneurs.”

The problem could be much bigger: The SBA says it has
fraud safeguards in place — but also that it had been under
pressure to provide loans quickly as the coronavirus closed down
the economy in the spring and early summer.

SBA Inspector General Hannibal Ware warned in July that there
was “potentially rampant fraud” in the grant program, citing $47.8
million in suspect loans his office had uncovered. “The level of
fraud we’ve seen in this has been pretty pervasive,” Ware told
Bloomberg Businessweek.

In a
preliminary report, Ware said organized fraud
rings had targeted the program. In one example, the IG said:
“Various romance scams and social media solicitations persuade
people to provide personally identifiable information to ‘get free
money.’ The information is then used to apply for SBA economic
injury loans and portions of the proceeds go to the
ringleader.”

The true cost of the many scams may be considerably higher
than the $1.3 billion identified by Bloomberg Businessweek. That
analysis focused only on grants of $10,000, but not all of them
were reviewed. In addition, the majority of grants made by the
program were for between $1,000 and $9,000, which suggests that
there could be many more suspicious loans to uncover.

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