Forget About a Stimulus Deal (for Now)

Thursday, September 10, 2020

Senate Democrats Block GOP’s Scaled-Back Coronavirus Relief Bill

Senate Republicans on Thursday failed to advance their scaled-back coronavirus relief package, as Democrats blocked the roughly $650 billion plan, which they called woefully inadequate. House Democrats in May passed a $3 trillion package and Democratic leaders have pressed for a $2.2 trillion compromise deal.

Thursday’s Senate vote — 52-47, shy of the 60 votes needed — was almost entirely along party lines, underscoring just how dug in both sides remain after months of deadlock on additional legislation to address the pandemic and its economic toll.

The result was as expected, as the only question heading into the vote was whether Republicans would be able to round up enough votes in their own caucus to make a display of GOP unity that could potentially strengthen their hand in any future negotiations — and, as they prepare for peak campaign season, better enable them to blame Democrats for not delivering more aid to suffering Americans.

They did. Sen. Rand Paul of Kentucky was the only Republican to vote against the plan (citing an unwillingness to add to the national debt). No Democrats voted for it.
We’ll spare you the details of the partisan sniping that came before and after the vote.

What it all means: You can probably forget about another coronavirus relief package before the November elections. No new talks are currently scheduled and it may take some new pressure point for that to change. In the meantime, each side is looking to stick together and waiting for the other party to crack.

"If past is prologue, there's actually a significant chance that the public heat on many Republican senators as they go back home will have them come to their senses, and they'll start negotiating with us in a serious way," Senate Democratic Leader Chuck Schumer said ahead of the vote.

A number of Republican senators indicated Thursday that they weren’t optimistic about the chances of a deal before November. "Congress is not going to pass another COVID relief bill before the election," Sen. Marco Rubio (R-FL) said on Twitter.

Sen. Chuck Grassley put the onus on Democrats and House Speaker Nancy Pelosi to break the stalemate. "It looks like they don't want to get to an agreement," he said, according to The Hill. "So my guess is, as of now, unless Pelosi changes her mind and talks to the White House, there's not gonna be anything done."

Asked what happens next, McConnell reportedly offered a similar view: "Well, hopefully Democrats will come back to the table."

Labor Market Still Struggling

More than 857,000 workers filed initial jobless claims at the state level last week, the Labor Department announced Thursday, and another 839,000 filed first-time claims in the federal Pandemic Unemployment Assistance program.

State filings have been under 1 million for two weeks in a row, but the combined state and federal number is still well above that level and has been rising for four weeks straight. All told, about 30 million people were receiving unemployment benefits in the week ending August 22.

"The unexpectedly high levels of claims underscore the uneven nature of the labor market’s recovery," Bloomberg’s Reade Pickert said Thursday. "Many businesses are hiring or bringing back workers, yet millions remain unemployed and others are on the chopping block as more companies announce job cuts and small-business aid runs dry."

Some economists are raising alarms about the wobbly recovery. "It’s a gut punch to see these numbers every Thursday with no improvement," Diane Swonk, chief economist at the accounting firm Grant Thornton, told The New York Times. "The numbers are going in the wrong direction."

Bloomberg economist Eliza Winger said that the "labor market recovery appears to be flattening well shy of the pre-pandemic peak."

Improvements but plenty of pain, too. Job losses are on a long and bumpy downward trend but remain at alarmingly high levels. Good news arrived last week when the Labor Department announced that the unemployment rate had dropped to 8.4% in August. But as with much during the coronavirus crisis, there’s a substantial footnote: About 1.1 million furloughed workers are being counted as employed, and roughly 3.7 million people have left the workforce since March. Factoring in those details, some economists say a more realistic unemployment rate would be closer to 10%.

Trump’s unemployment aid running out. The $300 per week in unemployment assistance President Trump made available from disaster relief funds is starting to run out, and the Federal Emergency Management Agency announced Thursday that payments would be restricted to a maximum of six weeks. Officials in several states, including Montana, Texas, Tennessee and New Mexico, said they have been told that funding for their programs would end in the week ending September 5, five weeks after the program’s retroactive start date of August 1.

At least 20 states have received funds so far through the Lost Wages Assistance program that Trump authorized by executive action on August 8, though more have applied and are awaiting payment. About $30 billion has been paid out from the $44 billion fund, according to Politico.

Number of the Day: $175 Million

The Justice Department said Thursday that it has so far charged 57 people with trying to steal more than $175 million from the Paycheck Protection Program meant to aid small businesses weather the coronavirus pandemic. Officials said that they have identified 500 individuals who may have defrauded the $660 billion program and that coordinated criminal rings engaged in systematic efforts to "loot" the program. They also said that the government had been able to recover or freeze more than $30 million and expect to add to that total, but that actual losses to the federal government total more than $70 million.

Medicaid Work Requirements in Arkansas Didn’t Boost Employment: Study

A new study of work requirements for Medicaid recipients in Arkansas finds that they did nothing to increase employment but did impose substantial hardships on those who lost coverage as a result of the requirements.

The background: Arkansas was the first state to impose work requirements on some Medicaid beneficiaries, under which adults between the ages of 30 and 49 had to work at least 20 hours per week, be engaged in community activities or receive exemptions in order to continue to receive health care coverage. A federal judge halted the program in April 2019, 10 months after it started, but not before 18,000 adults had been removed from Medicaid for noncompliance.

The findings: The new study, published in Health Affairs, compared those in Arkansas who had been subject to the requirements to those who had not been, and the population in Arkansas to the population in other states. Researchers found no difference in employment rates between populations, contrary to the argument put forth by proponents of work requirements that they would inspire people to get jobs. And they found that at least half of those who lost their Medicaid coverage reported subsequent problems with medical debt, delays in receiving care and delays in taking medications.

The researchers also found that there was considerable confusion about the program rules and serious barriers to reporting participation status for Medicaid recipients in the state.
"In conclusion, our study showed that Arkansas’s work requirements led to coverage losses associated with important negative impacts on medical debt and affordability of care without improving employment," the researchers wrote. "Our results should provide a strong note of caution for federal and state policy makers considering work requirement policies in the future."

Joan Alker, a researcher at Georgetown University’s Center for Children and Families who has been a critic of work requirements, said Wednesday that the study shows that Medicaid work requirements are not really designed to help the poor. "Let’s be clear," Alker said, "this policy is about punishing low income people."

Medicare Chief Spent Millions in Taxpayer Funds to Boost ‘Personal Brand’

Seema Verma, who runs the Centers for Medicare & Medicaid Services in the Trump administration, spent more than $3.5 million in public funds on outside consultants who worked to "boost her public profile and promote her personal brand," according to a congressional investigative report released Thursday.

Investigators found that in her first two years in office Verma used CMS funds to retain consultants "with strong ties to Republican political circles" who arranged media appearances, handled communications and scheduled private meetings, including a "Girl’s Night" party at the house of USA Today Washington Bureau Chief Susan Page that cost taxpayers nearly $3,000.

The consultants charged up to $380 an hour for their public relations work, and some claimed travel expenses of more than $500 per day, far above the limits set for federal employees. Other eyebrow-raising spending cited by investigators includes $1,700 for arranging lunches for Verma with individuals associated with Fox News, the Washington Examiner and AARP; $977 to place an op-ed written by Verma on Fox News; and $13,000 to place Verma on panels and contend for awards like Washingtonian magazine's "Most Powerful Women in Washington."

A group of Democratic lawmakers released a statement Thursday calling on Verma to pay the money back. "Our investigation found that Administrator Verma misused funds appropriated by Congress and wasted taxpayer dollars intended to support critical federal health care programs," they said. "Congress did not intend for taxpayer dollars to be spent on handpicked communications consultants used to promote Administrator Verma’s public profile and personal brand. Administrator Verma has shown reckless disregard for the public’s trust. We believe she should personally reimburse the taxpayers for these inappropriate expenditures."

This is not the first time critics have raised questions about Verma’s use of taxpayer funds. Last year, Politico reported that Verma had filed a request to be reimbursed at public expense for the loss of items stolen from her luggage during a work-related trip. The value of the stolen items totaled $47,000 and included Ivanka Trump-branded jewelry worth nearly $6,000.

Get more details on the Verma investigation at Politico.

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Forget About a Stimulus Deal (for Now)