Pelosi and Mnuchin Agree to Restart Stimulus Talks
Stalled coronavirus stimulus talks may be starting up again on Capitol Hill. Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi (D-CA) both said Thursday that they have agreed to revive their negotiations on another coronavirus relief bill.
“The president and I want more support,” Mnuchin told a hearing of the Senate Banking Committee. “I've probably spoken to Speaker Pelosi 15 or 20 times in the last few days on the CR, and we've agreed to continue to have discussions about the CARES Act.”
Pelosi told reporters that she hoped to soon be back at the negotiating table.
The two sides remain far apart, with Democrats pressing for a larger and broader package that would renew enhanced unemployment benefits, provide aid to state and local governments and deliver another round of direct payments to households, among other things.
The White House and Senate Republicans, meanwhile, have objected to the state aid and pushed for a narrower, more targeted approach. “Let's pass things that we agree on quickly, and we can always come back and do more,” Mnuchin said Thursday, according to The Hill. “It's less of the issue of what the absolute number is.”
Senate Republicans previously failed to come together behind a $1 trillion proposal, but they did support a smaller plan totaling some $650 billion. That package was blocked by Democrats who said was it insufficient.
Democrats prepare a new $2.4 trillion plan: The Democratic-led House passed a $3.4 trillion package in May, but party leaders have more recently sought a compromise deal worth around $2.2 trillion. Now, as she seeks to restart talks, Pelosi has reportedly instructed House committee chairs to prepare another version of their package as a basis for renewed negotiations — or as a way for Democrats to show they are acting to address the crisis even if talks with the White House don’t go anywhere.
Pelosi, who has insisted on a comprehensive deal, has faced increasing pressure from centrists in her caucus to take up additional coronavirus relief measures, even narrower ones, ahead of November’s elections.
The House could vote on the new plan next week, even without GOP support, Politico reports.
The new package is expected to cost $2.4 trillion. Politico’s Heather Caygle, John Bresnahan and Sarah Ferris provide more details:
“The legislation is expected to contain popular provisions from the massive $3.4 trillion HEROES Act the House passed in May, including state and local funding and expanded unemployment benefits but likely for a shorter time frame than originally proposed, according to Democrats involved.”
The package will reportedly also include additional funding for airlines, restaurants and other areas of need that have developed in recent months.
Economy at risk: The economy shows signs of needing more support (see more below) and leading economists warn that the U.S. is at risk of repeating a costly mistake made after the Great Recession by cutting off government aid too quickly, Ben Casselman and Jeanna Smialek write in The New York Times on Thursday. “The lesson from the last crisis is that we had elevated unemployment for years, and it was a slow grind to work that down,” Robert S. Kaplan, president of the Federal Reserve Bank of Dallas, told the Times. “We have a chance here, if we act quickly, to mitigate the lasting damage that we saw.”
The bottom line: The two sides show no signs they’ve moved any closer to clinching a deal. As Senate Appropriations Chairman Richard Shelby (R-AL) said: “There’s always a chance around here, as you know, but it is slim.”
Layoffs Keep Coming, 27 Weeks Into the Crisis
About 870,000 people filed for state unemployment benefits in the week ending September 19, the Labor Department said Thursday, a slight increase from the week before on a seasonally adjusted basis and well above economists’ expectations. An additional 630,000 people filed claims for Pandemic Unemployment Assistance, the federal program for self-employed and gig workers.
Taking all state and federal insurance programs together, about 26 million people were receiving some kind of unemployment benefits in the week ending September 5, a drop of more than 3 million from the week before, the weekly report said. (However, a substantial portion of that decrease came from California, as the state eliminated duplicate and fraudulent cases from its data.)
Nearly 62 million jobless claims have been filed since the pandemic began.
The jobs crisis isn’t over: As economists have been saying for some time now, the job loss numbers are better than they were at the beginning of the pandemic, but still far above levels seen in any economic crisis since the Great Depression. “It’s just an ongoing crisis in the labor market,” said economist Heidi Shierholz of the Economic Policy Institute.
This week’s numbers are “an indicator of the pain that’s still out there,” Ethan Harris of Bank of America told Bloomberg. “And it’s consistent with the idea that we’re getting past that phase where we’re kind of rebounding from that shutdown, and now we’re more to the grinding-forward phase with this massive headwind from the labor market.”
Joseph Brusuelas, chief economist at the consulting firm RSM, said the “stalling out suggests that the easy gains of the recovery’s early stages are likely in the rear-view mirror and the hard work of digging out of the economic abyss lies ahead.”
Winter could be worse: AnnElizabeth Konkel, an economist for the career site Indeed, told The New York Times that the apparent slowdown in the job market recovery in recent weeks is particularly worrisome given that cold weather will start arriving soon, which could force some businesses to curtail their operations or even close amid worries about spreading the virus indoors. “We’re losing steam, which is definitely not good heading into the winter,” she said.
Again, calls for more stimulus: “The recovery is losing momentum and further fiscal stimulus is needed to support jobs and incomes,” Bloomberg economist Eliza Winger said.
Many Obamacare Enrollees During Pandemic Couldn’t Pay Their Premiums
Many workers who lost their jobs and health coverage because of the pandemic signed up for Obamacare plans, with a dozen states that operate their own Affordable Care Act marketplaces offering special enrollment periods to help more people get insurance. But Bloomberg Law’s Sara Hansard reports that a significant number of those new enrollees never actually got coverage — because they couldn’t pay their initial premiums:
“Almost one-third of some 20,000 Maryland enrollees from March through August didn’t activate their plans. In Washington, one-fifth of a 27,000-enrollee sample are still without coverage due to lack of payment, a sign that Obamacare subsidies may not be enough to help uninsured people get coverage in a public health emergency.
“People are enticed to sign up, but many are having trouble paying the first premium to start the coverage, Trinity College economics professor Gerardo Ruiz Sanchez found in a recent paper
. Once people make the first payment, they are entitled to a 90-day grace period if they don’t make subsequent payments before being cut off.
“The findings indicate many people can’t afford ACA coverage even though subsidies are provided for those with incomes between 100% and 400% of the poverty level.”
Ruiz Sanchez’s paper reportedly found that people who lost coverage are less likely to pay their first premium than others signing up under the special enrollment option. “This provides some empirical evidence that there might be scope for considering a little bit of extra help for them,” Ruiz Sanchez told Bloomberg. “If we’re discussing stimulus checks, if we’re discussing eviction bans, why are we not discussing a little bit of help for people to keep their insurance.”
- Trump Says He Will ‘Always’ Protect Those With Pre-Existing Conditions. He Hasn’t. – Margot Sanger-Katz, New York Times Upshot
- Why Obamacare Might Survive the Supreme Court – Todd Ruger, Roll Call
- How Democrats Could Falter on Health Care – Paul Waldman, Washington Post
- The Ongoing Collapse of US Health Care – Deane Waldman, The Hill
- CBO Forecasts the National Debt Will Be Twice the Size of the Economy. Watch Out for Higher Taxes – Howard Gleckman, Tax Policy Center
- Biden’s Child Tax-Credit Plan Is a Big Clue That His Agenda Could Be More Progressive Than Thought – Thomas Franck, CNBC
- What's the Big Idea? 3 Proposed Solutions for Reducing Economic Inequality. – Scott Winship, Wells King and Josh Bevins, USA Today
- Harvard’s Chetty Finds Economic Carnage in Wealthiest ZIP Codes – Ben Steverman, Bloomberg Businessweek
- How to Fix Public Health Weaknesses Before the Next Pandemic Hits – Marc Lipsitch and Yonatan Grad, Washington Post
- Trump May Be Losing His Grip on Farm Country – Adam Minter, Bloomberg
- 'Back to School' Is Here: Congress Must Act to Assist Schools – Carissa Moffat Miller, The Hill
- Trump’s Threat to Democracy Threatens the Economy – Noah Smith, Bloomberg