Pelosi and Mnuchin Agree to Restart Stimulus Talks

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.”


Read more at Bloomberg Law.

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