Pelosi Plays Hardball as Stimulus Talks Resume
You could get whiplash following the talks on a coronavirus relief package.
Just two days after President Trump said he instructed his representatives to halt negotiations, the talks are apparently on again.
In a morning interview with the Fox Business Network, Trump said the two sides were still discussing a deal. “I shut down talks two days ago because they weren’t working out. Now they are starting to work out. We’re starting to have some very productive talks,” he said, adding that House Speaker Nancy Pelosi wants another stimulus bill, too, “because it’s so good for our country. We really need it.”
What Trump said: “We’re talking about airlines and we’re talking about a bigger deal than airlines. We’re talking about a deal with $1,200 per person, we’re talking about other things. But it’s not anybody’s fault, they were trying to get things, and we were trying to get things and it wasn’t going anywhere. I shut it down. I don’t want to play games. And then we reopened, and I see the markets are doing well, but I think we have a really good chance of doing something."
Pelosi plays hardball: The speaker confirmed that talks were ongoing. “We’re at the table. We want to continue the conversation. We’ve made some progress. We’re exchanging language. So we’ll see how we connect,” she said.
But she also slammed Trump for walking away from talks earlier, and she shot down the idea of a standalone bill to aid airlines and industry workers facing furloughs.
Pelosi last week asked airlines to delay furloughing thousands of workers, suggesting that Congress would either enact a standalone aid bill for the industry or deliver payroll support as part of a comprehensive deal. After Republicans on Friday blocked a standalone bill from House Committee on Transportation and Infrastructure Chairman Peter DeFazio (D-OR), Pelosi signaled this week she was still open to providing aid to airlines. But after some Democrats reportedly questioned why only airlines should get help, Pelosi staked out a more hardline position at her Thursday news conference.
“There is no standalone bill without a bigger bill,” she said, suggesting that airline relief could be part of a larger package or in addition to it.
McConnell skeptical: Senate Majority Leader Mitch McConnell (R-KY), who earlier in the week backed Trump’s decision to walk away from talks, said Thursday that another relief package is needed — but that the upcoming elections make reaching a deal more difficult.
“There’s no question that the proximity to the election has made this much more challenging,” McConnell told a press conference in Erlanger, Kentucky. “We do agree that another rescue package is needed. We have vast differences about how much we should spend.”
He added that Pelosi “insists on an outrageous amount of money.” The speaker has pressed for a package topping $2 trillion, while the Trump administration has more recently offered $1.6 trillion.
Can a deal get done? Talks may be back on, but the two sides remain split over a number of issues. Pelosi, for example, highlighted Democrats’ insistence on language preventing Trump from diverting funds provided for a national coronavirus testing-and-tracing strategy. With the election just 26 days away, there isn’t much time to resolve some significant differences.
Given the challenges, the Trump administration and congressional Republicans have discussed putting forth a new package of their own, which could include $1,200 stimulus checks, aid for small businesses and payroll support for airlines, according to The Washington Post.
The bottom line: For now, McConnell may have summed it up best when he said Thursday: “The discussion from day to day can be confusing for all of us to follow.”
Quote of the Day
“I haven’t actually been to the White House since August the 6th. Because my impression was that their approach to how to handle this is different from mine and what I suggested that we do in the Senate, which is to wear a mask and practice social distancing.”
– Mitch McConnell, speaking to reporters Thursday.
Trump’s $8 Billion Plan to Send Drug Discount Cards to Seniors
President Trump announced two weeks ago a surprise plan to send $200 drug-discount cards to 39 million Medicare beneficiaries, and Politico reports Thursday that officials are scrambling to execute that effort before Election Day.
The administration is hurrying to iron out the plan — which reportedly is being driven by Centers for Medicare and Medicaid Services Administrator Seema Verma and White House Chief of Staff Mark Meadows — and a final version is expected as soon as Friday, with announcement letters going out to seniors next week. The cards themselves, which could be branded with Trump’s name, will start going out later in the month, though not all would be delivered before the November election.
What the plan does: The White House wants to use $8 billion from the Medicare trust fund to cover the cost of discount cards that 39 million Medicare beneficiaries can use to save $200 on prescription drugs.
The administration says that the plan will be considered a test of the effectiveness of the discount card system as it relates to drug use. Such tests are allowed under federal law, although not all experts agree that the plan satisfies the necessary requirements to qualify as a test.
A political effort? The political context is hard to ignore. “The plan to lower seniors' drug costs comes as administration officials grapple with Trump's falling support among older Americans, a significant threat to his re-election,” Politico’s Dan Diamond said. “Trump is currently lagging challenger Joe Biden by as much as 27 points in recent polls among Americans ages 65 and older, a major reversal from the 2016 campaign, with seniors now voicing concerns about Trump's handling of the coronavirus pandemic and his chaotic leadership style.”
Trump administration officials have denied that there is anything political about the plan. It’s just “good policy,” said White House spokesman Judd Deere.
Rep. Frank Pallone (D-NJ), chair of the House Energy and Commerce committee, described the plan as “a shameless stunt that steals billions from Medicare in order to fund a legally dubious scheme that’s clearly intended to benefit President Trump’s campaign right before Election Day.”
Health care experts have raised questions, as well. “There are a lot of things that seem problematic," Stacie Dusetzina of Vanderbilt University told Politico. “It's an incredibly large amount of money to be spending [and] it's not really solving any systemic problem.”
Layoffs Keep Coming With Jobless Claims at ‘Staggeringly High’ Levels
About 840,000 people filed for state unemployment benefits last week, the Labor Department announced Thursday, a small decline from the week before but 20,000 more than analysts had expected.
Another 464,000 Americans applied for benefits through the Pandemic Unemployment Assistance program, the federal program that covers gig workers and the self-employed, bringing total unemployment aid applications to 1.3 million.
“The level of claims is still staggeringly high,” said economist Daniel Zhao of Glassdoor. “We’re seeing evidence that the recovery is slowing down, whether it’s in slowing payroll gains or in the sluggish improvement in jobless claims.”
Settling in at a high level: One reason layoffs have remained so high week after week is that some companies try to hang onto workers as long as they can in order to be ready when the economy picks up again. But as the recession drags on, employers give up and start shedding employees.
“Some of these new layoffs are coming from firms that didn’t want or didn’t have to lay people off at first,” Constance Hunter, chief economist at KPMG, told the Associated Press. But as the recession hits the six-month mark with no end in sight, “they have no choice but to start reducing their workforce.”
Significant churn: The ongoing layoffs, at levels higher than seen during the worst of the Great Recession, are contributing to enormous churn in the labor market, which is also recording substantial gains, as evidenced by the monthly job reports.
“Companies are continuing to rehire workers as they reopen, even as other companies cut jobs in response to still-depressed demand for goods and services,” said Ben Casselman of The New York Times. “The result is a job market that is being pulled in two directions at once — and economic data that can appear to tell contradictory stories.”
Millions still receiving benefits: The number of people receiving state benefits fell by roughly 1 million, down to about 11 million, and the number receiving benefits through the federal PUA program fell by about 400,000, down to 11.4 million. Once all of the insurance programs are accounted for, about 25.5 million people are receiving unemployment aid.
Add in the people who are still waiting to receive their benefits or hear about the status of their applications and the number rises to over 26 million, says Heidi Shierholz of the Economic Policy Institute (see the chart below). Shierholz cautions, though, that the data is far from perfect, and is almost certainly distorted by backlogs, double-counting and fraud. “All this means nobody knows exactly how many people are receiving unemployment insurance benefits right now,” she said, “which is another reminder that we need to invest heavily in our data infrastructure and technology.”
Deficit Tops $3 Trillion in 2020: CBO
The federal budget deficit rose to a record-breaking $3.1 trillion in fiscal year 2020, according to estimates released by the Congressional Budget Office Thursday.
Even before the coronavirus crisis, the annual deficit was expected to top $1 trillion in 2020, but reduced revenues and increased spending associated with the pandemic produced a final number about three times that estimate. Revenues were down 1%, while spending — on everything from aid to businesses to enhanced unemployment benefits for laid off workers — was up 47%.
"Relative to the size of the economy, the deficit—at an estimated 15.2 percent of gross domestic product (GDP)—was the largest since 1945,” the CBO said.
The Treasury Department will release official figures later in the month.
- How Much Would Trump’s Coronavirus Treatment Cost Most Americans? – Sarah Kliff, New York Times
- The Republican Position on Preexisting Conditions Is Unbelievably Unpopular – Matthew Yglesias, Vox
- No Stimulus Means Economy's Fate Hangs on Next Few Months – Conor Sen, Bloomberg
- Republicans Endanger the Economy by Forgetting Their Successes – Michael R. Strain, Bloomberg
- Trump’s Stimulus Obstruction Excites Fiscal Conservatives — and No One Else – Jane Coaston, Vox
- Trump's Brilliant Stimulus Ploy Rattles Democrats – Liz Peek, The Hill
- Maybe Low Interest Rates Won’t Last Forever – Peter R. Orszag, Bloomberg
- With the Collapse of Substantive COVID-Related Stimulus, Mitch McConnell Is Already Trying to Make Joe Biden’s Life Miserable – Rex Nutting, MarketWatch
- Trump Is Promising Free Antibody Treatments for Everyone. It Won’t Be That Simple. – Zachary Brennan, Politico
- Why Covid-19’s Impact on Health Is a Long-Term Worry – Jason Gale, Bloomberg
- The Truth About Trump's Covid-19 Cocktail ‘Cure’ – Max Nisen, Bloomberg