Pelosi Plays Hardball as Stimulus Talks Resume

By Yuval Rosenberg

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.

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