Pelosi Sets Deadline for Stimulus Deal

Pelosi Sets Deadline for Stimulus Deal

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Plus, court rejects Trump effort to cut food stamps
Monday, October 19, 2020
 

Stimulus Deal or No Deal? Pelosi Sets Tuesday Deadline

It may not have a made-for-TV theme song, but Nancy Pelosi’s ultimatum does pack some dramatic punch: 48 hours or we’re done.

House Speaker Pelosi (D-CA) said Sunday that a deal must be reached within 48 hours if a coronavirus relief package is to pass before the election. “We don't have agreement in the language yet, but I'm hopeful,” she told ABC’s George Stephanopoulos. “I'm optimistic because, again, we’ve been back and forth on all of this.”

Pelosi and Treasury Secretary Steven Mnuchin have been going round and round over the potentially massive bill for weeks, with Democrats lowering their bid to $2.2 trillion and the White House offering a package worth $1.8 trillion. But money isn’t the only thing keeping the sides apart. Crucial details about specific provisions of the legislation are still in dispute, including the federal response to the still uncontrolled pandemic. “The testing. The tracing. The treatment. The mask-wearing. The separation. The sanitation. And all that goes with it,” Pelosi said.

In a call with Democratic leaders Monday, Pelosi said there were still numerous sticking points between the two sides, including aid for state and local governments, unemployment payments, child care funding and various health care provisions. The liability protections for businesses that Republicans want look like a particularly difficult issue, with one lawmaker reportedly saying that “there isn't a single Democrat who could vote for a bill with those provisions.”

Pelosi and Mnuchin “continued to narrow their differences” in a call on Monday afternoon, a Pelosi spokesperson said. “The Speaker continues to hope that, by the end of the day Tuesday, we will have clarity on whether we will be able to pass a bill before the election. The two principals will speak again tomorrow and staff work will continue around the clock.”

Trump says he wants even more: Over the weekend, President Trump said he would match the Democrats on spending, or even raise their offer. “I'd go higher than her number, who knows what her number is, but if you said a trillion-eight, two trillion, if you said two trillion-two, so many numbers — I'm willing to go higher than that, because it wasn't the people's fault,” Trump told Charles Benson of Milwaukee station WTMJ.

Trump is willing to “go pretty far” to make a deal, White House spokesperson Alyssa Farah said Monday, adding that the Trump team isn’t concerned about Pelosi’s timeframe. “This 48-hour deadline is really an artificial deadline. The American people need help. We’re going to get it to them whether it’s 72 hours, 24 hours or longer,” Farah said.

McConnell says he’ll consider it: Senate Majority Leader Mitch McConnell (R-KY) has been cool to Trump’s call for a major deal, saying instead that Senate Republicans would support a much smaller package, which he plans to bring up for votes this week. But McConnell did leave the door open, if only a crack, to a bigger deal: “If Speaker Pelosi ever lets the House reach a bipartisan agreement with the administration, the Senate would of course consider it.”

White House Chief of Staff Mark Meadows reportedly said that McConnell would bring any such deal to the floor for a vote – a step further than merely “considering” it – but McConnell has not confirmed that stance publicly. "There are some in the Senate that would support it. Whether there's enough votes to get to the 60-vote threshold, that's up to Leader McConnell," Meadows said. “He has agreed that he's willing to go ahead and put forth the bill if we have a bipartisan agreement."

The odds are still very long: While the politicians keep talking up a potential deal, most observers have concluded that it will be very difficult to reach an agreement, at least before the election.

Politico’s Ben White said Monday that reaching a deal before the election “seems like a near impossibility.” While a deal is not entirely off the table, the signs all point to failure, despite the ongoing drama. “It all feels like theater of the absurd at this point,” White said Monday.

White also highlighted a comment from Isaac Boltansky of the investment bank Compass Point: “When it comes to the stimulus talks we are still where we have been for months: absolutely nowhere. Even the moments of slight progress . . . are little more than mirages in the swamp.”

Senate Control Matters More Than Presidential Race for 2021 Stimulus: Goldman Sachs

The election contest between President Trump and former vice president Joe Biden has been called the most consequential of our lifetime — and more voters say the race matters to them than in decades past. But when it comes to the size and scope of any coronavirus relief package that might pass in 2021 — because, let’s face it, it’s probably not happening this year — who controls the Senate will mean more than who’s president, Goldman Sachs says.

“Next year, fiscal policy depends on the election outcome, but in our view it depends more on the outcome of Senate elections than the presidential election result,” Goldman Sachs economist Alec Phillips wrote in a research note Monday. While House Speaker Nancy Pelosi and the White House are working on a roughly $2 trillion package, many Senate Republicans oppose spending that much and are instead set to vote on a roughly $500 billion plan.

“Regardless of who wins the White House, if the Senate remains under Republican control we would expect Congress to enact a stimulus proposal much closer to the current Senate Republican proposal than to either President Trump’s or Speaker Pelosi’s,” Phillips says.

Phillips adds that Democratic control of Congress and the White House would likely result in the greatest increase in spending: “This would likely include a stimulus package in Q1, followed by infrastructure and climate legislation. In this scenario, we would expect legislation expanding health and other benefits, financed by tax increases, to pass in Q3.”

The size of a potential Democratic Senate majority will also matter, Phillips argues, with a narrow edge (50 or 51 seats) likely resulting in less fiscal stimulus than a more sizable majority.

If Republicans hold onto the Senate, the Goldman Sachs economist expects Republicans to look to limit the size of any stimulus bill, with the final package likely coming in “well under $1 trillion.”

Number of the Day: $259 Billion

The Washington Post’s Rachel Siegel and Jeff Stein report that, even as lawmakers struggle to reach a deal on another coronavirus relief bill, $259 billion in funds approved in March to back Federal Reserve lending programs may never be used:

“In March, Congress allotted $454 billion to the Treasury Department to support the central bank’s emergency lending programs, including those for struggling businesses and local governments. Of that pot, only $195 billion has been specifically committed to cover any losses the Fed might take, including though loans that companies fail to repay. Seven months into the crisis, the remaining $259 billion still has not been committed to any of the Fed’s specific programs or for any other purpose, and it is unlikely that it will be anytime soon.

“The fate of this money — and its inability to address remaining cracks in the economy — show the surprising limits of the nearly $3 trillion in emergency aid Congress approved early in the pandemic. Federal Reserve and Treasury Department officials say there are ways the money could be repurposed to more directly reach businesses and workers but say they cannot do so without congressional approval.”

Read more at The Washington Post.

Court Rejects Trump Effort to Cut Food Stamps

A federal judge on Sunday rejected a Trump administration plan to cut $5.5 billion from the Supplemental Nutrition Assistance Program over the next five years. The proposed rule change would allow the Department of Agriculture to restrict states’ abilities to waive work requirements for food stamp beneficiaries in areas facing severe economic distress — a move that could remove 700,000 people from the nutrition assistance program.

In a 67-page ruling, Chief U.S. District Judge Beryl A. Howell said the administration had failed to explain how its rule “makes sense” or to justify the effect the changes would have on thousands of food stamp recipients — a failure made worse by the growing importance of the program amid the coronavirus pandemic.

Supreme Court Agrees to Hear Case Over Border Wall Funding

The Supreme Court announced Monday that it will hear a challenge to President Trump’s diversion of military funds to pay for construction of his wall along the border with Mexico. The court also agreed to hear a challenge to the Trump administration’s policy requiring asylum seekers to remain in Mexico while their cases are processed.

A federal appeals court ruled in June that the administration’s use of $2.5 billion in funds appropriated for the Defense Department was unlawful, but the Supreme Court in July allowed construction of border barriers to continue.

Lawyers for the American Civil Liberties Union in the border wall case say that by the time the high court hears the case, the Trump administration will have used all the money, The Washington Post’s Robert Barnes reports.

“Trump, who ran for office in 2016 promising that Mexico would pay for the border wall, has obtained more than $15 billion in federal funds for his signature project, including $5 billion provided by Congress through conventional appropriations,” Barnes writes. “As a practical matter, much of the $2.5 billion has been spent and the portions of the wall funded by it have been built. As of the summer, about 40 miles of two projects in New Mexico and Arizona had yet to be completed.”

The border wall funding case will likely be heard early next year.

Quote of the Day

“Headline rates matter less and less than ever before. It’s all in the nitty-gritty. It’s all in the treatment of losses. It’s all in the depreciation. That’s where the battle gets fought.”

Mihir Desai, a Harvard Business School professor, in a Wall Street Journal article looking at the likelihood that corporate tax rates will be going up next year if Democrats control both Congress and the White House.

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