Trump Promises Best Stimulus Package Ever — After the Election

By Yuval Rosenberg

Trump Predicts ‘Best Stimulus Package You’ve Ever Seen’ — After
the Election

President Trump predicted Tuesday that he’ll sign off on a
coronavirus relief package after the election — and not just any
relief package. “After the election, we’ll get the best stimulus
package you’ve ever seen,” Trump
told reporters.

Trump blamed House Speaker Nancy Pelosi (D-CA) for the lack of a
deal thus far, again pointing to Democratic efforts to provide more
aid money to states and cities facing a pandemic-related budget
crunch. “Nancy Pelosi is only interested in bailing out badly run,
crime-ridden Democrat cities and states. That’s all she’s
interested in. She’s not interested in helping the people,” Trump
said, adding that Republicans would win control the House as a
result.

“We’ll take back the House. We’ll hold the Senate. We’ll hold
the White House,” Trump maintained.

The reality: Trump’s pre-election bluster is at odds with
current election forecasts, which point to the GOP losing seats in
both the House and Senate and have him facing a difficult path to
reelection. At the same time, prospects of a stimulus deal have
clearly evaporated, for now. Both the House and Senate have left
Washington, D.C. until after the election and negotiations between
Pelosi and Treasury Secretary Steven Mnuchin “have largely been
shelved after repeated failed attempts to broker a compromise,” The
Washington Post
reports:

“Their talks showed scant evidence of progress, but neither
Pelosi nor Mnuchin seems to want to be the one to say it’s over.
Pelosi continues to insist she wants a deal before the election
that would include another round of $1,200 stimulus checks, among
other things. But at the same time, her rhetoric has shifted in
recent days to emphasize the possibility of a bigger and better
relief bill passing in future, with retroactive benefits — a
scenario that would seem possible only under a Biden
administration.”

Senate Majority Leader Mitch McConnell (R-KY) on Tuesday morning
suggested to Politico that negotiators may never have been all that
close to agreement: “That was a very complicated negotiation,” he
said. “Depending on who you talk to, I’m not sure they got very
close.”

The bottom line: With Election Day a
week away, talk of a coronavirus relief deal is now either in the
past or future tense. Nothing is happening right now. “We’ll come
back in November,” said Senate Appropriations Committee Chairman
Richard Shelby (R-AL). “The question might be, will there be
something then?”

Quotes of the Day

“As the covid pandemic surges again, the American people
desperately need additional relief to deal with the economic
fallout, but Speaker Pelosi’s intransigence and the Trump
administration’s ineptitude have combined to deny it to them, at
least until after the election.”

– Michael Steel, a GOP strategist who was a top aide to former
House Speaker John Boehner (R-OH), in
The Washington Post.

"Do I wish that it was a higher priority for the
president to rein in spending and the debt? Yes. He didn't run,
principally on reining in spending and deficit and debt. That's not
what he promised to do. We had real differences between it — and
you know what, the voters made a decision."

– Sen. Ted Cruz (R-TX), in an
Axios interview.

Axios’s Orion Rummler notes that former White House Chief
of Staff Mick Mulvaney
said earlier this year that the GOP "is very
interested in deficits when there is a Democrat in the White House
... Then Donald Trump became president, and we're a lot less
interested as a party." Cruz, who voted for the 2017 GOP tax cuts,
acknowledged to Axios that Republicans would likely "rediscover"
their debt fears, but insisted that the issue has always been a
priority for him. “He argued that while the 2017 Republican tax cut
contributed significantly to the debt, pro-growth policies are also
key to reducing deficits," Rummler notes.

Poll of the Day: Federal Response to Coronavirus

Most people think public institutions have improved their
responses to the Covid-19 crisis — except for the federal
government. “Americans believe the federal government's handling of
the pandemic has gotten significantly worse over time,” Margaret
Talev of Axios
wrote Tuesday, referring to the latest Axios/Ipsos
Coronavirus Index. “The findings suggest people see President Trump
and his political team as one of the biggest impediments to turning
things around.”

Wall Street Is Counting on More Government Spending

Traders on Wall Street are placing their bets on a “blue wave”
come Election Day.

While Joe Biden’s plan for higher taxes on business and the
wealthy doesn’t sit well with many on Wall Street, Politico’s Ben
White
says the prospect of a substantial and
well-targeted stimulus package outweighs those concerns. Investors
are betting that Democrats can win control of the White House and
both chambers of Congress, resulting in a new round of government
spending worth as much as $3 trillion – enough to carry the economy
until conditions can return to something like pre-pandemic
levels.

“Far from panicking at the prospect of a Biden win,” White says,
“Wall Street CEOs, traders and investment managers now mostly say
they would be fine with a change in the White House that reduces
the Trump noise, lowers the threat of further trade wars and
ensures a continuation of the government spending they’ve seen in
recent years.”

Alternative scenarios: Some Wall Streeters aren’t
convinced that a Democratic sweep would be best and would prefer
instead to see divided control in Washington to act as a brake on
spending. “The thing I’m concerned about with the blue wave is that
we go too far on fiscal support and we don’t act responsibly,” one
executive told White. “A Biden win and the GOP holding the Senate
would temper a lot of that. And everybody actually agrees that we
need more stimulus.”

Divided government could have its downsides, though. Richard
Bernstein, former chief investment strategist at Merrill Lynch,
told White that Republicans maintaining control of the Senate “is
the worst scenario because Washington will become like sclerotic
Europe and get nothing done. Uncertainty will remain an investment
theme. And deregulation likely reverses.”

A Trump win, on the other hand, could cause a powerful
reaction on Wall Street, with traders celebrating the continuation
of lower taxes and weakened regulations with a big jump in the
markets. However, the run-up may not last, White says, as the
prospect of heightened trade wars and a lingering pandemic chip
away at investor confidence.

No Pre-Election Details on Trump’s Promised Tax Cuts

Add President Trump’s second term tax plan to the long list of
items that he will release at some point in the future. White House
economic adviser Larry Kudlow said Monday that while administration
officials have been discussing new tax cuts, there are no plans to
release a proposal before the election.

“Look, we’ve put out a lot,” Kudlow told Fox News. “We’ve
mentioned it. I’ve talked about it. I don’t see any reason why we
have to put out a detailed plan.”

The Trump campaign has listed some proposals for tax and
economic policy in Trump’s second term, including “Cut Taxes to
Boost Take-Home Pay” and “Create 10 Million New Jobs in 10 Months.”
But as Bloomberg
noted, the campaign hasn’t provided any details on
how it would accomplish those goals.

The Democratic Senators Set to Take Over Key Committees

With a week to go in the election, Democrats are favored to win
control of the Senate, according to the
FiveThirtyEight forecast — but it’s
close.

Given that outlook, Politico’s Andrew Desiderio and John
Bresnahan
look ahead to which senators would take over as
committee chairs if Democrats do reclaim a majority in the chamber
for the first time since 2014.

The new chairs “will include a senator tried on federal
corruption charges, two octogenarians, a democratic socialist and a
former tech industry executive, among others,” they write.
“Potential committee chairs include 79-year-old Bernie Sanders
(I-Vt.) at Budget; 80-year-old Patrick Leahy (D-Vt.) at
Appropriations; 87-year-old Dianne Feinstein (D-Calif.) at
Judiciary; Sherrod Brown (D-Ohio) at Banking, Housing and Urban
Affairs; Mark Warner (D-Va.) at Intelligence; and Robert Menendez
(D-N.J.) at Foreign Relations.”

Here’s a bit more on four chairs who will play critical roles on
the fiscal policy front.

Sen. Ron Wyden of Oregon would lead the Finance
Committee, giving him a key role in Democratic efforts to rolls
back parts of the 2017 GOP tax cuts. Wyden told Politico that he’s
also focused on another coronavirus relief package. “We’re going to
make sure that the lesson of the Great Recession is learned — you
don’t take your foot off the gas in the middle of an economic
recovery,” he said.

Sen. Bernie Sanders of Vermont is poised to take over the
Budget Committee chairmanship. “Sanders’ committee would be
involved in crafting reconciliation bills, allowing a potential
Biden administration to push tax and spending bills through the
Senate on a simple-majority vote,” Politico notes. Sanders told the
site that he would look to “create a budget that works for working
families, and not the billionaire class.” Sanders has reportedly
also
expressed interest in joining a Democratic
administration as Labor secretary, but such an appointment would
allow Vermont’s Republican governor to appoint a temporary
successor to the Senate.

Sen. Patrick Leahy of Vermont would take the reins of the
powerful Appropriations Committee, responsible for writing the
spending bills that allocate federal dollars across government
departments and agencies. “With Leahy atop Appropriations and
Sanders chairing Budget, a small state like Vermont would have an
outsize impact on federal spending, and it would almost certainly
guarantee additional funds for the state,” Politico notes.

Sen. Patty Murray of Washington would lead
the Health, Education, Labor and Pensions Committee, giving
her a crucial role in Democratic efforts to protect, expand and
improve on Obamacare — potentially including Joe Biden’s proposed
creation of a public option.


Read more at Politico.

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