With Trump on Sidelines, It's Now Pelosi vs. McConnell on Stimulus

With Trump on Sidelines, It's Now Pelosi vs. McConnell on Stimulus

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Plus, time for another shutdown?
Thursday, November 12, 2020

With Trump on Sidelines, It's Now Pelosi vs. McConnell on Coronavirus Stimulus

The players in the coronavirus stimulus negotiations may be changing, but the stalemate remains the same.

The Trump administration is reportedly stepping back from the talks, leaving it to Senate Majority Leader Mitch McConnell (R-KY) to try to hammer out a compromise with House Speaker Nancy Pelosi (D-CA). Treasury Secretary Steven Mnuchin had been leading negotiations with Pelosi on a package approaching $2 trillion, but those talks collapsed before the election.

“There hasn’t been any discussion yet between McConnell and Pelosi, but McConnell is not going to rely on Mnuchin anymore to do the dealing,” Senator Charles E. Grassley of Iowa, the chairman of the Senate Finance Committee, told reporters on Thursday morning. “I think he’s intending to take it over and try to get something going.”

The gap between the parties remains as cavernous as ever.

Pelosi and Senate Minority Leader Chuck Schumer (D-NY) spoke about the negotiations with President-elect Joe Biden Thursday. “They discussed the urgent need for the Congress to come together in the lame duck session on a bipartisan basis to pass a bill that provides resources to fight the COVID-19 pandemic, relief for working families and small businesses, support for state and local governments trying to keep frontline workers on the payroll, expanded unemployment insurance, and affordable health care for millions of families,” according to a joint statement.

While the statement didn’t address the costs of a relief bill, Pelosi and Schumer told reporters Thursday that, given the surge in Covid-19 cases across the country, they will continue to insist on package totaling more than $2 trillion, far larger than what Republicans have suggested. The Democratic leaders insisted that voters had given them and Biden a mandate to pursue a more comprehensive deal.

“This election was maybe more a referendum on who can handle Covid well than anything else,” Schumer said. “The Donald Trump approach was repudiated and the Joe Biden approach was embraced. That is why we think there is a better chance of getting a deal in the lame duck.”

McConnell quickly burst that bubble, again rejecting the idea of a multitrillion-dollar package. "My view is the level at which the economy is improving further underscores that we need to do something about the amount that we put on the floor in September and October — highly targeted at what the residual problems are," he said, referring to a roughly $500 billion package Senate Republicans had proposed. “I gather [Pelosi and Schumer] are looking at something dramatically larger. That’s not a place I think we’re willing to go. But I do think there needs to be another package. Hopefully we can get past the impasse we've had now for four or five months and get serious about doing something that's appropriate.”

Schumer, meanwhile, called McConnell’s proposal for a narrower bill a “non-starter” and Pelosi said Republicans were being cold-hearted about the crisis. “It’s like the house is burning down and they just refuse to throw water on it,” she said.

What’s next:
While talks haven’t started again, Pelosi reportedly has spoken to Senate Appropriations Chair Richard Shelby (R-AL) about a stimulus deal and government funding bill needed by December 11. McConnell said this week that he plans to discuss the funding bill with Pelosi.

The speaker faces some pressure to get something done from centrists in her party, and some Democrats reportedly worry that waiting to pass another relief bill could hamstring the incoming Biden administration. But with Republicans hopeful that they will maintain control of the Senate and some Democrats hopeful that they can get a better deal once Biden takes office, neither side appears to have much incentive to reach an agreement during the upcoming lame-duck session of Congress.

The bottom line:
“Prospects for a new stimulus bill this year just about hit rock bottom on Thursday,” Politico’s Burgess Everett and Sarah Ferris write. For what it’s worth, analysts at Goldman Sachs continue to expect that Congress will approve another stimulus package of roughly $1 trillion, but say that’s more likely to happen early next year. They say it’s also increasingly likely that Congress will add some targeted stimulus measures to the spending bill it will need to pass next month to avoid a government shutdown, pushing additional action on coronavirus relief into 2021 — and making the size of that action dependent on the course of the pandemic and vaccine development.

Trump White House Plans Its Final Policy Moves

While the White House has walked away from stimulus talks and President Trump is focused on his grievances over his election loss, administration officials are mapping out a number of policy moves they could make in their final days in office, touching on a variety of issues including education, immigration, health care and trade.

According to Politico’s Nancy Cook and Gabby Orr, White House Chief of Staff Mark Meadows asked aides earlier this week to provide a list of conservative policy goals the administration could push through in the next 10 weeks via executive action or agency rule changes.
From a reported list of about 15 possible initiatives, changes under consideration include tightening rules related to H-1B visas, which allow American companies to hire foreign workers, and providing coronavirus relief payments to parents in districts where schools have been closed due to the pandemic, while allowing those funds to be used for charter and private schools.

Impact is uncertain:
Trump has issued executive orders and actions in the past that have had no clear effect in the real world, standing as symbolic statements rather than truly operational directives, and this expected new round of communiqués may share a similar fate. One Trump adviser says the moves could be intended to influence the next president. “It will put pressure on Biden because a lot of the ideas are popular things,” outsider economic adviser Stephen Moore said. “It would be a little politically tough for Biden to go into the White House and cancel them.”

Nevertheless, Biden reportedly has plans to undo several of Trump’s controversial executive orders on the day he takes office, including ones related to travel bans, protections for immigrants, environmental rules and public health regulations.

Another important agenda item:
“In addition to rolling out executive orders and actions, Trump’s plans for the next several weeks include firing Cabinet officials who have irked him or refused to follow his lead on investigations,” Cook and Orr say. Defense Secretary Mark Esper, who was pushed out on Monday, may be the first of many firings in the weeks ahead. Other vulnerable officials include FBI Director Christopher Wray and CIA Director Gina Haspel.

Trump has been advised, however, that moving too aggressively on firings could be a problem, especially when it comes to Wray, since FBI directors typically serve 10-year terms. “Lawyers have warned the president that he could be more vulnerable to congressional investigation once he is no longer in office,” The Wall Street Journal’s Rebecca Ballhaus and Andrew Restuccia wrote Thursday.

Jobless Claims Fall, but Still Top 1 Million

About 709,000 people filed initial state unemployment claims last week, the Labor Department announced Thursday, a decrease of 48,000 from the week before. Another 298,000 people filed for Pandemic Unemployment Assistance, the federal program that covers gig workers and the self-employed, bringing the total of new filers to roughly 1 million, a decline of more than 100,000 on a weekly basis.

About 21.1 million people are receiving some kind of unemployment assistance (for the week ending October 24), a drop of 374,000 form the week before.

Numbers improving but still high:
The initial claims numbers, which are used as a proxy for layoffs, hit a seven-month low. But layoffs are still occurring at historically high levels. “Last week was the 34th straight week total initial claims were far greater than the worst week of the Great Recession,” said Heidi Shierholz of the Economic Policy Institute.

US Kicks Off New Fiscal Year With $284 Billion Deficit

The federal budget deficit was about twice as large in October as it was in the same month a year ago, the U.S. Treasury Department announced Thursday.

The deficit totaled $284.1 billion in the first month of fiscal year 2021, compared to $134.5 billion in October the year before. Revenue was 3.2% lower on a year-over-year basis, and spending was 37.3% higher.

“The figures extend a rapid deterioration in the government’s fiscal position this year after lawmakers scrambled to shore up an economy that ground to a halt and depressed tax revenue because of the health crisis,” Bloomberg’s Vince Golle writes. “In fiscal 2020, which ended last month, the U.S. amassed a record $3.1 trillion budget shortfall.”

Quote of the Day: Time for Another Shutdown?

“We could pay for a package right now to cover all of the lost wages for individual workers, for losses to small companies, to medium-sized companies or city, state, county governments. We could do all of that. If we did that, then we could lock down for four to six weeks and if we did that, we could drive the numbers down.”

– Dr. Michael Osterholm, director of the Center of Infectious Disease Research and Policy at the University of Minnesota and a member of President-elect Biden’s new Covid-19 advisory board, in an interview with Yahoo Finance.

Dr. Celine Gounder, another member of Biden’s advisory board, told CNN Thursday that Osterholm’s comments don’t necessarily represent the advisory board’s position or what the Biden transition team is planning. She said that places could dial up or dial down restrictions on activities like indoor dining or going to gyms depending on local conditions.

And Dr. Anthony Fauci, the country’s top infectious disease expert, urged people to “double down” on basic steps like wearing masks, washing hands and maintaining social distance. “The best opposite strategy to locking down is to intensify the public health measures short of locking down,” he told ABC’s “Good Morning America.”

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