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

By Yuval Rosenberg

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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