Stimulus Deal Gains Steam as McConnell, Pelosi Talk

By Yuval Rosenberg

Stimulus Deal Gains Steam as McConnell, Pelosi Talk

The prospects of a coronavirus relief bill of some sort passing
before the end of the year picked up momentum on Thursday, as House
Speaker Nancy Pelosi (D-CA) and Senate Majority Leader Mitch
McConnell (R-KY) spoke by phone about a deal and more Senate
Republicans voiced support for a bipartisan package unveiled
earlier this week.

Pelosi and McConnell spoke by phone “about their shared
commitment to completing an omnibus [spending bill] and COVID
relief as soon as possible,” according to a spokesman for Pelosi.
The lawmakers are racing to come together on both coronavirus
relief and a larger spending package ahead of a December 11
deadline, when current government funding is set to expire.

Their conversation came a day after Pelosi and Senate Minority
Leader Chuck Schumer (D-NY) said that a $908 billion framework
introduced by lawmakers this week should serve as the basis for
negotiations, signaling a willingness to back off of earlier
demands for a package in the $2 trillion range — and from a private
$1.3 trillion offer the Democrats made to start the week.

Pelosi and McConnell — “frequent rivals but proven dealmakers,”
the Associated Press
notes — each had made optimistic comments earlier
on Thursday. Pelosi
told reporters “we will have an agreement” on a
coronavirus package by December 11. McConnell said on the Senate
floor that “it’s been heartening to see a few hopeful signs in the
past few days.” He made clear that sharp differences remain, but
again suggested that Congress pass legislation addressing the
narrow areas where the parties can agree. “Compromise is within
reach. We know where we agree. We can do this,” he
said.

The reality: Pressure for a deal is building, with
Republican Sens. Kevin Cramer of North Dakota, Lindsey Graham of
South Carolina, John Cornyn of Texas and Joni Ernst and Chuck
Grassley of Iowa all signaling their openness to the $908 billion
compromise. Sen. Dick Durbin (D-IL), the No. 2 Senate Democrat,
called for a vote on that package.

But for all the optimistic talk and undeniable momentum, it’s
still not clear that the two sides can bridge their differences.
McConnell, with additional leverage following November’s elections
and Democrats’ softening demands, appears to be taking a hard line.
He rejected the $908 billion bipartisan proposal when it came out
and he continues to call for a deal along the lines of his roughly
$550 billion package. (See
here for a side-by-side comparison of the two
plans.)

Schumer said Thursday that McConnell “does not seem inclined to
compromise” on a relief deal. "Once again the Republican Leader
argued that the Senate should pass only what Republicans approve of
and leave the rest for later,” Schumer
said.

“As far as I can tell, McConnell and other Republicans believe
their bill *is* the compromise,” Politico’s Burgess Everett

tweeted Thursday morning. Everett noted that the biggest
obstacles to a Covid-relief deal have not changed: “Many
Republicans oppose sending money to blue states and cities,” he
wrote, and “Democrats don't like the coronavirus liability shield
for businesses.”

The Washington Post
reports that conservative senators have already
objected to the bipartisan plan’s proposal for $160 billion in
state and local aid, which is already much less than Democrats had
been seeking.

McConnell will face some pressure from rank-and-file members,
but probably not from the White House. Trump told reporters
Thursday that he wants a stimulus deal. “I think they are getting
very close and I want it to happen,” Trump said. But a White House
spokesman clarified to the Washington Post that the president
talking about McConnell’s plan, not the bipartisan proposal.

The bottom line: A narrow Covid-relief
deal appears more likely than it has in months. Lawmakers may still
stumble as they try to also finalize a $1.4 trillion omnibus
spending package, in which case the Covid legislation could be tied
to a stopgap spending deal — meaning that we could be talking about
both another coronavirus stimulus and a spending package again
before long.

Chart of the Day: How Stimulus Could Help
Save Jobs

Amid signs of progress in the effort to provide more
stimulus, The New York Times’ David Leonhardt
highlights this analysis from Moody’s Analytics of
the impact of different levels of stimulus on the unemployment
rate. Under current policy — no additional stimulus — the
unemployment rate is projected to increase in the coming months,
rising to close to 10% by the second quarter of 2021. A $630
billion stimulus package would limit that increase significantly,
while a $1.5 trillion package is projected to all but eliminate
it.

Jobless Claims Drop to Lowest Level of Pandemic

Layoffs eased during the Thanksgiving holiday week, with about
712,000 people filing new jobless claims, the Labor Department

said Thursday, a drop of more than 60,000 from the
week before. Another 288,000 filed for aid through the federal
Pandemic Unemployment Assistance program, which provides benefits
for self-employed and gig workers, bringing the weekly total of new
claims to roughly 1 million.

Although the state claims numbers reached the lowest level since
March, they are still higher than any week before the pandemic
began – and have been so for 37 straight weeks. All told, about
20.2 million people are receiving some kind of unemployment aid,
according to the report, a decline of nearly 350,000 from the week
before.

Despite the better-than-expected results for last week, many
economists worry that the numbers will deteriorate in December, as
a new wave of Covid-related shutdowns starts registering in the
data. “The plunge in initial claims does not refute the idea that
the trend is rising; we expected a sharp fall because of the
difficulty of adjusting for Thanksgiving,” Ian Shepherdson, chief
economist at Pantheon Macroeconomics, wrote in a note. “Expect a
rebound next week.″

Trump Doubles Down on Defense Bill Veto Threat

Despite pushback from both sides of the aisle, President Trump
on Thursday reiterated his threat to veto the annual National
Defense Authorization Act if lawmakers fail to include in the bill
a repeal of legal protections for tech companies.

Acknowledging that some members of his own party oppose his
effort to use the defense policy bill to repeal Section 230 of the
Communications Decency Act of 1996, Trump
tweeted, “Looks like certain Republican Senators are
getting cold feet with respect to the termination of Big Tech’s
Section 230, a National Security and Election Integrity MUST. For
years, all talk, no action. Termination must be put in Defense
Bill!!!”

Although a handful of lawmakers have expressed support for
Trump’s effort, more have criticized it, and the president’s tweet
Thursday doesn’t seem to have changed many minds.

Sen. Jack Reed of Rhode Island, the top Democrat on the Senate
Armed Services Committee,
told Politico that it was too late to start
debating new provisions in the bill, especially ones that are
unrelated to defense policy. “At this last minute, this sudden
threat on an item that’s not even part of a defense bill … I don’t
think we could do it in a thoughtful, logical way at all.”

Speculating about Trump’s motivation, Reed said, “It seems
to be more out of spite than anything else.”

Most Americans Support Higher Tax on High Earners: Poll

About two thirds of Americans support President-elect Joe
Biden’s proposal to raise taxes on households earning more than
$400,000 a year while keeping taxes on those below that level the
same, according to a
new poll by The New York Times and Survey Monkey.

“Nearly all Democrats and Democratic leaners (88%) support this
proposal, along with 70% of independents and nearly half of
Republicans and GOP leaners (45%),” Survey Monkey’s Laura Wronski
wrote. “Even among those with household incomes of $150,000 or
more, the highest category for which we collect data, 62% of people
support an increase in taxes for those making at least $400K.”

Questioning 3,477 adults online from November 9 to
November 15, the poll also found majority support for making
college tuition-free for students from families earning less than
$125,000 per year; an emergency paid leave plan for sick workers or
gig economy workers during the pandemic; and a national effort to
control the coronavirus, even if it hurts some
businesses.

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