Covid Relief Talks Hit Another Snag

By Yuval Rosenberg

Shutdown Risk Looms as Covid Relief Talks Hit Another Snag

Congress is cutting it close as lawmakers scramble to avoid a
government shutdown just after midnight.

The House on Friday evening passed a two-day stopgap measure
that would prevent government funding from lapsing and give
negotiators another 48 hours to work out disagreements on a
coronavirus relief package.

The Senate is expected to try to approve the stopgap spending
bill by unanimous consent later Friday, but it’s not completely
clear that it will be able to pass. Any senator would be able to
block it, and some have already expressed frustration about the
process, but Sen. Mazie Hirono (D-HI) told CNN Friday evening that
she had been told no senator would object to the bill.

‘Significant issues outstanding’: Lawmakers appeared to
be closing in on an agreement this week that would provide $1.4
trillion to fund the government for the rest of the fiscal year, as
well as an additional roughly $900 billion in relief for the
unemployed, small businesses, schools, Covid testing and tracing,
and more. But talks have gotten bogged down repeatedly, with
lawmakers unable to agree on several key provisions.

House Majority Leader Steny Hoyer (D-MD) said Friday evening
that the negotiators were still trying to reach agreement on both
the Covid relief deal and the full-year spending package. “We are
hopeful that they will reach agreement in the near future. They
have not reached one yet. There are still some significant issues
outstanding,” he said on the House floor.

Reining in the Fed: A red flag for the negotiations went
up Thursday, when Sen. Pat Toomey (R-PA) demanded that the relief
package include language permanently shutting down several
emergency lending programs at the Federal Reserve that were created
by Congress in the early days of the pandemic.

“What this does is it says that nobody can revive or create a
duplicate of the programs that received Cares Act money,” Toomey
said. “It is not the role of our central bank, the Fed, to engage
in fiscal policy, social policy or allocating credit.” (For more
details on the Fed programs, see
this Bloomberg piece.)

Democrats complained that Toomey was threatening to torpedo the
burgeoning agreement by bringing up new issues, largely for
political reasons. “Senate Republicans are once again holding up
COVID negotiations,” Sen. Sherrod Brown (D-OH)
tweeted Friday. “Now they want to handicap the Federal
Reserve's ability to support our economy and struggling
communities. This has to stop. Americans are suffering, and they're
trying to nickel-and-dime your COVID relief.”

President-elect Joe Biden’s incoming National Economic Council
Director, Brian Deese, released a statement criticizing Toomey’s
effort and defending the Fed programs.

“As we navigate through an unprecedented economic crisis, it is
in the interests of the American people to maintain the Fed’s
ability to respond quickly and forcefully,” Deese said.
“Undermining that authority could mean less lending to Main Street
businesses, higher unemployment, and greater economic pain across
the nation. Congress’s good faith effort to deliver immediate
relief should not be delayed by provisions that could put our
future financial stability at risk.”

Seeking bigger checks: On Friday, a group of senators
including Josh Hawley (R-MO) insisted on seeing the details of the
relief package before agreeing to support it. Hawley said he wants
to be sure the measure includes direct payments for Americans,
preferably worth up to $1,200 per adult – a level that is twice
what is reportedly under consideration — before he agrees to the
two-day stopgap spending bill.

“We’ve been in the dark for days on end, we have absolutely no
idea what’s actually in this package … so I’m not willing to allow
a [spending bill] to go through until I know what’s actually in the
package. Direct assistance has got to be in there,” Hawley
said.

Sen. Ron Johnson (R-WI) shut down Hawley’s effort to pass a bill
calling for $1,200 checks, saying it would be too costly and
claiming that the checks would amount to “mortgaging our children's
future.” Republicans have reportedly been seeking to keep the cost
of the Covid relief bill under $1 trillion, and checks larger than
$600 would almost certainly push the measure over that level.

Trump, too, wants to see bigger checks: President Trump
was on the verge of throwing a curveball into the negotiations
Thursday by demanding direct payments of as much as $2,000 as part
of the package, according to a
report by Jeff Stein of The Washington Post. Aides
intervened, however, warning the president that his demand could
upend the negotiations.

Spending bill may still be a ‘heavy lift’ in Senate:
The short-term extension may face some opposition in
the Senate, where any member can block it. Majority Whip Sen. John
Thune (R-SD) said that a short government shutdown might be
unavoidable, given that a unanimous voice vote in favor of an
extension would be a “heavy lift.” Earlier in the week, Thune said
that if a shutdown is “for a short amount of time, on a weekend,
hopefully it’s something that’s not going to be all that
harmful.”

Quote of the Day

“Making a deal that only provides enhanced benefits for 10
weeks is like building a bridge that goes only a quarter of the way
across a chasm.”

– Liberal Economist and New York Times
columnist Paul Krugman, in a
column arguing that the pandemic relief bill
should focus more on providing enhanced unemployment benefits to
the millions of workers who have lost their jobs —and that
Republican insistence that any aid package cost less than $1
trillion is rooted in an insincere deficit hawkery that’s being
used to veil the GOP’s true motivation: to block the incoming Biden
administration’s agenda.

Chart of the Day: On Pace for More Than 78,000 December
Deaths

December is on pace to be the deadliest month of the coronavirus
pandemic, by far. As Covid-19 cases surge across the country —
there were a record 263,872
new confirmed cases on Thursday — the U.S. has suffered 42,535
virus-related deaths through the first 17 days of the month,
according to Covid Tracking Project data cited by
Bloomberg News. That already tops every month
except April.

The daily death toll reached a new record on Thursday, at 3,597.
With more than 114,000 Americans hospitalized with Covid-19 and
deaths rising rapidly, Bloomberg projects that the nation may see
more than 78,000 people die as a result of the virus this month —
and the number could wind up even higher.

An aggregate forecast compiled by the Centers for Disease
Control and Prevention from multiple models predicted this week
that the number of Covid-19 deaths is likely to rise over the next
four weeks, with the cumulative total rising from above 312,000
today to reach between 357,000 to 391,000 deaths by January
9.

It's been a wild news week, and it's
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