Trump Impeachment Could Delay Biden Stimulus

By Yuval Rosenberg

Trump Impeachment Could Bog Down Biden's Stimulus Plans

President-elect Joe Biden’s plan to pass a multi-trillion-dollar
stimulus package in the early days of his administration could get
caught up with the looming impeachment of President Trump.

House Democrats signaled Monday that unless Vice President Mike
Pence acts to remove the president from office by invoking the 25th
Amendment, they plan to vote to impeach Trump on Wednesday for his
role in inciting the deadly insurrection in Washington last week.
Members of the House Judiciary Committee introduced an article of
impeachment Monday, and it reportedly already has majority support
in the House. (For more on the dynamics of the impeachment effort,
see
this piece at Politico.)

Biden plans to roll out his stimulus plan on Thursday, and it’s
expected to include an increase in the value of relief checks for
individuals to $2,000, substantial support for state and local
governments and additional funding for vaccine distribution, among
other things. But there are growing concerns that the Senate could
get bogged down by the politics and logistics of the impeachment
effort, delaying consideration of the new stimulus proposal or
other key items on Biden’s early agenda.

Biden
said Monday that he hopes the Senate could divide
its workload once he takes office, spending half of its time on the
impeachment and half on his agenda, including confirmation of his
cabinet and taking up his stimulus package. But it’s not clear that
the Senate could or would operate this way.

"My priority is to get, first and foremost, a stimulus bill
passed and secondly, again to rebuild the economy," Biden said
Monday. "I’ve been speaking with some of my Republican colleagues
about being able to move on a second package sooner than later," he
said, referring to his proposal.

Another option for Democrats would be to delay sending the
article of impeachment to the Senate, providing the upper chamber
with enough time to address Biden’s top priorities before turning
to a trial of Trump.

Majority Whip Jim Clyburn (D-SC) said Sunday that the House
could delay transmission of the article of impeachment for several
months. "Let's give President-elect Biden the 100 days he needs to
get his agenda off and running, and maybe we will send the articles
some time after that," he
told CNN.

The economic and political challenges: Even without the
difficulty of holding an impeachment trial, quickly passing a
massive stimulus package could prove difficult in the Senate.
Democrats will need unanimous support from the 50 senators in their
caucus plus at least 10 Republicans to pass most bills. At least
one Democrat, Sen. Joe Manchin of West Virginia, has already
signaled some doubts about bigger stimulus checks, and it’s not
clear that many Republicans will support the effort.

Other Democrats are making their own proposals for inclusion in
the bill. Incoming Senate Finance Committee Chairman Ron Wyden
(D-OR) wants to increase the value of enhanced unemployment
payments to $600 per week, the same level as provided by the Cares
Act passed in March, while attaching the payments to automatic
triggers that are tied to specific economic conditions.

"Tying these programs to conditions on the ground also ensures
Mitch McConnell and Senate Republicans can’t hold them hostage,"
Wyden
told Bloomberg.

Timing could be important, though. Funding from the $900 billion
relief bill passed in December starts to run out in March, and some
worry that the economy will need another boost before then as the
country continues to struggle with record levels of coronavirus
infections and deaths.

Wall Street analysts are betting that Biden will get a
significantly smaller stimulus package than he wants, even without
the distraction of an impeachment trial in the Senate. JPMorgan
Chase analysts are projecting the passage of a $900 billion
package, Goldman Sachs is calling for $750 billion, while UBS pegs
the expected number at $500 billion.

"We are firmly in the camp looking for half a loaf rather
than a whole loaf" on the next stimulus bill, UBS’s chief U.S.
economist Seth Carpenter told Bloomberg, citing resistance from
centrist Democrats as a key factor in reducing the size of the
final package.

Deficit Hits $572 Billion in First Quarter of Fiscal 2021:
CBO

The federal budget deficit for the first quarter of fiscal year
2021 totaled $572 billion, up $215 billion from the same period a
year earlier, the Congressional Budget Office estimated on Monday.
Spending was up 18%, while receipts fell 0.4%. If not for a shift
in the timing of certain payments, the deficit would have been $525
billion.

The Committee for a Responsible Federal Budget estimated earlier
this month that the fiscal year 2021 deficit is on pace to total
$2.3 trillion, or 10.4% of gross domestic product, but that
projection did not include the official cost estimate for the Covid
relief and government funding package passed by Congress last month
— and it doesn’t include the cost of additional coronavirus
stimulus and other legislation being called for by President-elect
Joe Biden. Biden
said last week that his proposal will come with a
price tag "in the trillions of dollars."

Why it matters: "Economists largely
agree that deficit-financed spending is a good idea during an
economic crisis, but their estimates of how much is necessary vary
dramatically," The Hill’s Niv Elis
notes. "Many warn that the accumulated debt will
have to be addressed once the economy recovers."

Paycheck Protection Program Restarts

The Paycheck Protection Program
reopened on Monday with $284 billion in funding
authorized under the coronavirus relief package passed last month
and revamped rules meant to get forgivable loans to the small
businesses that need them most while also cutting the fraud and
abuse seen when the emergency loans were previously offered. The
program has so far provided 5.2 million loans worth $525 billion,
the government says.

The relaunched program will initially be available to first-time
borrowers before expanding on Wednesday to businesses looking for
second loans.

The new structure some changes for returning borrowers,
including a lower payroll cap of 300 employees, down from 500, and
a lower maximum loan amount of $2 million, down from $10 million.
Applicants for a second loan will also have to show a drop in gross
receipts of at least 25% in comparable quarters from 2019 to 2020,
but those looking to borrow $150,000 or less can wait to provide
documentation of the hit to their business before applying for loan
forgiveness. Borrowers must still spend at least 60% of their loan
on payroll to qualify for full forgiveness. Returning borrowers
must have used the full amount of their initial loan before getting
additional money.

Only smaller community lenders will take applications for at
least the first couple of days, a step meant to ensure the
relaunched program is available to minorities, women and other
underserved communities.

To reduce fraud, the SBA added new checks to verify application
information.

The program is scheduled to be open until March 31, and
officials say that, unlike the initial round of loans, they don’t
expect funding to run out.

Number of the Day: $1

While the average size of Paycheck Protection Program
loans distributed so far was just over $100,000, about 300
businesses got $99 or less — and some got just $1, Stacy Cowley
reports in
The New York Times.

"The profusion of minuscule loans is yet another illustration of
how the relief program’s hastily constructed rules sometimes led to
absurd outcomes," Cowley writes. "But lenders and accountants — who
have spent months poring over the program’s complicated and
frequently revised rules — noted that the relief effort was focused
on minimizing job losses, not preserving struggling
businesses."

One self-employed college admissions consultant in New Jersey
got $13. "That’s supposed to help my business? It was a joke," the
consultant, Stephanie Ackerman, told the Times.

Quotes of the Day

"Right now, there’s 40 million doses sitting on a shelf
somewhere. So the feds say it’s with the states. The states say
it’s with the feds. It really doesn’t matter to the patient who’s
not getting access to the injection."

– Dr. Scott Gottlieb, the former director of the Food and Drug
Administration, in an interview Sunday with CBS’s
"Face the Nation." Gottlieb said that the strategy
for administering Covid vaccines is "not working" and said the
nation needs to "hit the reset."

"With our health system and economy in crisis, and millions
of lives at stake, we cannot afford for this vaccination campaign
to continue to be hindered by the lack of planning, communication,
and leadership we have seen so far."

– Senate Democrats, in a letter Monday to Health and Human
Services Secretary Alex Azar, as reported by
Politico. The Democrats called the Trump
administration vaccine rollout a failure, citing data that just 36%
of distributed vaccines have been administered. They called for a
"comprehensive national vaccines plan, including detailed guidance
and an infusion of resources to support states."

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