After weeks with none notable developments on the following stimulus package deal, it seems that negotiations will resume this afternoon at 2:30 PM. White House Chief of Staff Mark Meadows and House Speaker Nancy Pelosi (D-CA) are scheduled to talk on the cellphone and restart negotiations.
August seventh was the final time negotiators met concerning the reduction package deal.
Since then, fairly a bit has occurred by way of reduction. We’ve seen the President signal a number of govt actions, the House of Representatives handed a reduction invoice for the United States Postal Service, and there was even discuss of a “skinny” reduction invoice – however till as we speak, there wasn’t any exercise on a broader package deal.
So the place are we? The two sides stay very far aside and I wouldn’t count on a breakthrough as we speak. It’s simply step one in an extended street in direction of getting a invoice that each side will comply with.
The Total Cost Is A Huge Sticking Point
Democrats wished a reduction package deal that price greater than $three trillion. They handed the Heroes Act in May and that might’ve price an estimated $three.four trillion. In earlier negotiations, they agreed to decrease their ask to nearer to $2 trillion however don’t seem keen to go decrease than that.
The White House desires a reduction invoice that nearer to $1 trillion and balked on the Democrats’ provide of a $2 trillion invoice previous to the deadlock.
To make issues much more sophisticated, Senate Republicans need a fair smaller invoice and not too long ago proposed a “skinny” model that might price simply $500 billion. This invoice is smaller as a result of it excludes a stimulus examine and solely contains support that has bipartisan help equivalent to unemployment advantages, funding for the Paycheck Protection Program, funding for faculties and Covid-19 testing, remedy, and vaccines.
Will There Be a Second Stimulus Check?
The way forward for a second stimulus examine seems bleak. One was included within the Heroes Act, handed by the House of Representative in May. It was additionally within the collection of payments proposed as a part of the Heals Act, launched by the Senate earlier than its August recess. It shouldn’t be within the more moderen “skinny” invoice and it is probably not included sooner or later if negotiators are searching for an “easy” approach to lower prices on the invoice.
As a refresher, the Heroes Act supplied a $1,200 per individual cost ($2,400 for joint filers) to those that earned lower than $75,000 ($150,000 for joint filers) with a 5% phase-out for these incomes greater than the restrict. You would get an extra $1,200 per dependent, as much as three per family.
The Heals Act supplied the identical $1,200 financial influence cost because the Heroes Act – $1,200 per individual ($2,400 for joint filers) to Americans who earn lower than $75,000 ($150,000 for joint filers) with a 5% phase-out for these incomes greater than the restrict. You would get an extra $500 for every dependent however no restrict on the variety of dependents.
Both payments structured the funds as an advance on a refundable tax credit score.
The skinny invoice presents no stimulus examine, which lowers its price but additionally places the way forward for one other stimulus examine in jeopardy.
Will There Enhanced Unemployment Benefits?
Enhanced unemployment advantages, particularly as unemployment charges stay so excessive, is in all proposals – it’s merely a matter of how a lot support.
The Heroes Act prolonged the $600 per week federal unemployment advantages by way of January 31, 2021, whereas the Heals Act (extra precisely, the American Workers, Families, and Employers Assistance Act) supplied a advantage of $200 per week for a number of weeks adopted by a cost tied to 70% misplaced wages.
These have been the topic of the stimulus package deal negotiations with each side keen to make concessions on the quantity of the profit.
It seems that the consensus settles round $300 – $400 per week.
One of the massive priorities for Democrats is securing further support to states. Many states are in dire monetary conditions due to a pointy drop in tax revenues. With so many companies closed or working in a diminished capability, states aren’t gathering as a lot in gross sales taxes.
Republicans don’t like the thought of sending cash to states that will have mismanaged their funds prior to now. One of the massive monetary points is that many states have an enormous pension funding hole. As of 2018, that hole throughout all fifty states was $1.24 trillion.
Many Republicans see “additional aid to states” as one other type of bailout for monetary mismanagement and never a lifeline for states affected by a pandemic.
It stays to be seen the place negotiations will go however there’s a concern, no less than from the White House, that Speaker Pelosi could maintain out till the top of September. That’s when Congress has to go a seamless decision to fund the federal government. If they don’t, there’s the prospect of a authorities shut down throughout a pandemic.
There’s a thought that if a reduction invoice is coupled with a funding vote, it turns into extra palatable for Republicans who’re involved solely about the price of the invoice.