Situational Awareness
The House and Senate reconvene today after an intense August break highlighted by major party nominating conventions and continued protests that have at times turned deadly. While the House is in session this week, it will largely focus on committee business with no votes planned until September 14. Senate Majority Leader Mitch McConnell (R-Ky.) announced last week that the chamber will attempt to pass a scaled-back stimulus package this week totaling roughly $500 billion in an effort to jumpstart negotiations.
Skinny Relief Bill on Deck in Senate
Senate Republicans will be meeting this week to gauge support for a scaled-back relief package aimed at bolstering a still fragile economy. The package is expected to include additional unemployment benefits of $300 per week, $105 billion for schools, $10 billion for the U.S. Postal Service, Paycheck Protection Program funds for small businesses, $45 billion for vaccines and testing, and limited liability protections for employers. The issues of additional support to individuals and funding for state and local governments would not be included, though they are priorities for President Trump and Democrats respectively. There has been increased resistance to further spending among conservatives who cite better employment numbers and concerns about the annual deficit, which is currently at $3.3 trillion and headed higher depending on the level of relief coming out of negotiations. These deficit levels have not been seen since the financial crisis in 2008 and 2009.
Negotiators Far Apart on Larger Relief Package
Negotiations over a broader relief package remain stuck on key priorities and big-ticket spending items. House Democrats passed the HEROES Act earlier this year, which included a price tag of $3.4 trillion. House Speaker Nancy Pelosi (D-Calif.) has remained at point in negotiations for Democrats and has been holding fast to additional funding for state and local governments, unemployment payments of $600 per week above normal levels, and emergency funding the U.S. Postal Service to offset revenue losses related to the pandemic and funds to support increased mail-in voting. There are increasing concerns about negotiations focusing on overall funding levels and adjusting policies to fit the numbers. Economists on both sides of the aisle have been urging policymakers to focus on the economic realities on the ground and build policy from there to ensure funds are going where they will have the most effect in supporting the economy.
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