Tom Brenner | Reuters
A legislative stalemate in Washington is preventing Congress from getting more financial relief to millions of Americans who are facing financial hardship.
Despite that impasse, there are actually a handful of stimulus initiatives that leaders on both sides of the aisle agree on. They just have not been combined into one package or put forward as individual proposals, according to Ed Mills, Washington policy analyst at Raymond James.
The reason can be summed up with one word: politics, Mills said. However, those hoping for another aid package should not necessarily give up all hope.
“The most optimistic thing I can say is that, in D.C., things are impossible right up until the moment it’s inevitable,” Mills said.
“We have been surprised by D.C. in the past, where something that has been declared dead finds a way of resurrecting itself because of an unseen catalyst,” he said.
Lawmakers continued to discuss the state of the U.S. economy and a potential new legislative package during a Senate committee hearing on Thursday.
If more stimulus aid isn’t passed, spending will likely weaken and the 11 million Americans who are currently unemployed may have a more difficult time getting back to work, Federal Reserve Chairman Jerome Powell said.
“We will see that the economy has a harder time sustaining the growth that we’ve seen,” Powell said. “That’s the risk.”
Where politicians agree help is needed
Hundreds of jobless people wait outside the Kentucky Career Center for help with their unemployment claims on June 19 in Frankfort, Kentucky.
John Sommers II/Getty Images
Both Republicans and Democrats generally agree that financial aid is needed, according to Mills, including enhanced federal unemployment benefits; stimulus checks; small-business relief, including forgiveness of loans; schools; health care; state and local governments and airlines.
Taken together, the initiatives could make up a package in the $1.5 trillion to $2 trillion range, he said.
Those figures are just an estimate and subject to change. For state and local aid, for example, there is bipartisan support for providing more help. But those talks break down when it comes to how much money to provide and where it is directed, Mills said.
Sen. Mike Crapo, R-Idaho, chairman of the Senate committee on banking, housing and urban affairs, said during Thursday’s hearing that Congress needs to act now. Moving separately on initiatives both parties agree on might help them do that, he said.
“I believe that there are many items that we have already reached agreement on or which we could reach agreement on very rapidly if we had the willingness to simply take them up and do them individually,” Crapo said.
Sen. Sherrod Brown, D-Ohio, also urged fast action, particularly on enhanced federal unemployment benefits.
“You could get 47 Democratic votes for $600 a week this afternoon, if you’re willing to do it,” Brown said.
Brown complained to Treasury Secretary Steven Mnuchin that the administration’s lack of action on the issue is the equivalent of saying to 600,000 individuals who are unemployed in his state, “Sorry, you’re on your own.”
“I think that’s just a gross misstatement and exaggeration,” Mnuchin said. “I’m willing to sit down any time for bipartisan legislation in the Senate. Let’s pass something quickly.”
Democrats are unwilling to negotiate on any package worth less than $2.2 trillion, Mnuchin said during the hearing.
What could prompt action
Speaker of the House Nancy Pelosi and Senate Majority Leader Mitch McConnell at the U.S. Capitol on Jan. 15, 2020.
Drew Angerer | Getty Images News | Getty Images
Politicians have been able to prolong passing a package because the typical hard deadlines they normally would face have changed.
Summer recess, for instance, would have been one of them.
“Going home in August really took the pressure off Congress to get something done,” Mills said. “Congress wasn’t being held hostage until a deal was produced.”
Another catalyst for action typically has been the markets, Mills said. The market’s climb to new highs over the summer also took pressure off lawmakers to get a deal done, he said.
As the economy has continued to reopen and many jobs have come back, the urgency to act has been further reduced.
One thing that could bring lawmakers back to the negotiating table is the growing need for more disaster relief in the midst of an active hurricane and wildfire season, Mills said.
“If Trump wins re-election, that’s probably the strongest argument for getting a post-election bill done,” Mills said.
If Biden wins, however, that could take away the incentive for Trump to act and may push further relief off until after the inauguration, Mills said.