After a great deal of speculation, it appears the next stimulus package will be released next week. This is according to Senate Leader Mitch McConnell, who initially had hoped to release the bill on Friday, July 24th but was forced to delay it. This delay was caused by President Trump’s request for more time to look at the fine details of the proposal.
Of course, this comes after months of back and forth between both parties on this package. The pressure is on particularly now to pass something as millions of Americans who were receiving an additional $600 per week of unemployment benefits will stop receiving this funding at the end of the month of July. In addition, Congress had planned a recess from August 7th all the way through Labor Day weekend.
One might say it is an understatement to declare that there is certainly a lot at stake with this package. Senate Republicans have sought to cap the assistance in the bill at $1 trillion, while the Democrat led House of Representatives had previously passed the HEROES Act which proposed a total of
$2 trillion. This essentially means a compromise in the trillions of dollars will likely need to be made in the coming days.
This also comes at a time when many states have experienced a surge in coronavirus cases and have been forced to pause reopening plans. Some states that have been hit particularly hard like Florida, Texas and Arizona have even pulled back reopening plans and are playing the situation out day by day. With the threat of businesses still not being able to reopen and individuals not being able to go back to work, there is some semblance of bipartisan support to at least get something through.
One thing that both parties can agree upon is the inclusion of another stimulus check. A chunk of the CARES Act will be brought back with this package. The Trump administration passed the CARES Act in late March and has not been shy to refer to it in this new bill. The second stimulus equates to $1,200 for those Americans who made less than $75,000, another $500 for dependent children younger than 16, and $2,400 for joint tax filers earning less than $150,000. Anyone with an income higher than that will see checks that are deceased by 5% of their adjusted gross income over the limits.
As previously mentioned, the extra $600 per week that many are receiving will expire after next week. There is no certain compromise on what will happen with this for the time being, though there is speculation that the $600 figure might be lowered to $200 or less per week. Secretary Mnuchin has also maintained he wants to award 70% of wages, but there is no concrete agreement on this section as of now.
Many Republicans have been opposed to continuing the unemployment benefits because it could possibly discourage people from actively trying to get back to work. The GOP has also been opposed to keeping the $600 figure because it would actually be higher than what many workers were making before the pandemic. Republicans have also thrown around the idea of a return to work type incentive, but it remains to be seen if any mention of it will be in the package.
The DNC has pushed back on this, arguing that $600 is needed per week for the average unemployed individual to be able to at least be able to subsist for a while, pay bills, and continue to spend money in America’s now fragile economy. Some economists have pointed out that for every dollar of unemployment insurance ends up boosting nation wide spending by double that. Democrats have further contended that cutting this $600 per week will simply mean more non-payments and not necessarily a decrease in the unemployment numbers. There may likely have to be a compromise from the two parties in the coming days with this part of the package.
Another aspect of the package is in regards to giving states additional aid. From what has been said thus far, it looks as if the Republican proposal does not include any extra funding. However, it would amend the CARES act for more flexibility on already allocated funding.
There is also a section being debated about the Payroll Protection Program that was launched to help save small businesses. Not a lot has been said about this component, but Mitch McConnell has mentioned it should be included in this new package.
Another huge point of contention could be the insistence of having a payroll tax cut included. This cut would give those who are still employed a larger paycheck, but have no real effect on those still receiving unemployment benefits.
There is a game of chess happening in regards to this component of the package. The President has adamantly insisted the bill include the tax cut and that without one he would not sign it. This comes after Democrats in Congress have been opposed to this inclusion. This led President Trump to recently tweet about the issue pining blame on the Democrats. Unlike Trump, however, many other Republicans are actually against the cut as well. Even with that being the case, some have speculated that Trump may still sign the bill even if it doesn’t include the payroll tax cut, but blame the Democrats for its non-inclusion.
This is just one of the President’s many important priorities over the next few months with a re-election campaign and various protests still at the forefront of the news cycle. Inevitably, passing a second stimulus package would be a talking point for the President and others up for office in November 2020.
The timeframe will indeed be roughly ten days to reach an agreement and push the bill through. There is a possibility the recess in the Senate is pushed back because of this but there is no guarantees of anything for the time being. For now, all eyes are on the GOP with great anticipation as well to the looming response from the Democrats.
