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The shutdown of the United States economy began as COVID-19 cases skyrocketed in America in the middle of March. As businesses were forced to shutdown, unemployment claims skyrockets and millions of hard-working Americans were told to stay home from work and file for unemployment. Congress then eventually signed the CARES Act which provides much-needed money to businesses, families, and several industries that were affected in a negative way.
There has been an ongoing negotiation in Washington as to whether another stimulus bill should be passed before the election. Many economic experts believe that the economy needs one final boost to aid the recovery process. Almost everyone is in favor of a rapid economic recovery, although some democrats are growing concerned that too fast of a recovery could hurt them politically during the election. Both parties have introduced their own stimulus plans and they are widely apart in many different ways. Republicans are targeting a smaller stimulus plan because they don’t believe trillions of dollars should be spent on a political wish list for the opposing party. On the other hand, Democrats believe that Republicans aren’t budging enough in terms of financial relief for states. Democrats also want to provide more funding for the postal service because they believe they can lean the election in their favor with mail-in voting.
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The good news for American families is that both parties actually agree on another round of stimulus checks for the American people. A renewed plan for unemployment benefits could also be negotiated as well with additional funding per week. There are a lot of political factors to consider before we will truly know if a stimulus plan will be signed before November 3rd.
The Democrat Strategy
It is important that we have a clear understanding of the political strategies from each political party before we try and answer the proposed question relating to a stimulus plan. There is no doubt that Democratic leaders are viewing the stimulus plan as an opportunity for them to get what they want financially. They would love to raise financial funding for the postal service and get some much-needed relief for Democratic-run cities and states that haven’t done a good job from an economic perspective.
There are several other things mashed into their multi-trillion dollar proposed stimulus plan as well. They have a plan that does provide extended unemployment relief at $600 per week. They also support another round of stimulus checks with additional eligibility for dependents and children.
They have basically adopted a strategy to where they either get all of the things that they want funded with the stimulus plan or there can be no stimulus plan. This is an All-or-Nothing approach and it is incredibly risky. The Democrats are trying to gain ground on an incumbent President who had built one of the best economies in the history of the world. They need to calculate their political strategy carefully and signing a stimulus bill would harm their chances in the election unless they got funding for mail-in voting with the postal service.
The Republican Strategy
Republicans have taken a slightly different approach in terms of a new stimulus plan. They believe that the final stimulus plan should not be as significant as the CARES Act. Several numbers have been thrown out there but they seem to have a maximum spending target of One Trillion dollars. There is no doubt that this is a significant amount of money. It isn’t that significant when compared to the Democratic proposal that spends more than Three Trillion dollars within their proposed stimulus plan.
Congress has been debating the final stimulus plan for many months and it is currently deadlocked between Nancy Pelosi and the President’s economic negotiators. It seems likely that both parties will have to come off of their desired numbers and try and meet in the middle. Giving out relief funding would be pretty popular just a few final weeks before the election. Both parties remain fairly unpopular and that probably hurts the Democrats more than anything because the incumbent typically has the advantage in any political election.
Republicans and Democrats will likely continue to negotiate in the final weeks and there is probably a reasonably good chance that something will get signed into law. The President will probably be in favor of a slightly larger stimulus plan because he would likely be given some much-needed credit before the election and it could certainly help build an electoral cushion over his Democratic competitor Joe Biden.
Conclusion
COVID-19 has damaged the global economy and has unfortunately taken hundreds of thousands of lives during 2020. From an economic perspective, small businesses have been absolutely devastated as they have been forced to shutdown for extended periods of time. The CARES Act certainly provided some initial relief in the early stages of the pandemic. It has now been months since the expanded unemployment benefits ran out at the end of July. Another round of stimulus checks would also probably go a long way in helping out with housing payments and utility bills for American families.
Giving out money and funding is always going to be popular during an election year. Republicans have to be careful to not give too much to the Democrats in terms of funding or they could hurt their very own election chances. On the other hand, Democrats desperately need funding for their poorly-run cities and states and it also wouldn’t hurt if they could get some enhanced funding for the postal service.
Only time will tell if a new stimulus bill actually gets done but there are probably some signs of life as the election draws ever so close. Both parties will have to negotiate and make some concessions before any stimulus deal becomes possible. American families will have to watch from the sidelines and hope that a deal gets done eventually.
