It has now been nearly six months since the first stimulus check was passed, and Americans are getting desperate for more aid. The U.S. Congress is still at a stalemate over the next big spending package, though there are signs that they are creeping closer to a compromise. Other factors have helped bridge the gap over the last week or so.
The House of Representatives and the United States Senate — controlled respectively by the Democrats and the Republicans — are expected to return to formal negotiations for the next stimulus check next week. The two groups are still talking out their disagreements, however, along with input from President Donald Trump‘s White House. Between exchanging jabs in the press and making phone calls during their recesses, lawmakers are showing signs that they might be able to compromise after Labor Day — even if many Americans believe they are already far overdue.
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The Senate returns from its month-long recess on Tuesday, Sept. 8. Many Americans begged their senators to postpone the recess or cancel it to get a stimulus package passed, but they did not. Congress had a prolonged recess as well, though they did return to the capital for an emergency hearing about the U.S. Postal Service.
In the meantime, millions of unemployed Americans and businesses have endured the ongoing coronavirus pandemic and the economic recession with little federal aid. Trump has passed some measures through executive orders, though even those have been controversial for their questionable efficacy and their sources of funding.
With less than a week left in the recess, the storm of negotiations will start back up again soon. Here is a look at where things stand going into the next formal Congressional session.
Closing the Gap
The most promising development in negotiations is the closing of the gap between Democrats’ desired price for the stimulus package and Republicans’. Last week, House Speaker Nancy Pelos had a 25-minute phone call with White House chief of staff Mark Meadows. Afterward, Pelosi told reporters that she had agreed to drop her maximum price by $200 billion, while Meadows had decided to raise his by $300 billion, according to a report by Forbes.
As hopeful as this looks, however, it will be hard to convince either side to get any closer together than that. Pelosi told reporters that she and her party are “not budging” any further than $2.2 trillion. Meanwhile, it is not entirely clear whether Meadows and the White House speak on behalf of Senate Republicans, who have stood firm by their $1 trillion total spending limit so far.
Eviction Moratorium
While the full stimulus package may be far off, Trump took care of one more item on the list with a new executive order on Tuesday. He gave broad powers to the Center for Disease Control and Prevention to stop evictions around the U.S., and provide financial aid to both property owners and tenants, according to a report by NBC News.
The original eviction moratorium in the CARES Act expired on July 24, leaving millions of Americans vulnerable to homelessness. Like that measure, Trump’s executive order comes with plenty of caveats and limitations, but it is still one less concern for some people amid this pandemic. It may also give lawmakers one less thing to debate next week.
Payroll Tax Cuts
Another program to hold Americans over until the stimulus package passes went into effect on Tuesday: Trump’s payroll tax cuts. According to Forbes, this came in another executive order, passed back on Aug. 8.
The order suspends payroll taxes from Sept. 1 to Dec. 1 of 2020, meaning that employees will not have to pay the usual 6.2 percent federal payroll tax. This applies to anyone earning less than $4,000 per bi-weekly paycheck before taxes. That typically includes any salaried employee making less than $104,000 per year.
This is technically a tax deferral, meaning that employers will be expected to pay back these taxes for all their employees within the first four months of 2021. This means that employees will likely see a greater percentage of their paychecks taxed from January to April next year.
For this reason, many critics are saying that the payroll tax cut is more of a campaign stunt than anything, putting temporary money in American’s pockets before the 2020 presidential election. Companies have the option not to participate in the program at all.
Different Approaches
Looking ahead to next week’s stimulus negotiations, Republicans and Democrats will need to overcome the fundamental difference in the way they are framing the debates overall. According to Forbes writer Rob Berger, “Republicans want to evaluate and negotiate each major piece of the stimulus package,” while “Democrats want to focus on the top line number.”
This means that, while Republicans debate how best to fit each program needed into the budget they’ve settled on, Democrats will demand that they expand the budget itself. Senate Majority Leader Mitch McConnell has railed against spending more than $1 trillion on this package — less than half of the CARES Act. Lawmakers on both sides argue that that is not enough.
White House on Unemployment
On Tuesday, U.S. Treasury Secretary Steven Mnuchin testified before a House subcommittee which is investigating the Trump administration’s coronavirus response so far. The treasury secretary has been negotiating the stimulus package on behalf of the White House, and he claimed on Tuesday that he fully supports enhanced unemployment insurance in the next bill.
This is not exactly a reversal from Mnuchin, but is a slight change of tone. Mnuchin and other Republicans have tried to bring the unemployment enhancement down from $600 per week to $200 per week, arguing that many Americans are being overpaid. While Mnuchin supports the program generally, he admitted on Tuesday that he still believes the weekly payments should go no higher than $300.
Remaining Hurdles
There remains a massive gap between the Republicans’ stimulus proposal and the Democrats’. Analysts have identified some of the most likely places for compromises to be made — particularly the financial aid to state and local governments. The Democrats’ bill provides $915 billion in funding, while the Republicans’ offers $150 billion.
According to Moody’s Analytics, both sides are off with their figures. The budget shortfalls could reportedly be covered with about $500 billion in this area, forcing both sides to meet close to the middle. Whether or not they will do so, of course, remains to be seen.
Other major disagreements still include the unemployment enhancements, liability protections for business owners and funding for the USPS. Hanging over all of that is Pelosi’s insistence that she will not budge on the $2.2 trillion price tag, versus McConnell’s insistence that this will be the last stimulus package the Senate agrees to pass.
Democrats Call for Compromise
Finally, with the stalemate dragging on, some House Democrats have become more outspoken in their calls for Pelosi to cut a deal, even if they lose some of their programs. Republicans have repeatedly offered to pass skinny bills or individual programs — knowing that McConnell will then refuse to consider any further stimulus packages down the road. Pelosi has taken his word on that, trying to cram everything possible into this bill.
In August, Rep. Cindy Axne of of Iowa published an open letter to Pelosi on behalf of her constituents, asking her to “bring up a simplified, straightforward COVID-19 relief package.” While it may not include everything that is needed, Axne wrote that “millions” of people “are relying on us to reach a deal that can deliver much-needed aid to those still under threat from COVID-19.”
Axne’s letter listed three bare minimum requirements that she felt Pelosi should take if she could get — “reasonable” unemployment aid through the end of 2020, an eviction moratorium and an extension of the Payroll Protection Program.
Similar letters have been published by others, including a group of 117 representatives calling themselves the New Democratic Coalition. Another group of 26 called the Blue Dog Coalition sent a letter as well, and Pelosi has publicly thanked these lawmakers for their input. However, she has been firm in her belief that this will be Congress’ last chance to pass meaningful aid.
