(CBSNewYork) — Talks on another round of economic stimulus continued over the weekend. But time is growing short for passing another stimulus bill before the election. According House Speaker Nancy Pelosi, who is heading up negotiations for the Democrats, a deal must be reached by this Tuesday if a bill is to pass by November 3.
That scenario is unlikely, given the distance between her and Treasury Secretary Steven Mnuchin. Pelosi is holding to her $2.2 trillion figure while Mnuchin, working on behalf of the White House, is sticking to $1.8 trillion. Despite that gap, the two sides agree on the need for another round of $1,200 stimulus checks and more enhanced unemployment benefits, as were found in the CARES Act, which expired at the end of July.
But there are significant differences in the details as well. The two sides remain at odds over language for a national strategic testing plan. As stated in a recent press release from the Speaker’s office about the latest round of revisions, “These changes make the funding a slush fund for the Administration which “may” grant or withhold rather than a prescribed, funded plan to crush the virus.”
Other outstanding issues include inadequate childcare provisions and more necessary funding for state and local governments. Also mentioned were the Child Tax Credit, Child and Dependent Tax Credit, and the Earned Income Tax Credit. Still, the Speaker expressed optimism that a deal could be reached before the election.
President Trump also expressed support for a large package last week.
STIMULUS! Go big or go home!!!
— Donald J. Trump (@realDonaldTrump) October 13, 2020
Of course, the week before that, the President shut down negotiations entirely.
…request, and looking to the future of our Country. I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business. I have asked…
— Donald J. Trump (@realDonaldTrump) October 6, 2020
Current polling shows Trump is trailing challenger Joe Biden in the polls, including in states like Arizona and Wisconsin. Given the prevailing winds, he seems likely to support another round of stimulus that includes a check with his signature on it. That political calculus may change with the outcome of the election, however.
The Senate, which would have to vote on a second stimulus package, has its own ideas on how to boost the economy. It is scheduled to vote this week on its own much more limited bill. According to Senate Majority Leader Mitch McConnell, the Republican-crafted coronavirus relief proposal includes additional unemployment benefits, an extension of the Paycheck Protection Program, financial aid to schools and more funding for testing and tracing. The $500 billion does not include another round of stimulus checks.
The considerable distance between what the Senate is proposing and what the House and the White House are negotiating makes a second stimulus that much more unlikely. McConnell promised over the weekend that the Senate would “consider” whatever deal they may reach.
The chances of a stimulus agreement by Tuesday seem, at best, remote. It should be noted that even if it were to miraculously happen, $1,200 stimulus payments and additional unemployment benefits wouldn’t reach the pockets of needy Americans until weeks after the election.
Meanwhile, consumers suffer as the economy staggers along. Job growth is slowing, and layoffs are rising. In the most recent week for which stats are available, 898,000 people filed for unemployment benefits for the first time, the highest level of new jobless claims in two months. Another 373,000 more who don’t qualify for traditional unemployment requested Pandemic Unemployment Assistance.
Households and businesses are facing difficult times. According to the Center on Budget and Policy Priorities, almost 78 million adults – 33 percent — are struggling to pay for the usual household expenses, such as food, rent, car payments, medical expenses, or student loans. That rate climbs to 40 percent in households that include children.
Longer-term prospects grow even worse if Washington fails to pass another stimulus package. Another dip in the economy would damage unemployed Americans far beyond what we’ve seen so far.
In recent months, spending made possible by stimulus checks, unemployment benefits and paycheck protection had been propping up the economy. “If there’s no unemployment benefits, then the people who were relied on to consume, they’re going to consume a lot less,” says Yeva Nersisyan, Associate Professor of Economics at Franklin & Marshall College. “And that then means firms who were selling them output will get a lot less revenue. They’ll start firing workers and so on. It becomes a vicious cycle, basically.”