WASHINGTON ― Two months after Congress passed its last coronavirus response bill, and despite a number of approaching deadlines, Republicans and Democrats appear far apart on another round of economic relief.
House Democrats passed a bill in May totaling $3 trillion. White House aides are advising President Donald Trump on a relief package of at least $2 trillion. And Senate Majority Leader Mitch McConnell (R-Ky.) has told Trump he doesn’t want the next measure to be more than $1 trillion.
But disagreement on the overall size of the next bill is far from the biggest hurdle. Perhaps the most contentious sticking point in the legislation is what Republicans don’t want: a continuation of extra unemployment benefits beyond their July 31 expiration.
McConnell told House Republicans in May that the Senate wouldn’t extend the additional $600 a week the federal government has been supplying to the unemployed since March ― and nothing seems to have changed since he made that promise.
Republicans have been touting a better-than-expected jobs report in early June as proof that the next relief bill doesn’t need to be massive, and they seem to believe ending the extra $600 a week would force people back into the workforce.
“I mean, we’re paying people not to work. It’s better than their salaries,” White House economic adviser Larry Kudlow said Sunday, parroting a GOP talking point about the need to let the unemployment benefits expire.
Kudlow added that Trump would be looking to institute “some kind of bonus” for people returning to work ― likely similar to a proposal from the Ways and Means ranking Republican, Kevin Brady of Texas ― but it’s clear Trump and Republicans have no intention of renewing the extra $600 a week.
The added money was designed to help people maintain their spending while staying at home to avoid catching or spreading the coronavirus, which has killed more than 116,000 Americans so far and continues to kill 500 to 1,000 Americans per day.
Republicans have totally rejected the notion that the money had any public health purpose, and the administration has been encouraging states to cut off people’s benefits if they turn down job offers. Instead, the GOP view on the added unemployment benefits seems to be that it was solely an economic stimulus. And the complaint from some employers that workers don’t want to return for less than they would make on unemployment has led Republicans to believe the economy will be better off by forcing those people back to their jobs.
At least, it would help the unemployment rate.
That piece of economic data has been a huge cause of concern for Democrats and Republicans. The unemployment rate sits at 13.3% ― a mark higher than any point during the Great Recession.
But the rate fell by 1.4 points in May, with 2.5 million people returning to work. For Republicans, that was evidence that Congress didn’t need to rush another round of stimulus.
“The jobs report pumped the brakes a little and put a lower ceiling on how aggressive the spending will be,” a senior White House aide told HuffPost, “but there will be one.”
The White House hasn’t wavered in their desire for some stimulus. And, with the presidential election less than 140 days away, that makes sense.
Luckily for Trump, Democrats also haven’t wavered in their desire for economic relief. And there’s general agreement from congressional Republicans that they ought to juice the economy ahead of the November elections.
The problem, however, is there’s less agreement on how much juice, how to juice, and when it will come.
A senior GOP aide told HuffPost on Monday that it was unlikely the Senate would move before July 4. And with Democrats still intent on extending at least some amount of extra money for unemployment ― the bill House Democrats passed in May would extend the $600 until the end of the year ― Republicans believe that July 31 deadline will bring Democrats to the negotiating table.
That’s certainly possible, but a deal would likely hinge on Republicans extending a portion of that $600, just as it would hinge on a number of other sticking points.
For one, McConnell has said a deal would require legal protections for businesses, schools and government agencies that reopen during the coronavirus pandemic. House Speaker Nancy Pelosi (D-Calif.) and Senate Minority Leader Chuck Schumer (D-N.Y.) have thus far opposed those sorts of protections. And while McConnell has shifted his stance on no relief for state and local governments, Republicans and Democrats are still likely far apart on the exact number.
Pelosi’s bill included nearly $1 trillion alone for state and local governments.
There’s also a disagreement over broad-based stimulus. Trump himself has said he’d like to see a payroll tax cut, which would reduce or suspend the 6.2% that workers and employers both pay for income up to $137,700. Meanwhile, Democrats have signaled that they want another round of $1,200 payments for people making less than $75,000.
The one saving grace for a deal is this sad reality: The coronavirus isn’t leaving anytime soon. New cases are rising ― even spiking ― in a number of states. And the economic hangover is likely to continue for months to come.
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