stimulus update august 5 2020
Updated September 04, 2020

Republicans Offer $400/Week Unemployment?


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Republicans Offer $400/Week Unemployment?

This is your stimulus update for Wednesday, August 5.

Don’t want to read? Watch the video here!

$400 Per Week?

Big news is that reportedly yesterday Trump administration officials threw out $400 per week in supercharged unemployment benefits through early December, and yet Democrats still haven’t budged from the $600 figure.

Now, even though it doesn’t look like they’re going to right now, let’s say that Democrats agree to this, will G.O.P. senators go along with the $400 figure, I don’t know, I really doubt it.

Democrats Playing Hardball

But the bigger issue here, I think, in these negotiations is that it really appears that the Democrats haven’t really budged at all except maybe with respect to stimulus checks going down from $1,200 per dependent to $500 if we’re to believe what Steven Mnuchin said three days ago as reporters caught up with him.

Democrats might have been willing to do down by $15 billion on postal service funding.

You have Nancy Pelosi yesterday telling CNN that the price tag she’s willing to “settle” for is $3.4 trillion.

How the heck is that settling?

Because we’ve heard three trillion, three trillion, for the HEROES Act, I don’t know, maybe it’s been recalculated to $3.4 by now, but point is you’ve negotiated with Republicans for the past week, and you’re at the point now where you would settle for $3.4 trillion, it makes no sense.

What the #2 Republican Senator Thinks

This seems to be what Republican Senate leadership was complaining about yesterday in a press conference about the negotiations.

I’m not going to tell you what each one of the G.O.P. senators said, here’s what Senate Majority Whip John Thune said because it’s fairly indicative.

John Thune: And we all know that back in exactly what month it was but several weeks ago, the House Democrats passed their $3.5 trillion HEROES Act, which at the time it was suggested, and not just by us, but by lots of other folks that it wasn’t a serious effort. In fact, the New York Times the democrat leaders paper of record, came out and said, this is a messaging bill it’s not a viable piece of legislation. And so ever since that time, we have been looking at what we’ve done already making an assessment about what’s working and not what’s not working, and getting feedback about that and came up with, I think, a very targeted, fiscally responsible approach to dealing with the crisis that we’re now in, and started to, in good faith suggested Democrats that it’s time to start negotiating the next phase of the relief bill. They responded, “Pass the HEROES Act”. So Mnuchin and Meadows have been trying to sit down with them and and come up to, again a reasonable, common sense solution to moving this forward and in dealing with this crisis, and their responses basically been “Pass the HEROES Act.

So GOP Senators are saying that Democrats aren’t budging from the HEROES Act, which seems consistent with Nancy Pelosi saying she would settle for a $3.4 trillion bill, a dollar amount Mnuchin called ridiculous by the way.

Schumer on Stimulus Negotiations

Nevertheless somehow Chuck Schumer says that both sides have made concessions, I don’t know what concessions would have been made from the Democrats that result in $3.4 trillion, but here’s what Chuck said yesterday about the negotiations:

“We really went down issue by issue by issue, slogging through.  They made some concessions which we appreciated; we made some concessions which they appreciated. We’re still far away on a lot of the important issues but we’re continuing to go at it.  My view: the fundamental disagreement is the scope and depth of the problem and its solution.”

Schumer’s statement starts off super positive but then it gets increasingly concerning, then in the second sentence there he said that both sides made concessions, then the third sentence, we’re still far away on a lot of the important issues, and then the last one: “The fundamental disagreement is the scope and depth of the problem and its solution.”

So you all have a fundamental disagreement on the scope and depth of the problem and its solution, that kind of sounds like a problem to strike a deal any time soon.

Reports of a Compromise?

But on the other hand, and I don’t know what to make of this, but reportedly you have White House officials saying the two sides are close to a compromise and for some reason Trump saying yesterday that he might not have to use an executive order after all because progress is being made in negotiations.

I don’t put too much stock in this report because just this morning McConnell said on the Senate Floor that “Democratic leaders have moved about one inch, one inch in eight days,” and of course he’s getting his information from Mnuchin and Meadows.

So we basically have very different stories of what’s going on right now, it seems that the Democrats, at least Schumer, want to paint the negotiations as going well, both sides making concessions, but Republicans are shaking their heads, it’s one-sided.

Democrats Waiting for GOP to Break?

We know Mnuchin said yesterday that he wants a deal done by Friday, and maybe the Democrats are just waiting for Republicans to break on the key issues, I don’t know, because Democrats can sit there and say, “Hey, we proposed all this money for the people in the HEROES Act,” and you got to give it to them, Republicans, or they’re going to hate your guts.

Trump, Executive Orders, and the Payroll Tax

Now, on the topic of Trump and presidential authority with respect to stimulus measures, the president yesterday seemed to back down from his inquiry into using an executive order to get things done stimulus-wise, but this morning Trump was on Fox and Friends and he was again talking about exerting his authority through executive order, but for context one thing we’ve been keeping an eye on for the past few days is the White House and Trump, wanting to enact various stimulus measures on their own through an executive order from the president, particularly regrading things like potentially unemployment, the eviction moratorium, and a payroll tax deferral.

Here’s the President on Fox and Friends this morning:

Fox and Friends: What’s your plan for businesses when it comes to the payroll tax cuts?

Donald Trump: Well, I may do it myself. We’re negotiating right now. I have the right to suspend it. And I may do it myself, I have the absolute right to suspend the payroll… That’s an incentive to people—small businesses and businesses generally to hire back their workers.

This notion of the payroll tax, and this notion of using an executive order here to accomplish what he wants, is not getting out of Trump’s head.

I hope it doesn’t mess up the negotiations because we know that Mnuchin, chief Republican negotiator, isn’t the biggest fan of a payroll tax cut, and obviously Democrats don’t want to see one either.

The last thing we want is a deal to be struck between the negotiators and then Trump messing it up with his apparently very strong desire, likely influenced by Larry Kudlow, for a payroll tax cut.

But here’s the interesting thing here. Yesterday Trump said with respect to the payroll tax that he may not have to sign executive orders because progress is being made. Somewhat of a different tone this morning, and that could be indicative of something.

Today’s Stimulus Negotiation Meeting (Post Office?)

There is another negotiation meeting today, Mnuchin, Meadows, Pelosi, and Schumer will meet for the ninth day since the HEALS Act was released last Monday. Also joining them today for a portion of the negotiations will be the Postmaster General Louis DeJoy, the head of the postal service, because apparently as part of these negotiations the Democrats were negotiated down by Republicans to $10 billion in additional postal service funding from the $25 billion Democrats originally sought.

So this is interesting. Because when I think about the priority lists of the next stimulus bill, I would kind of be tempted to put postal service funding kind of lower down the totem poll than, say, unemployment or stimulus checks or eviction moratoriums to keep roofs over heads and food on the table.

I’m not discounting the importance of the mail here. There’s been reports of some mail delays in some parts of the country. I know mail is very important, people get their medication through the mail.

Is this a sign that potentially there’s a breakthrough in negotiations because now they’re talking about mail?

Or are they just taking a break from the heavier bits of the negotiations?

Mnuchin Proposes Eviction Moratorium

Yesterday, Secretary Mnuchin said that he proposed an eviction moratorium, yes, an eviction moratorium through early to mid-December but that Democrats didn’t like it because it doesn’t include rental assistance.  Frankly, I don’t like it because we’d be letting landlords kick people out during the holiday season, but better solution: get people money who can’t work anymore because their state shut down their place of business so they can pay their rent.

So moral of the story here, Republicans definitely dropped the ball by really not putting their thoughts on paper urgently enough, just doing so week of millions of Americans going off an economic cliff, the FPUC expiration, but Democrats have to negotiate too, a bit frustrating when I read that Pelosi’s settle number is $3.4 trillion.

And last but not least, at that Republican press conference yesterday, Mitch McConnell was asked if he would support $600-per-week supercharged unemployment if Trump supported it, and McConnell did not shut the notion down as ridiculous. He said wherever this ends up, McConnell is prepared to support it even if he has problems with it.

Logan Allec, CPA

Logan is a practicing CPA, Certified Student Loan Professional, and founder of Money Done Right, which he launched in July 2017. After spending nearly a decade in the corporate world helping big businesses save money, he launched his blog with the goal of helping everyday Americans earn, save, and invest more money. Learn more about Logan.

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