7/30 Stimulus Update: Trump Talks BIGGER Stimulus Checks + Romney’s Unemployment ProposalCOVID-19
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Stimulus Update 7/30/2020
This is my stimulus update for Thursday, July 30.
Don’t want to read? Watch the video here!
Trump Talks Bigger Stimulus Checks
Donald Trump: It may go higher than that, actually.
I’d like to see it be very high because I love the people. I want the people to get it.
I’m not even going to speculate here what he could possibly mean by this, I think this is just political talk, you can kind of see it in his answer where he said, “I’d like to see it be very high because I love the people, I want the people to get it.”
Take it or leave it, not gonna dwell on this statement, reality is as I’m going to share with you in a bit, the talks between Democrats and Republicans aren’t going anywhere right now, I’ll get into all that, but first let’s talk economy.
Big economic news right now is that the country experienced the worst quarterly economic contraction ever in the second quarter, that’s this past April through June. Stock market’s tanking on the news.
U.S. gross domestic product shrunk contracted by 32.9%.
This shouldn’t really come as a surprise though because the entire country was on lockdown for much of Q2.
What’s a little more eyebrow-raising is that the number of new unemployment claims has risen, albeit by a small amount, for the second week in a row.
1.434 million for the week ending July 25, up from 1.422 million for the week ending July 17, which was then up from 1.3 million for the week ending July 11.
This tells me folks that the unemployment crisis is far from over, don’t need to be a genius to see that.
State of the Negotiations
Still Democrats and Republicans are a sea apart when it comes to reaching an agreement on the next stimulus package including an extension of the enhanced federally funded unemployment benefits.
Mitt Romney is coming up with his own plan for unemployment, and I’ll tell you about it later, but first let me say that when it comes to Democrat-Republican negotiations on the next stimulus package, Mitch McConnell really isn’t front and center, he’s a very important figure in all this, but the Republican negotiations right now are being led by the White House, by Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows, who have both met for the past three days with Democratic Congressional Leaders Nancy Pelosi and Chuck Schumer.
Yesterday, Meadows told reporters after the meeting that Republicans and Democrats are nowhere close to a deal.
Senate Minority Leader Chuck Schumer basically said the same thing when he said, “Our Republican friends don’t seem to come close to meeting the moment…They’ve put us up against the wall. We have two cliffs because they wouldn’t negotiate for months. They’re tied in a total knot because of the disunity in their caucus, because of their inability to gather votes, because the president says one thing one day, he says another thing the other day. We want to come back and keep talking to them. But they don’t have anything to say.”
On this point, to perhaps hurry negotiations along, Mitch McConnell expressed openness to a watered-down HEALS Act — yes, he’s floating the idea of making stimulus smaller, here’s what he said yesterday to Judy Woodruff on PBS News Hour:
Judy Woodruff: Mr. Majority Leader. Thank you very much for joining us. The Chief of Staff at the White House Mark Meadows has just said in the last few minutes, that they are nowhere close to a deal between the two sides on COVID relief given the division among Republicans, members of your own party, does that mean these additional unemployment benefits are going to lapse on Friday?
Mitch McConnell: Well, I certainly hope not. Neither side would like for that to happen. And, you know, many things are around here happened at the last minute, this is only Wednesday. So, hope springs eternal it will reach some kind of agreement, either on a broad basis or a more narrow basis to avoid having an adverse impact on unemployment.
There at the end McConnell said he hopes that Democrats and Republicans can reach an agreement either on a broad basis or a more narrow basis.
Pelosi has said that she is not willing to do anything piecemeal.
Another good question that Judy had for McConnell was regarding food stamps, the HEROES Act as we discussed previously on the channel among other things pertaining to food stamps, the HEROES Act proposes to increase both the minimum and maximum SNAP benefit per household through Q3 2021, and Judy asked the Majority Leader about this why there’s no food stamps in the HEALS Act.
Judy Woodruff: Let me ask you about a number of other things very quickly. Government reports are right now, that as many as 26 million Americans, most of them with children say they aren’t getting enough to eat these days. We know that for very young children that can be incredibly harmful. Democrats, the democrats plan right now increases food stamp or SNAP benefits by 15%. The Republican proposal would not extend those increased benefits. Why not?
Mitch McConnell: Well, I’m sure when we sit down to talk to the Democrats, that’ll be an area we discussed. But of course, one thing that’s extremely important to make sure children are well fed is to get him back in school. And we actually put more money in our proposal than House Democrats for education. That’s both K through 12, and college. And to the extent that these local school districts are allowed, make the decision to let their children come back to school, that’ll take care of a lot of the, you know, for many these kids, the best meal they get to the day is the one they get at school. So getting them back in school, I think is an important step in the right direction.
So McConnell basically brushes this question aside and says, “Yeah, you’re right, we’re not proposing anything for food stamps in the HEALS Act because you know, Democrats are gonna negotiate us up on that one.”
What a perspective to have, right. We’re not going to put something in the bill that would probably be good for people right now because we want to wait to see what we can get in negotiations for putting it in there.
He basically had the same answer later in the interview when asked about the eviction moratorium, he just said, that’s something to negotiate.
So McConnell hurriedly transitions the conversation to school reopening, which like stimulus checks is another bipartisan goal, both Republicans and Democrats and pretty much everybody agrees that kids should go back to school.
In McConnell’s Defense
In McConnell’s defense, he basically does say later in the interview that he would say no to the FBI building in the bill — which Trump doubled down on again yesterday — as well as anything in any legislation in the next stimulus bill not directly related to the current economic crisis and COVID-19.
He said, yeah, there’s some Republican junk in the HEALS Act. We also said, of course, there is some democratic junk in the heroes act right like the elimination of a $10,000 cap on the state and local tax deduction, which Republicans have characterized as something benefiting blue state millionaires.
Mitt Romney’s Unemployment Proposal
Meanwhile, Senator Mitt Romney is coming up with his own unemployment proposal, this is his way of trying to avert this cliff that the millions of Americans on unemployment are facing with the expiration of the FPUC.
His plan would give states two options, they pick one.
First option is people get 80% of their initial wage, combined fed and state, and it’s up to the state’s discretion to determine whether or not their technology could handle that efficiently.
Second option under Romney’s plan is to make the federal boost $500 per week in August, $400 per week in September, and $300 per week in October, and hopefully by November we’ll have figured something else out.
HEALS Act would reduce the payment to $200 a week through October 4 and then states would have to try to pin combined federal and state unemployment benefits to 70% of lost wages through the end of the year with the max federal kick-in at $500 per week.
Now, I know a lot of you on unemployment love the HEROES Act plan, the full $600 per week extended into early 2021, but that’s not an option in this question, I just want to know between Romney’s plan and the HEALS Act plan for unemployment.
In terms of the CARES Act eviction moratorium that expired last Friday, although Trump mentioned extending it earlier this week, according to Larry Kudlow, the White House is still studying the effects of extending the moratorium. The moratorium is not in the Republican HEALS Act.
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.