Coronavirus USA

Stimulus check: what’s happening with the $1,200 plan being pushed by Democrats?

House Speaker Nancy Pelosi has said Democrats are willing to resume negotiations with Republicans over a fresh stimulus package for the US economy.

Stimulus check: what’s happening with the $1,200 plan being pushed by Democrats?
Drew Angerer AFP

A long summer of on-off negotiations and counter-proposals over a fresh stimulus package to boost the US economy has born little fruit to date but a breakthrough could be approaching after House Speaker Nancy Pelosi said on Thursday that Democrats are “ready for negotiation” with Republicans. The two sides have failed to meet anywhere near the middle on a range of issues but until recently a second round of stimulus checks was one area where bipartisan consensus – with the blessing of Donald Trump – had been achieved.

The waters have though been muddied in that regard after Senate Republicans tabled yet another counter-offer on 10 September – the so-called “skinny” relief package that Democrats rejected out of hand. Not only did the pared-down proposal fail to address the keystone Democrat demand of additional funding for cash-strapped state and local authorities, a second round of stimulus checks was also noticeable only by its absence.

Stimulus package divisions remain deep

Senior Republicans have been eager to push down the total amount of a new stimulus package after backing the $2.2 trillion CARES Act in March but Democrats have so far proven unwilling to drop their financial demands into the region of the $1 trillion put forward in the HEALS Act. President Trump in August announced he was willing to add $300 billion to that and put pen to paper on a package, but that was also rejected as insufficient by Pelosi.

Republican lines are somewhat blurred on the issue of stimulus checks. Senator Rand Paul was the only non-Democrat to vote against the “skinny” proposal but publicly Republicans have voiced broad support for a second round of $1,200 checks as provided under the CARES Act. Speaking at a congressional hearing earlier this week, Treasury Secretary Steven Mnuchin was pushed on the issue and was quoted by CNBC as saying: “The administration does support another stimulus payment." 

However, Director of the United States National Economic Council Larry Kudlow has championed a “targeted” relief package focusing on healthcare, education, the economy and the extension of PPP loans for small businesses. He added on the subject of stimulus checks: “If they want to add targeted checks that’s fine too.”

Pelosi ready to negotiate with White House

The matter could be nearing a resolution though. Lawmakers are eager to push through a package with the presidential elections looming in November and the House this week passed a stop-gap bill to avert a government shutdown and keep the federal coffers ticking over until December, removing one more item from Congress’ sizeable to-do list

On Thursday, House Ways and Means Committee Chairman Richard Neal said Democrats are working on a $2.2 trillion coronavirus stimulus package that could be voted on next week as Pelosi reiterated she is ready to negotiate with the White House.

Neal said new legislative efforts got under way this week after Federal Reserve Chairman Jerome Powell said in congressional testimony that lawmakers needed to provide further support for an economy reeling from the pandemic.

Neal: "I think next week's ... appropriate"

"The contours are already there. I think now it's about time frame and things like that," Neal told reporters when asked about the potential for new legislation.

He predicted a vote could come within days. "I assume, since the House is scheduled to break for the election cycle, then I think next week's ... appropriate," said Neal, adding that Pelosi would determine when a legislative package might be introduced.

Democrat negotiators, who initially sought $3.4 trillion in relief under the HEROES Act, have since scaled back their demands to $2.2 trillion. Neal said a new legislative package would be somewhere near $2.2 trillion. Some media reports said it could be $2.4 trillion.