Second stimulus check: will there be a new payment in October?

Hopes increased of a breakthrough in the impasse between Democrats and Republicans to push a new coronavirus stimulus package through Congress before the political focus shifts entirely to the November presidential elections as House Speaker Nancy Pelosi held further talks with Treasury Secretary Steve Mnuchin Tuesday, with discussions scheduled to continue Wednesday in the wake of the debate between.

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Both sides of the political divide have been unable to come to an agreement over the finer points of a new relief bill, but there is broad consensus on the need to provide a second round of stimulus checks to US citizens hard-hit by the economic effects of the Covid-19 pandemic.

On Monday Democrats presented their latest proposal to Republican negotiators - led by Mnuchin and White House Chief of Staff Mark Meadows - a $2.2 trillion bill based on the HEROES Act of last May that narrowly passed the House but was unable to make a dent in Senate resistance to a $3 trillion-plus spend. Republicans have proven increasingly unwilling to countenance anything over the $1 trillion laid out in the HEALS Act, which Democrats have said does not go nearly high enough to meet the needs of the economy and the American public at large. 

Pelosi and Mnuchin attempting to find common ground 

White House negotiators offered to go up to $1.3 trillion and Meadows has previously said that Trump was ready to put pen to paper on that bill. Democrats though are holding out for a more wide-ranging package after flatly rejecting a so-called “skinny” relief package proposed by Republicans.

"I'm hopeful," Pelosi told reporters who asked whether agreement on additional coronavirus relief could be reached this week. Her discussion with Mnuchin on Tuesday was their third conversation in as many days and the House Speaker has made assurances that Congress will not be going anywhere until a deal has been hammered out. 

"The two went over the provisions of the updated Heroes Act and agreed to speak again tomorrow," Pelosi spokesman Drew Hammill said on Twitter, referring to the $2.2 trillion measure unveiled on Monday by Democrats.

The new proposal included $436 billion for state and local governments, as well as money for education, testing, €25 billion to protect airline industry jobs and for the small business loan program known as the Paycheck Protection Program, a statement from House Democrats said.

It would also provide a new round of direct payments to Americans of $1,200 per taxpayer and restore federal unemployment benefits of $600 a week through January.

Pelosi has taken the lead for Democrats in trying to reach a compromise with the Trump administration on a further coronavirus relief bill. Pelosi and Senate Democratic leader Chuck Schumer had been pressing for $3.4 trillion in the HEROES Act, but have now scaled back their demands by over a trillion dollars in the latest proposal.

Kudlow: Republicans don't see need for "gigantic" package"

In an interview with CNBC, White House economic adviser Larry Kudlow made clear that the White House still views the $2.2 trillion figure as too high. "There are things, I think, that both sides agree with but then the other team wants a gigantic package and we don't think we need that," he said.

"Hopefully we'll make some progress and find a solution for the American people," Meadows told reporters on Capitol Hill.

Pelosi on Monday urged the Trump administration to raise its offer. "He has to come back with much more money to get the job done," she said of Mnuchin in an interview with MSNBC.

However, despite the latest attempts to bridge the considerable financial divisde bewteen Democrats and Republicans, time is running extremely short for any package to pushed through before the presidential elections.

If the Senate passes the bill for a second stimulus check before end of September, the House will have until 1 October to agree on it and the President could sign it as early as 2 October. Once this chain of command passes through everyone, according to United States Secretary of the Treasury Steven Mnuchin, the IRS will be in a position to start sending the second round of payments on the week of 12 October.

If no vote happens this month, other potential dates (based on Congressional voting schedules) include 9/12 October, 16/19 October and 23/26 October.

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