Coronavirus stimulus checks

Second stimulus check: US coronavirus relief bill update

It's crunch time for bipartisan talks on covid-19 financial support, with 14 days until the election and a new Senate vote on GOP bill tomorrow.

Second stimulus check: US coronavirus relief bill update
Sarah Silbiger AFP

The Senate is on the cusp of voting on the GOP's latest "skinny" relief bill of just half a trillion dollars, talks between Pelosi and Mnuchin continue for a much larger package and chances of a bill being approved before election day are slim to none.

Millions of Americans will be hoping that the package includes provision for a second round of the $1,200 stimulus checks that were first issued six months ago.

New GOP skinny bill unlikely to pass Senate

Wednesday marks yet another crucial date in the seemingly endless back and forth of stimulus bill negotiations. The bill, to be voted on in the Senate is for a total of $500 billion.

The Democrat-led House of Representatives passed a $2.2 trillion bill called the HEROES Act, which had little chance of passing in the Republican-controlled Senate where many are fiercely opposed to any bill exceeding a total of $1trillion.

The new bill will include expanded unemployment benefits, funding for schools and a second round of the Payment Protection Program. There is no mention of a second round of Economic Impact Payments (the $1,200 checks for individuals). Today the Senate votes separately on a standalone PPP fund.

This new bill does not come close to the figure that the Democrats are holding out for and may include funds initially provided for by the CARES Act. When asked about the disparity between his and Pelosi's current positions, McConnell said: “Republicans do not agree that nothing is better than something for working families."

Trump wants stimulus, can't offer big enough total

In recent weeks Trump has weighed into the negotations, until this month largely headed up by his Treasury Secretary Setevn Mnuchin. The President called for Republicans to support a more expensive bill despite it clashing with the party's ideological resistance to large-scale government spending.

The President had baulked at the Democrat’s initial $2.2 trillion package when he was first presented with it and refused to go any higher than $1.6 trillion in financial relief. However he upped that to a new $1.8 trillion package but the Democrat-led House of Representatives appears unlikely to accept any deal below $2 trillion.

Pelosi described Trump's latest offer as "insufficient" and claimed that it "amounted to one step forward, two steps back" in negotiation.

Trump desperate for pre-election economic boost

The matter of financial support for an ailing economy would always have caused a rift between the two major parties but the proximity to the election on 3 November makes these discussions even more contentious. The President is behind in the polls and needs to offer the electorate something significant if he is to see off challenger Joe Biden and secure a second term. After last week’s announcement that he was ending negotiations on a stimulus bill, the market suffered a sharp downturn as the pospect of immediate financial support appeared unlikely.

The far-reaching political implications of these discussions is no secret and Pelosi has accused Trump of now attempting to force through any financial support to strengthen his standing before Americans head to the polls, saying: “[Trump] only wants his name on a check to go out before Election Day and for the [stock] market to go up.”

The Brookings Institution: New stimulus package could rescue economy by mid-2021

While negotiations between the two sides continue the non-profit research body The Brookings Institution has conducted a series of studies into the economic consequence of potential stimulus packages.

They found that a total government expenditure of $2 trillion could see the economy return to pre-pandemic levels by the third quarter of next year, with GDP increasing by 4%. The package suggested by Brookings would be comprised of five sets of $400 billion programmes: stimulus checks, unemployment benefits, state and local aid, another round of the Paycheck Protection Program (PPP), and other provisions like airline help and testing.

It remains to be seen if and when the government will be able to pass a new stimulus bill to include another round of Economic Impact Payments but the evidence from Brookings seems to suggest that it could have a substantial effect on the US economy.

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there is no mention of a second round of Economic Impact Payments (the $1,200 checks for individuals)