CORONAVIRUS STIMULUS CHECKS

Second stimulus check update: why has Donald Trump pushed to approve the covid-19 relief bill?

President Trump after being silent on the matter since the election tweeted on Saturday that he wants Congress to do a coronavirus relief bill.

Second stimulus check update: why has Donald Trump pushed to approve the covid-19 relief bill?
CARLOS BARRIA REUTERS

Although some economic indicators are showing signs that the economy is still healing from the damage inflicted by the coronavirus pandemic the recovery is tenuous. Many of the programs that were put into place in the spring are ending as the virus surges yet again with winter setting in. Donald Trump has signaled via tweet, his favorite platform to make announcements, that he wants a covid-19 stimulus bill to get passed which he can sign before leaving office.

Lame-duck presidents are not known for getting much done but there might be hope looking back to 2008 when the economy was facing its biggest crisis in nearly a century. When then President George W. Bush was preparing to hand over the White House to President-elect Barack Obama the auto industry was on the verge of collapse. The two worked together despite their differences and Bush approved an auto bailout before Obama took office.

Twelve years later the US finds itself again in economic turmoil and with a presidential transition yet to take place. Trump briefly admitted that he lost the election on twitter Sunday only to say an hour later that he was not conceding. Until Emily Murphy the Trump-appointed administrator of the General Services Administration formally recognizes Joe Biden as the President-elect the official transition cannot take place. Trump has yet to invite Biden to the White House and the transition is expected to be bumpy.

The economy cannot wait for the vaccine

Economists agree that the economy desperately needs more economic stimulus to keep the recovery going as the third wave of covid-19 infections spread deeper into the US. The US can expect things to get worse with winter weather forcing people indoors where the virus can spread more easily. To stem the spread several states and localities have begun to reimpose measures limiting opening times for restaurants and bars, capacity for businesses and travel restrictions which will hurt an already fragile economic situation and lead to new layoffs and closures.

There has been a significant breakthrough with a Pfizer's successful coronavirus vaccine trials but it is yet to be seen how many people will take the vaccine in addition to how distribution works and people following up with the second necessary dose. Dr. Anthony Fauci has said on CNN he expects general distribution in the first quarter of next year and that the vaccine will be available to all Americans who want to get it by April. However, that is months away and there may not be time to wait to act on coronavirus stimulus before the economic damage turns into a full-blown crisis again.

What are the options for stimulus?

Prior to the election Speaker Pelosi and Treasury Secretary Steven Mnuchin, speaking for the White House, had been negotiating a stimulus package with the White House inching closer with $1.9 trillion in relief spending to the $2.2 trillion HEROES Act 2.0 passed in the House. Since the election there has not been any word that the two have been negotiating, however there are reports that Pelosi is speaking with Republicans in the Senate.

Meanwhile in the Senate, Majority Leader McConnell after winning reelection initially made comments that he was open to getting a stimulus package into law but last week reduced people’s expectations that it would be something bigger than he had been offering. It looks like he will continue to push for the so-called a 'skinny' bill, paid for with money left over from the original CARES Act passed in the spring which have failed to pass previously.

“Congress must now do a Covid Relief Bill. Needs Democrats support. Make it big and focused. Get it done!”

Trump on Saturday sent out a tweet saying that he wants action in Congress saying “Make it big and focused.” As with everything, one has to see what he does and not what he says, but what might he mean? It would appear that he is more in line with what Mitch McConnell with the addition of “focused.” Before the election he stopped all negotiations between the White House and the House only to swing 180 and tweet “STIMULUS! Go big or go home!!!”

Some of the smaller bills that could make their way back to the floor of the Senate would be the $500 billion bill McConnell put up before which included jobless benefits for the unemployed, funding for schools and the health-care system, and new small-business funding. Another was a bill to inject $260 billion into the small-business Paycheck Protection Program.

None of the bills took into consideration $1200 stimulus checks that were part of the CARES Act passed in the spring and feature in the HEROES Act that passed the House.

With the Senate still up for grabs stimulus may depend on what can turn the vote in Georgia. Both of Georgia’s Senate seats will have run-off races in January so relief for the airline industry will probably be a central feature in any negotiations but Republicans will want to avoid any larger packages to not risk angering their fiscally conservative base.