Second stimulus check: what did Mnuchin say about new negotiations?

Republican Treasury Secretary Steven Mnuchin has released a statement with details of a White House stimulus bill proposal in response to the bipartisan bill worth $908 billion which was unveiled last week in Congress. Currently in negotiations with Mnuchin on the Democrat side is Speaker of the House Nancy Pelosi.

In the statement, Mnuchin confirms that with the support of the White House Chief of Staff Mark Meadows, Senate Majority Leader Mitch McConnell and House Minority Leader Kevin McCarthy, he'd drafted counter-proposal amounting to $8 billion more than the bipartisan bill. In it, Mnuchin says is money for state and local governments and robust liability protections for businesses, schools, and universities.

Further details on latest Mnuchin / White House stimulus proposal

Talking to The Washington Post, two sources familiar with the matter elaborated on some of the proposal’s finer details. The Mnuchin proposal offers far skinnier federal unemployment benefits than the bipartisan bill, and instead offer a stimulus check worth half the amount approved in March, $600 per person and $600 per child.

The Post reported that the GOP proposal was a nonstarter for Democrats and a sharp rejection of the bipartisan bill that in recent days brought hope that fractured negotiations may be progressing in the face of a severely damaged economy and mounting desperation on the part of working Americans adversely affected by the covid-19 pandemic.

Mnuchin: full statement on stimulus bill negotiations

“Speaker Pelosi and I spoke today at 5pm, and on behalf of the President, I presented a $916 Billion proposal, which is a slightly larger package than the bipartisan proposal of $908 Billion. This proposal includes money for state and local governments and robust liability protections for businesses, schools, and universities.

“As part of this proposal, we will fund it using $140 Billion in unused funds from the Paycheck Protection Program and $429 Billion in Treasury funds.

“Chief Meadows and I have reviewed this proposal with the president, Leader McConnell and Leader McCarthy.

“I look forward to achieving bipartisan agreement so we can provide this critical economic relief to American workers, families and businesses.”

What did Pelosi say about Mnuchin proposal?

In a statement responding to the White House counter-proposal, California Republican Nancy Pelosi and Senate Minority Leader of New York, Chuck Schumer strongly criticised the terms.

“The bipartisan talks are the best hope for a bipartisan solution,” the statement said. “The President’s proposal starts by cutting the unemployment insurance proposal being discussed by bipartisan Members of the House and Senate from $180 billion to $40 billion. That is unacceptable.”

What is in the bipartisan bill of $908 billion?

A bipartisan group of moderate House and Senate members last week presented a brand new stimulus proposition at a press conference. The bill amounts to a middle-ground option between Mitch McConnell’s previous proposal and the Democrat House bill passed in October. The plan calls for $908 billion on a range of covid-19 relief measures.

During the presentation Mitt Romney, Republican of Utah said “I happen to be a deficit hawk. I don’t like borrowing money. I don’t like spending money we don’t have. But the time to borrow money is when there is a crisis. And this is a crisis.”

Part of the bill provides for four months of additional unemployment benefits but in a compromise the top-up would be just $300 as opposed to the $600 Democrats were seeking. The bill also calls for state and local funding to the tune of $160 billion, which will pay for front line workers. However, like the McConnell proposal there is no provision in the bipartisan proposal for another $1200 stimulus check.

Stalemate between Democrats and Republicans

The negotiators Nancy Pelosi for Democrats and Steven Mnuchin and Mitch McConnell on the Republican side have been at loggerheads on specifics of a significant second bill since June. Major tensions remain between the parties on the overall spending and scope of the bill.

While Pelosi has dropped the $3.4tn overall spend proposed in the Democrats’ failed HEROES Act to $2.2tn, Mnuchin has raised the White House’s offer from the $1tn in the HEALS Act - a bill proposed by GOP senators in July - to $1.9tn.

How badly does the US economy need stimulus?

A new report from the Economic Policy Institute recommends that “Congress provide debt-financed fiscal support of $2 trillion between now and the middle of 2022, and then continue support on the order of $400 billion annually between then and the end of 2024, with a slow phaseout of this aid thereafter.”

With millions of Americans unemployed directly owing to the coronavirus pandemic and the last trickles of enhanced unemployment benefits due to dry up come 26 December, Josh Bivens explains that this plan needs to “first stop the economic bleeding and then repair the aspects that have been “rotted away” in order to rebuild a resilient economy.”

Add to this the ticking time bomb of existing trickling benefits implemented by the CARES Act in March that are due to finally expire by 31 December 2020 and things start looking pretty desperate for a lot of Americans.