The Stimulus Scramble

Lawmakers are running out of time on passing a second COVID-19 relief package before the election.

Thursday, October 1, 2020  |  2:25 pm ET

After a long stalemate, lawmakers are in talks over a second COVID-19 relief package.

House Democrats introduced a revised version of the HEROES Act on Monday and will attempt to bring it for a vote before the October recess. The cost of the new package is in the range of $2.2 trillion, which is lower than the initial $3.4 trillion, but still higher than the $1.5 trillion the Republicans are expected to counteroffer.

WHAT'S IN THE PACKAGE

The new bill includes a long list of provisions, all of which can be seen here. Some of the key measures include:

  • An additional $1,200 stimulus check per qualifying taxpayer and $500 per dependent (which includes those under 25 who were omitted from the first stimulus payment)
  • A weekly $600 federal unemployment check through January
  • $436 billion in aid to cities and states to counter budget shortfalls
  • Additional assistance to the airline and restaurant industries
  • Funding for education and child care
  • An enhanced employee retention tax credit

WHAT HAPPENS NOW

Lawmakers on both sides of the aisle agree that a second stimulus is necessary as the payroll protections passed under the CARES Act in March expire on October 1, and the airline industry alone braces for tens of thousands of layoffs. The sticking point between the House and Senate revolves around cost. Republican negotiators have continually pushed back on providing more aid to cities and states — the biggest budget item in the bill. The Trump administration has indicated agreement to a bill in the range of $1.5 trillion. A compromise on the cost and what will be covered by the bill will be needed for the House and Senate to agree on a final package that is acceptable to the White House.

The clock continues to tick on passing a stimulus package before the election. The House is scheduled to recess on October 2 and the Senate is scheduled to recess on October 9. Both Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell could keep their respective bodies in session past the scheduled end of their sessions or call them back early to vote on a relief proposal. Both branches of Congress are eager to recess to return to their districts to campaign for reelection. Thirty-five Senate seats and all 435 House seats are up for a vote in November. However, members of Congress are reluctant to return to their constituents without having passed relief that most voters feel is necessary. Thus, there is an added incentive for both houses of Congress to come to a quick resolution on a stimulus package. However, the Supreme Court nomination hearings scheduled to begin October 12 will be competing for time in the Senate.

IF THE HOUSE PROPOSAL FAILS

If the negotiations on the House proposal fail, it is still possible for the House and Senate to agree on one or more smaller, stand-alone bills that target specific areas like the airline industry and negotiate a broader bill after the November 3 election. Possible smaller bills could include provisions for stimulus checks and/or an additional weekly unemployment check. It would be very difficult for members of Congress to return home and face voters empty-handed.

This week should provide some indication of what will happen to a relief bill. There is opposition to a new stimulus deal in Congress among fiscal conservatives. They either oppose new stimulus spending or would put a cap on certain areas such as small-business relief or school funding. Thus, we will have to wait and see what develops.

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