A Messy Transition Focuses on a Covid Stimulus Bill — and Iran
Author: Greg Valliere
November 30, 2020
AFTER AN EXCEPTIONALLY BUSY THANKSGIVING BREAK, one image stands out: Americans waiting in long lines to get food. Benefits affecting millions of people expire on Dec. 31, and the need to pass a pandemic relief bill is the dominant issue as Congress returns this week.
A CLEAR MAJORITY IN CONGRESS — including most Republicans — agrees that a stimulus package should pass in December. Most economists, and officials at the Federal Reserve, agree that the economy could slip into recession without fresh federal aid for sick leave and unemployment.
THE PROBLEM, OF COURSE, is the details. In addition to differences on the price tag, each party will fight for a controversial issue: for the Democrats, it’s huge aid to state and local governments; for the Republicans, it’s liability protection for businesses that could be sued by victims of Covid-19.
HERE’S THE VEHICLE TO WATCH: A budget bill has to be passed by midnight on Dec. 11 or there could be a government shutdown on Dec. 12. Sources we spoke with over the weekend think there’s growing momentum to attach some pandemic relief to this “continuing resolution.” No one anticipates a shutdown.
THE KEY PLAYERS: Senate Majority Leader Mitch McConnell will have to acknowledge Joe Biden’s election victory, and McConnell will have to endorse some type of pandemic relief. This should happen within days. The other key player will be Maine GOP Sen. Susan Collins, who has tremendous clout in the wake of her impressive Nov. 3 victory. Collins could cobble together a bill.
A COMPROMISE IS LIKELY, in our opinion, if the Democrats are willing to accept far less than Nancy Pelosi’s unrealistic goal of well over $2 trillion. An aid bill this month costing just under $1 trillion would be enough to feed people and extend unemployment benefits through the winter, until vaccines come to the rescue by early spring.
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WE WROTE LAST WEEK and we reiterate now — the most unsettling issue in Donald Trump’s final weeks is geopolitics. His deep antipathy toward Iran gives Benjamin Netanyahu carte blanche until the Jan. 20 U.S. inauguration; the Israelis want to crush Iran’s nuclear program, as Tehran aggressively enriches uranium.
ISRAEL’S ASSASSINATION of Iran’s top nuclear expert may have been a Netanyahu-Trump ploy to box in Biden, who has increasingly slim prospects of re-engaging with Tehran. Between now and Jan. 20, we worry that a miscalculation by Iran or the U.S. in the Persian Gulf could escalate into a crisis.
ON A WIDE RANGE OF ISSUES — from regulatory policy to the Federal Reserve’s rescue funds — Trump will play a huge role in the next seven weeks, complicating Biden’s first year in office. Geopolitics is the major wild card, with Iran and China as the major Trump targets. U.S. relations with Beijing will not improve any time soon; China already is in a ferocious dispute with Australia.
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THE LEFT IS ALREADY GRUMBLING AT BIDEN: Yesterday’s Biden appointments of mostly female liberals to positions in communications and the economy may quell the left’s assertions that white moderates have been nominated for too many key positions. The focus now is on the Justice Department, where Deval Patrick, the African-American former governor of Massachusetts, is the favorite to become Attorney General.
DESPITE THEIR LIMP SHOWING in the Nov. 3 elections, the left is itching for a fight, which could come if Bernie Sanders isn’t nominated as Labor Secretary. Republicans like Marco Rubio are also itching for a fight, which raises the prospect that at least one of Biden’s nominations — perhaps Neera Tanden at OMB — could fail to win Senate confirmation.
THE BIGGER ISSUE FOR BIDEN is that his desire to compromise is already annoying Progressives, who want him to lash out at Republicans who refuse to accept the election result. Biden thinks he can cut deals with McConnell and other Republicans — but the jury is clearly out on whether that will happen.
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