Congress Plods Along; Pandemic Aid May Take a Few More Days
Author: Greg Valliere
December 17, 2020
THERE’S A REASON WHY CONGRESS has a 19% approval rating; that reason is on full display this week — an inability to move quickly when the country demands it. A pandemic aid bill will pass, but not quite yet, which means people who desperately need aid may not get it before Christmas.
A $900 BILLION PACKAGE OF ASSISTANCE is finally coming into focus. Fed Chairman Jerome Powell and many economists believe it isn’t enough, but it’s more generous than we anticipated earlier this week. There will be government checks of $600 or $700, plus unemployment benefits of $300 per week.
OTHER KEY PROVISIONS will include about $300 billion for small business, including about $257 for the Payroll Protection Program; $25 billion for rental assistance, including aid for landlords; $80 billion for schools and universities; about $16 billion for vaccine distribution, testing and tracking.
THE MEASURE WILL NOT INCLUDE money for state and local governments, although there’s a drive to “backdoor” aid with $90 billion to the Federal Emergency Management Agency (FEMA). There also isn’t money for liability protection to protect against lawsuits. The need to act on these two issues makes another bill — in February — increasingly likely, especially if jobless benefits expire by early spring, which would necessitate more funding.
THE TIMING OF PASSAGE: It could take a few more days. There could be an announcement as early as today that there’s an agreement in principle, but staffers will have to write legislative language, still not in print after seven months of debate.
IT’S POSSIBLE THAT STILL ANOTHER EXTENSION of several more days will
be necessary for the stimulus and the massive $1.4 trillion budget, which will be
combined. The government will not shut down at 12:01 a.m. on Saturday morning; if
necessary there will be still another extension, perhaps lasting until Monday.
LAST-MINUTE LEGISLATING like this is exasperating, especially as powerful members insert pet provisions into a “must pass” bill. They may provide money for surprise medical bills, New York theater, restaurants, etc. Washington lobbyists will insert other provisions at the last minute.
BOTTOM LINE: The economy will get a badly-needed boost that will arrive by early January. And it’s possible that Biden and Mitch McConnell will agree on another bill that could pass in February. This should keep the economy out of recession during this bleak winter, until vaccines become readily available.
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