Congress Finally May Act; Public Worries About Ending Lockdown too Soon
Author: Greg Valliere
April 20, 2020
AFTER WASTING TWO WEEKS, Congress is about to be shamed into voting for more coronavirus aid. But even this breakthrough may be stalled by arcane voting rules that could delay passage for a few more days.
THE BIG WINNER will be small businesses, which are set to get another $310 billion in aid, with $75 billion going to hospitals, $25 billion for testing, and $60 billion for an economic injury loan program, which quickly ran out of money earlier this month. The big loser apparently will be state and local governments — especially smaller cities and counties — that will have to wait until another bill moves this summer.
THIS WEEK’S BILL could be enacted into law by Wednesday, according to Treasury Secretary Mnuchin, but to use the operative word this spring — that’s aspirational. There’s a high likelihood of dissenting votes, especially in the House, so lawmakers will have to trudge back to Washington for floor votes. Enactment may not come until Friday, not a minute soon for small businesses.
THEN THE FOCUS WILL SHIFT to the next bill; state and local governments will need at least $250 billion, despite growing GOP opposition. Donald Trump will push the Republicans to do more, and they will — grudgingly — even as this year’s deficit approaches $4 trillion.
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LIKE A PUPPY WATCHING as you toss a ball in the air, the media is magnetically
attracted to protests — good visuals, conflict, maybe even a fight! So the press has
been breathlessly covering demonstrations protesting the lockdown, even though some protests have barely attracted 100 people.
THE MORE IMPORTANT NEWS is that the public rejects calls to re-open the economy quickly. An NBC-Wall Street Journal poll this weekend showed that 58% of the public is worried that the economy will get opened up too soon, while 32% are worried that it may take too long. The noisy protesters do not reflect the country’s mood — yet.
AS WE PREDICTED LAST FRIDAY, Trump is tossing the issue of opening up the economy to governors, and he’s happy to egg on protesters and blame governors if things don’t go well. Friction between him and governors is almost certain to increase, especially over the issue of testing and the availability of swabs.
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AS A NEW WEEK BEGINS, several themes are emerging: the horrible human toll is leveling off but is far from over; the antipathy toward China is intensifying; the political rhetoric will heat up; monetary and fiscal policy will remain extraordinarily
stimulative; the financial markets will remain volatile; a vaccine is still a year away; social distancing may begin to waver.
THE BIGGEST RISK OF ALL is the threat of a “second wave” as people flock to beaches and governors cave in; a rift will widen between scientists and some politicians. Much of America will be open by June, but clusters of infections will persist. One thing seems certain: life will not return to normal — testing, tracking, face masks, social distancing and hand sanitizers are here to stay.
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