Snags and Dissent as Congress Marks Up Massive Bill
Author: Greg Valliere
March 20, 2020
THERE WERE SO MANY MAJOR DEVELOPMENTS in the past 24 hours that the only way we can even skim the surface is to offer the following bullet points:
There were no new local coronavirus cases in China for the second day in a row, that’s the headline.
Aside from the stunning increase of infections in the U.S., the big story as the weekend approaches is a lack of supplies — test kits, swabs, chemical solutions, etc. A nasty “blame game” is likely.
Estimates of new cases are staggering; will half of all Californians really get the virus, despite a lockdown?
Cracks are developing in the junk bond industry; the Wall Street Journal has a sobering article in this morning’s edition.
While there is no imminent breakthrough on a vaccine, use of relatively safe anti-malaria drugs will spike. Donald Trump will demand quick action from FDA on new drugs, but clinical trials will take several months.
Prospects for quick action on a $1 trillion-plus bill have faded as Congress bickers on several key provisions. Enactment is still several days away. The premise hasn’t changed: money is no object — but the details are contentious.
Conservative Republicans are divided on the size of government checks, or whether that’s the best approach.
Democrats resent their exclusion as a Mitch McConnell bill advances. The best summary of his bill is in this morning’s Politico, a free web site that has been excellent lately.
Congress is determined to attach strings on aid to industries like airlines — there will have to be executive pay curbs, no stock buy-backs, etc. Loans are far more likely than outright grants.
Everyone has their own pet issues to attach to this massive bill — student loan forgiveness, unemployment reform, etc. Chuck Schumer is preparing the ultimate Christmas Tree.
Congressional votes will be complicated because many more members are likely to test positive; the concept of what constitutes a quorum will have to change dramatically.
There’s a renewed effort to get Saudi Arabia and Russia to call a truce on oil production; watch this one for a potential breakthrough over the weekend.
A crisis like this requires villains, and there are two — politicians like Sen. Richard Burr (R-N.C.), who bailed out of stocks as he downplayed the virus; and the idiot drunks at beaches, who richly deserve the nation’s scorn.
Donald Trump allowed his famous temper to show yesterday, as he blasted his critics, especially the media. The mood of bipartisanship, seemingly strong on Monday, has faded.
BOTTOM LINE: We still believe massive monetary and fiscal stimulus will lessen the duration and depth of the recession, but that won’t stop the new infections — which will surge this weekend as Congress bickers.
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