Stalemate: Congressional Standstill over a New Coronavirus Stimulus Bill

About the Author: Will Jackson is a first year law student at American University- Washington College of Law. Will graduated from the University of Maryland- College Park and hopes to either work on the Hill or in private practice after graduating law school. 

In March of this year–6 months and a lifetime ago–Congress passed one of the most expensive pieces of legislation in U.S. History: the CARES Act. Despite its $2.2 trillion price tag, the coronavirus stimulus package moved through both chambers facing surprisingly little resistance; its final version arrived at the White House without a single “Nay” against it. [[1]] For a moment, many Americans hoped what was a historically unproductive, polarized Congress might actually come together to protect its constituents against the economic threats imposed by the pandemic. This hope was short lived. Enhanced unemployment benefits, loans for the Paycheck Protection Program (PPP), and the federal moratorium on evictions have run their courses without extension. [[2]] [[3]] The original CARES Act remains the only federal coronavirus relief successfully passed by Congress, despite subsequent proposals from both Democrats and Republicans to expand upon or renew the provisions of CARES, all while many Americans struggle to pay their everyday expenses due to the economic downturn. Why the stalemate?

Two opposing pieces of legislation have emerged in the wake of CARES: the $3 trillion Democrat-backed HEROES Act and the $1 trillion Republican-supported HEALS Act. The original HEROES bill, introduced in the House, would renew most initial programs set forth in CARES. The bill would mail an additional $1200 stimulus check to eligible individuals and dependents, but also set aside funding to support hazard pay for essential workers, extend the federal eviction moratorium, and suspend payments on student loans, among other measures. [[4]] [[5]] On the other side of the aisle, HEALS would cut back on or remove funding for many CARES initiatives. While the bill would also provide for another stimulus check, it would limit federal support for unemployment insurance and allocate fewer funds to PPP loans to support small businesses. [[6]] [[7]] HEROES passed the House on a nine-vote margin, but neither it nor its Republican counterpart have seen a vote in the Senate. [[8]]

Through the summer months, bargaining between party leadership yielded no results; neither side was willing to move from its original position or grant any concessions. [[9]] Such a deadlock feels strange given the fact that CARES, whose $2.2 trillion size split the difference between HEALS and HEROES, passed Congress unanimously in a matter of weeks. [[10]] Now, it seems that both Democrats and Republicans have both chosen the next coronavirus stimulus as a hill to die on, regardless of the continued damage the pandemic has on the economy and public health. Are the policy differences between CARES and the new partisan bills so distinct that there cannot be a middle ground? The vast majority–72% in one poll–of American voters support an additional $2 trillion stimulus bill. [[11]] Some individual lawmakers and moderate coalitions, such as the centrist New Democrats, have pushed for separate legislation that would cover basic stimulus now, such as an additional stimulus check, and leave the more contested policies for later debate. [[12]] However, such efforts have been stifled by party leadership.

As the next Congressional recess approaches, Congress runs the risk of failing to pass any follow-up to CARES until after the election in November. While Speaker Nancy Pelosi has suggested a new, smaller $2.4 trillion package–on par with the size of CARES–this may still not be a large enough cut to get Republicans on board. [[13]] On October 9, the Trump administration announced it would agree to a $1.8 trillion deal, even after President Trump declared he would cease negotiations until after the election earlier in the week. [[14]] [[15]] However, even if Ms. Pelosi concedes to this figure and enough Democrats get on board, Senate Majority Leader Mitch McConnell claims that disputes between Republican caucuses would prevent a bill from being passed prior to the recess. [[16]] As the 2020 election approaches, it seems unlikely that the standoff over stimulus will pay off politically on either side. A recession looms that will hit the most vulnerable Americans the hardest, as unemployment remains high and small businesses continue to shutter. [[17]] In 2009, Congress responded quickly to the financial crash with a large stimulus package, but then backed away from fiscal efforts, leaving the economy to dig itself out of the worst of the Great Recession on its own. [[18]] Many high-profile economists believe that additional stimulus during this period could have shortened the recession by years; they believe Congress is making the same mistake this year in response to the coronavirus. [[19]] In order to mitigate this crisis, the game of chicken being played by Congress over stimulus has to end now. The well-being of millions of Americans, for years to come, depends on immediate action.

 

[1] John Bresnahan & Marianne Levine, How Politics, Personalities and Price Tags Derailed Covid Relief Talks, Politico (Aug. 7, 2020, 9:33 PM),

https://www.politico.com/news/2020/08/07/what-derailed-coronavirus-relief-talks-392620.

[2] Sara Hanson, Eviction Bans, $600 Unemployment Payments, and Student Loan Forbearance: Here’s When the Key Benefits of the CARES Act Expire, Forbes (Jul. 24, 2020, 9:54 AM), https://www.forbes.com/sites/sarahhansen/2020/07/24/eviction-bans-600-unemployment-payments-and-student-loan-forbearance-heres-when-the-key-benefits-of-the-cares-act-expire/#80f55dd4ccd2.

[3] Robin Saks Frankel, The PPP Has Expired: Here’s What Small Businesses Can Expect in the Second Stimulus, Forbes (Aug., 11, 2020, 4:24 PM), https://www.forbes.com/sites/advisor/2020/08/11/the-ppp-has-expired-heres-what-small-businesses-can-expect-in-the-second-stimulus/#74c55112523c.

[4] Ella Nilsen & Li Zhou, Democrats’ $3 Trillion Opening Bid for the Next Stimulus Package, Explained, Vox (May 12, 2020, 1:50 PM),

https://www.vox.com/2020/5/12/21254397/next-coronavirus-stimulus-package-democrats-heroes-act.

[5] Dale Smith et al., Stimulus Package: How the New Heroes Act Compares to the CARES Act from March, CNET (Oct. 5, 2020, 8:52 AM), https://www.cnet.com/personal-finance/stimulus-package-how-the-new-heroes-act-compares-to-the-cares-act-from-march/.

[6] Li Zhou, Senate Republicans Have a New Stimulus Bill. Here’s What’s in It, Vox (Jul. 27, 2020, 6:00 PM), https://www.vox.com/2020/7/27/21340169/senate-republicans-stimulus-heals-act-unemployment-insurance-coronavirus.

[7] Smith, supra.

[8] Heroes Act, H.R. 6800, 116th Cong. (2020).

[9] Breshanan, supra.

[10] Id.

[11] Biden Leads Trump 49-41% Among Likely Voters Nationally, Siena College Research Institute (Sep. 27, 2020), https://scri.siena.edu/2020/09/27/biden-leads-trump-49-41-among-likely-voters-nationally/.

[12]  Heather Caygle et al., Pelosi Faces Growing Democratic Unrest over Covid Relief, Politico (Sept. 15, 2020, 11:40 AM), https://www.politico.com/news/2020/09/15/nancy-pelosi-house-coronavirus-deal-415112.

[13] Jacob Pramuk, House Democrats Prepare New $2.4 Trillion Stimulus Plan with Unemployment Aid, Direct Payments, CNBC (Sep. 24, 2020, 3:16 PM), https://www.cnbc.com/2020/09/24/coronavirus-stimulus-democrats-prepare-new-relief-bill.html.

[14] Phil Mattingly & Ted Barrett, Stimulus Negotiations: Trump Signs Off on a $1.8 Trillion Counter Offer to Pelosi, CNN (Oct. 9, 2020, 1:10 PM), https://www.cnn.com/2020/10/09/politics/stimulus-negotiations-latest/index.html.

[15] Matthew Yglesias, Trump’s Confusing Back-and-Forth on Fiscal Stimulus, Sort of Explained, Vox (Oct. 7, 2020, 12:50 PM), https://www.vox.com/21505697/trump-stimulus-tweets.

[16] Id.

[17] Greg Iacurci, Coronavirus Recession Ends for the Rich but is Far from Over for Lower-Income Communities, CNBC (Sep. 20, 2020, 9:00 AM), https://www.cnbc.com/2020/09/20/coronavirus-recession-ends-for-rich-crisis-persists-for-others.html.

[18] Ben Casselman & Jeanna Smialek, Why the U.S. Risks Repeating 2009’s Economic Stimulus Mistakes, N.Y. Times (Sep. 24, 2020), https://www.nytimes.com/2020/09/24/business/economy/us-economy-pandemic.html.

[19] Id.

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