After several days of brinksmanship with the economy and the markets teetering on the edge of ruin, Democrats and Republicans finally cut a deal. The latest coronavirus relief package will cost two trillion dollars, well north of the GOP’s first proposal but not quite as costly as Nancy Pelosi’s last-minute bid that upended talks this weekend. Mitch McConnell and Chuck Schumer both hailed the agreement as bipartisan, and agreed to speedy passage today:
White House and Senate negotiators announced an agreement early Wednesday morning on a massive financial rescue package designed to curb the economic damage of the COVID-19 pandemic.
“At last, we have a deal,” Senate Majority Leader Mitch McConnell, R-Ky., said on the floor a little after 1:30 a.m. “We’re going to pass this legislation later today.” He said the chamber would convene at noon and take up the underlying vehicle shortly thereafter.
“After five days of arduous negotiations … we have a bipartisan agreement on the largest rescue package in American history,” added Minority Leader Charles E. Schumer, D-N.Y.
While some of the legislative language had yet to be drafted, officials said they expected to circulate a bill Wednesday that would provide cash payments to families, loans to businesses big and small, an expanded social safety net for the jobless and a major cash infusion for the nation’s hospitals. The price tag was expected to hit $2 trillion or more.
What will our great-grandchildren pay for in this bill? Most of the components had emerged over the last several days, but some of the details have changed. Gone, for instance, is the means testing on individual stimulus payments, a condition that even had some conservatives scratching their heads:
The revamped Senate proposal will inject approximately $2 trillion into the economy, providing tax rebates, four months expanded unemployment benefits and a slew of business tax-relief provisions aimed at shoring up individual, family and business finances.
The deal includes $500 billion for a major corporate liquidity program through the Federal Reserve, $367 billion for a small business loan program, $100 billion for hospitals and $150 billion for state and local governments.
It will also give a one-time check of $1,200 to Americans who make up to $75,000. Individuals with no or little tax liability would receive the same amount, unlike the initial GOP proposal that would have given them a minimum of $600.
Note that the deal still doubles that for joint filers who earned below $150,000 in 2018, the test year for the stimulus. As Allahpundit noted, this is a change from the GOP’s approach, which was more of a tax-credit program than stimulus. It reduced payments to the people who are most likely to apply the cash immediately to the economy — the poor — and who most desperately need it. This is more straight-up stimulus and will offer more bang for the buck, economically speaking.
That’s one change that Democrats won the in the battle, plus the four-month unemployment benefit extension. An earlier concession by Republicans on the corporate liquidity program should have been part of the package from the beginning anyway, a transparency/oversight component that will strengthen confidence that this is not another “Wall Street before Main Street” bailout package.
We don’t know all the details of the bill yet, nor whether Pelosi got any of her hobby horse spending into the bill. We do know that Donald Trump will sign the bill, as Steve Mnuchin pledged his approval:
Mr. Mnuchin, preparing to leave Capitol Hill early Wednesday, described the measure to reporters as “a terrific bill.”
“I’ve spoken to the president many times today,” he said, “and he’s very pleased with this legislation and the impact that this is going to have.”
What about the House? It’s not in session at the moment, and some of its members are either quarantining or sheltering in place. Pelosi said she will use unanimous consent to pass the bill by acclamation, but that has one flaw:
The House is in recess, with some of its members sick or in quarantine and concerned about flying back to Washington. Leaders were considering approving the mammoth proposal by unanimous consent, a tactic usually reserved for minor, uncontroversial measures.
“What I’m saying is we want to do it as soon as possible. The best way to do that as soon as possible is to have agreement on the legislation,” said Speaker Nancy Pelosi of California, appearing on CNN. “We’re doing U.C. to make the biggest possible difference in the shortest period of time.”
That’s great if it works. However, all it takes is one member to announce an objection and the bill will have to go through all of the normal voting processes. This isn’t a bill that just renames a post office, after all — it’s the single most significant spending bill they will ever see outside of budgets, and maybe even counting the appropriations process, which actually covers less than half of the federal budget. (The rest is statutory spending, AKA entitlement spending, which is independent of the appropriations process.) In a group of 435 people, are we sure there isn’t one contrarian who will demand more oversight and less rush to spend two trillion dollars? We’ll see soon enough, I guess.