A quick dive into the Senate stimulus package

We’re expecting to get the full version of the Senate stimulus bill today, or at least a detailed review of the major components. This may or may not matter in the larger scheme of things since both Nancy Pelosi and Chuck Schumer have pretty much already rejected it without even seeing what’s in it. (More on why that could be a political minefield for them in a moment.) You can read a full rundown of what we’re pretty sure will be in it, along with some economists’ predictions regarding what the missing pieces will be at Forbes this morning. But before that food fight starts in earnest, I wanted to run through a few of the highlights and lowlights.

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The first item to note is that the total cost is expected to come in at roughly one trillion dollars. That would be a staggering and depressing figure were it not for the fact that it looks almost austere compared to the three trillion dollar price tag on the Democrats’ version of the bill currently in the House. We could spend some time carping over this next blow to the national debt and deficit, but clearly nobody in Washington cares about that so I won’t waste my time on it.

Despite some initial hesitation by the Senate GOP, it looks like there will be another $1,200 check for everyone making less than $75K per year. Yes, it would have been nice to see some means testing in there, reserving the checks for those most in need, out of work, etc. But we’re told that any sort of testing would overly complicate the issue so the checks will probably go out the same way they did last time. And what’s another quarter of a trillion dollars between friends under these conditions, right?

There’s also almost certainly going to be some renewal of the federal enhancements to unemployment benefits. Rather than a continuation of the full $600 per week that was previously issued, the GOP seems to be angling toward something more in the range of 200 to 400 dollars per week. Ideally, they could have left it at 600 but with a cap imposed when the amount reaches some significant percentage of the unemployed worker’s previous wages. But, again, we’re being told that’s “too complicated” to figure out.

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This one is a particularly thorny problem for Pelosi and Schumer. If they balk at the offer and insist on the full $600, who will unemployed workers blame when the federal enhancement goes to zero instead of 200 or 400? It won’t be Cocaine Mitch’s fault, folks.

We’re also expecting to see the moratorium on evictions and foreclosures extended through the end of the year or close to it. I wrote about this one a few weeks ago and nothing much has changed since then. This isn’t actually a solution for anything. We’re only kicking the can down the road for a few more months while driving more individual and small-business landlords out of the real estate market and tanking property values. The bill for all of the missed rent is going to come due at some point and the odds suggest that the taxpayers will be left holding the bag yet again.

We also expect the Senate GOP to include a five-year liability shield for businesses, non-profits, schools, medical providers and professionals. Pelosi and Schumer have already blasted the idea as being a giveaway to “the Republicans’ big business friends.” But that’s a tough line to sell when they’re including schools, charities and healthcare workers. I still don’t understand why this isn’t a no-brainer for both parties. Do people routinely sue their employers if an outbreak of the flu sweeps through the office over the course of the winter? It’s nobody’s fault that the pandemic arrived on our shores except for the Chinese Communist Party. Sue them if you like. Once it was here, it was a disease like any other, only with better PR management.

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The last item we expect to see that I wanted to touch on was the “Return to Work Bonus” program. This would supposedly provide a cash incentive to people who return to their jobs rather than staying home and living off of those fat, federally enhanced unemployment benefits. It kind of rankles me to think that we would actually need to bribe people to take back their old jobs when they’re offered. If you turn down work you were willing to do before, you shouldn’t qualify for unemployment. But this is 2020, so I suppose we’re going to roll with the new normal.

What we need to find out now is whether Pelosi and Schumer will accept this as a starting point and move to negotiate a compromise bill in reconciliation. But they don’t have much time to do that. The House is supposed to go on vacation on Friday with the Senate to follow shortly after that. If everyone who is out of work has to wait until Labor Day before any more action is taken, you can expect a lot of grumbling around the country.

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