Did Nancy Pelosi and Chuck Schumer just drop their COVID-19 relief demand from $2.5 trillion to $908 billion? Not really, no, but they did signal that they’re finally open to some negotiation well south of that range. The media reports that the two Democrats had endorsed the centrist-coalition proposal released yesterday overstated the buy-in that they expressed:
NEW: Pelosi, Schumer express support for compromise COVID-19 relief bill proposed yesterday: "We and others will offer improvements, but the need to act is immediate and we believe that with good-faith negotiations we could come to an agreement." https://t.co/DVuKErWwLp pic.twitter.com/pqyGAUBBFH
— ABC News Politics (@ABCPolitics) December 2, 2020
Contra ABC, Pelosi and Schumer did not “support” the proposal itself as an end product. They support it as “the basis for immediate, bipartisan, bicameral negotiations.” In other words, they want to use it as the road map to discussions. It’s a cinch that both Democrats will insist on more spending in the back-and-forth to come, assuming it does come.
One area in which more spending will almost certainly be demanded is a second round of stimulus checks. As I wrote yesterday, it’s absurd to push a relief bill without direct stimulus as a component. For one thing, all sides agree on the need for it, and for another, selling spending like this without giving direct aid to voters is political malpractice:
This is the problem with centrists, or more accurately, with lawmakers that fall in love with either numbers or dealmaking. Voters whose livelihoods have been curtailed or eliminated altogether want that direct relief. A package that ignores them while putting cash into the hands of “hard-hit transit agencies” will be a political disaster, something that Nancy Pelosi and Donald Trump are smart enough to know.
It’s also pennywise and pound foolish. The second round of stimulus would cost around $500 billion, so it’s not chump change, but it shouldn’t be a dealbreaker. It would put the overall package cost at $1.4 trillion, which is just about the middle ground between the two sides now. Furthermore, there’s significant justification for this kind of stimulus/relief. Savings levels and disposable income have been dropping for months, and in a consumer-activity-oriented economy, that spells disaster. A second round of direct stimulus is warranted to give consumers a bit more confidence heading into a new round of COVID-19 commerce restrictions.
Bet dollars to donuts that Congress doesn’t pass anything without some direct stimulus for voters.
And this is actually good news, even if it’s not an “endorsement.” Pelosi and Schumer have now signaled that they will come down significantly from their earlier demands, which has been the biggest obstacle to the passage of a Phase 4 relief bill. Republicans need to wrap this up as quickly as possible to get funding in place for vaccine distribution, and everyone can go home for the Christmas holiday with a small win in their pocket after all.