“Democratic leaders signaled Wednesday they were prepared to reduce their demands for the next round of coronavirus relief, fueling hopes that an agreement could be reached with Republicans by year’s end to boost struggling businesses and households,” WSJ writes.
The latest talks are centered around a bipartisan $908 billion proposal. It’s a steep decline from the $2.4 trillion bill that had previously passed in the House or the rumored $1.3 trillion Democratic proposal Monday. Still, the latest package “should serve as the starting point for talks to try to resolve months of disagreement with GOP leaders and the White House.”
- President-elect Joe Biden endorsed the plan in a limited capacity, calling it “at best only be a down payment.”
However, Biden said its unlikely bipartisan bill would pass before the end of President Donald Trump’s term, so “it’s now back to square one again.”
- Treasury Secretary Steven Mnuchin said the White House planned to back the GOP’s latest proposal that was released Tuesday. In terms of size, it’s similar to Senate Republican’s previous $519 billion proposal.
The need for additional government aid is growing more urgent, with Covid-19 cases surging and multiple government-relief initiatives set to expire soon. A recent Federal Reserve report also showed slowing economic recovery over the last few months “in parts of the Midwest and Northeast as coronavirus cases proliferated.”
Looking Ahead: Ideally, lawmakers would want to include coronavirus relief in a full-year spending bill. But there’s a ticking clock as few lawmakers are interested in hanging around the capital with Christmastime coming and pre-emptive quarantines needed. A bill may not be ready in time, and a short-term extension might be necessary to continue relief efforts.
It’s surprising that we may get a stimulus bill that’s in the billions and not trillions of dollars. The market wanted more stimulus when the pandemic looked indefinite, but now it looks like we’ll have vaccines by the first quarter of 2020 and the economy can start its reopening next year. So the “light at the end of the tunnel” seems to compensate for the slimmer fiscal support bill.