Overreach, Political Posturing and Disarray Complicate Stimulus Talks
Despite having five months when Congress and the Trump administration could have negotiated the next phase of pandemic relief legislation, the odds of a stimulus package becoming law before the Nov. 3 elections are very low, and worsening by the minute.
The House, Senate and White House agree on extending the Paycheck Protection Program (PPP), which has helped businesses keep their employees and, to some extent, pay their rent and cover expenses. They also agree on extending enhanced unemployment benefits, although not on the exact amount. There is also a recognition across party lines that certain hard-hit industries of national importance, such as the airline industry, would need additional help to prevent large employee layoffs.
Yet broad agreement in these areas has not been sufficient to overcome the barriers created by the politics of an election year, the legislative overreach and political posturing of the House of Representatives and Senate, and the outright disarray and confusion caused by the Trump administration’s negotiations.
- Overreach: The CARES Act was passed in March with broad bipartisan support. Speaker Nancy Pelosi and House Democrats followed up in May with the HEROES Act, a bill crafted by the Democratic leadership team with no Republican input. The bill was a $2.6 trillion piece of legislation that was criticized by Republicans as a political campaign document, with messaging for Democratic base voters and little chance of being considered in a Republican Senate. If Pelosi thought that this would be taken as an opening bid in negotiations, she misjudged. Senate Republicans and the White House dismissed the package out of hand as a political maneuver and not a good-faith effort to reach a bipartisan deal. Instead, Senate Republicans delayed action until after the August recess, counting on what looked like an improving economy that might mitigate the need for a large stimulus package.
- Political Posturing: In September, with the election approaching and after months of Democrats attacking them for refusing to take up the HEROES Act, Senate Republicans offered their own much smaller legislative package focused on providing enhanced unemployment payments, assistance to schools, continuation of the PPP, and liability protections for reopening businesses. The Senate Republicans’ “skinny bill,” as it was called, garnered 53 votes in the Senate – not enough to overcome the Senate’s 60-vote threshold to prevent a filibuster by Senate Democrats, who mockingly called it an “emaciated bill.” This outcome was hardly a surprise, with the bill being primarily a vehicle to give Senate Republicans, many of whom are in difficult re-election races, a chance to vote for economic assistance. On the House side, Pelosi was under increasing pressure from moderates in her party to move off her insistence on the HEROES Act. As a consequence, House Democrats passed a revised bill on Oct. 1 with a smaller price tag of $2.2 trillion. Like the prior HEROES Act, the smaller bill had little chance of passage in the Senate, but it allowed House Democrats to claim they had moved in the direction of the Trump administration.
- Disarray and Confusion: The path to an agreement was complicated greatly by President Donald Trump’s often contradictory messages. On Tuesday of last week, the president announced that he had ordered his staff to stop negotiating a bill with Democrats, saying he expected to pass a stimulus bill after the elections. Instead, he urged the Senate to focus on confirming his Supreme Court nominee, Amy Coney Barrett. A few days later on Oct. 9, he tweeted “STIMULUS! Go big or go home!!!” Over the weekend, the White House offered a $1.8 trillion package, far above what Senate Republicans had been offering, but seemingly taking their support for granted. On Monday, he said the Senate should skip the Barrett confirmation hearings and move on a stimulus bill. The next day, the White House’s offer was rebuffed by Pelosi, who, in a letter to her caucus, characterized it as “one step forward, two steps back” and saying it “in some instances, makes matters worse.”
Where are we now? The White House is now counting on the Senate to pass a slimmed down version of stimulus legislation that would extend PPP. Senate Majority Leader McConnell on Tuesday announced that the Senate would take up the effort when they reconvened on Oct. 19, saying that unless “Democrats block this aid for workers, we will have time to pass it before we proceed as planned to the pending Supreme Court nomination as soon as it is reported by the Judiciary Committee.” However, Senate Judiciary Committee rules require the Amy Coney Barrett nomination to be voted out of committee next week, with consideration on the full Senate floor scheduled for Oct. 26. The tight time frame would mean that, in order to pass the Senate without a filibuster threat before the election, there would have to be sign-off on a deal among Senate and House leadership and the White House. That prospect grows more unlikely as the election nears.
Aquiles Suarez is Senior Vice President for Government Affairs at NAIOP.
There is also a recognition across party lines that certain hard-hit industries of national importance, such as the airline industry, would need additional help to prevent large employee layoffs.