Will there even be a stimulus deal?
Here’s what you need to know.
Just when there was a renewed glimmer of hope for a potential stimulus deal, the candle failed to stay lit. Here are three reasons why a stimulus deal may never happen.
1. Congress can’t agree on a stimulus deal
This is not a typical political disagreement. Initially, Senate Majority Leader Mitch McConnell (R-KY) predicted a stimulus deal would get done in a matter of weeks. That was July. More than three months later, Congress has not agreed on a stimulus package. There are agreements in principle—on second stimulus checks, unemployment benefits, school funding, business loans and state and local aid. However, Democrats and Republicans remain divided on funding amounts. That matters because despite negotiations between Speaker of the House Nancy Pelosi (D-CA) and Treasury Secretary Steven Mnuchin, Pelosi today proceeded to pass her own stimulus bill without bipartisan support. Like Senate Republicans, House Democrats are free to pass their own bill. However, the bill House Democrats passed today—which included no Republicans—does little to advance the ball. If anything, the Democrats’ $2.2 trillion stimulus bill is purely symbolic.
2. It’s unclear whether Senate Republicans even want to support a large stimulus package
Mnuchin may be negotiating a stimulus package on behalf of the White House, but it’s unclear whether Senate Republicans want to support a $1.5 to 2.0 trillion stimulus package. The signs say otherwise. Senate Republicans proposed the Heals Act—a $1 trillion stimulus package—followed by a $500 billion “skinny” stimulus package. There hasn’t been Republican support for a larger bill. If anything, fiscal conservatives want either a smaller bill or no bill at all. They are concerned with further federal spending, which has already surpassed several trillions of dollars from prior stimuli. Ultimately, some Senate Republicans may go along with a stimulus package if Mnuchin and Pelosi reach consensus. However, it may be unwillingly—with many Republicans voting against a large package.
3. Trump may use executive actions for his own stimulus package
If Congress doesn’t agree on a stimulus deal and President Donald Trump decides to act before the November 3 election, it’s possible that he uses executive action to provide some economic stimulus to the American people. While Congress has the power of the purse, the Trump administration may find a creative way to provide at least some more financial aid—within the limits of separation of powers—to individuals and businesses before the election. For example, Trump has issued executive memoranda for student loan relief as well as a payroll tax holiday. While some executive memoranda may be symbolic, others may provide concrete relief.
There are many potential next steps. A stimulus deal could get done next week. A stimulus deal could completely fall apart before the election. Stimulus talks could resume and a bipartisan deal could get done after the election. Senate Republicans could pass their own stimulus bill. Or, Congress could wait until after the election and see what happens. There have been countless starts and stops to a potential stimulus deal, and there is still no guarantee for what comes next. In the meantime, no deal.