Stimulus Deal Nears Agreement
Dear Rich Lifer,
It was a long night on Tuesday for congressional leaders as stimulus talks convened until 10pm. The bitter stalemate between Democrats and Republicans has resulted in months of failed attempts to reach a deal on a new stimulus plan.
But could the wait finally be over?
The two top Republicans and Democrats in the House and Senate — House Speaker Nancy Pelosi (D., Calif.), Senate Majority Leader Mitch McConnell (R., Ky.), Senate Minority Leader Chuck Schumer (D., N.Y.) and House Minority Leader Kevin McCarthy (R., Calif.) — seemed to leave the Tuesday night talks with optimism.
But don’t take our word for it. Here’s what our leaders had to say for themselves.
From Mr. McConnell: “We’re making significant progress and I’m optimistic that we’re gonna be able to complete an understanding sometime soon.”
Mr. Schumer echoed the sentiment: “We’re exchanging paper and ideas back and forth, making progress and hopefully we can come to an agreement soon.”
Even Speaker Pelosi agreed: “We’re talking about going forward. Tomorrow, we’ll be back early, and we’ll be on schedule to get the job done.”
The meeting between these four powerful leaders marks the first in-person spending talks they have had in months. It seemed to signal a more serious push toward resolving party differences in order to fund the government and provide much needed aid.
Congressional leaders continue to say they plan to attach a coronavirus relief bill to the spending bill that needs to pass before current government funding expires at 12:01am on Saturday, December 19.
There seems to be an agreement that attaching coronavirus relief to the spending bill is crucial and that Congress should not adjourn without approving such a bill.
This only gives leaders a handful of days to come together to finally reach an agreement. So has anything changed in negotiations? Today we explore…
What’s New In This Bill?
The deal is expected to exclude two hot button issues: funding for state and local government, something Democrats had pushed for, and liability protection for businesses and other entities operating during the pandemic, something Republicans had pushed for.
However, leaders are now seriously discussing adding a second round of direct checks, but they may be smaller than the initial rounds of checks that went out, which gave $1,200 to individuals and $500 per dependent.
Other provisions are up in the air, but the bill will likely include an extension of jobless benefits, loans for hard-hit small businesses and money for vaccine distribution. There may also be an extension of the federal eviction moratorium and a deferment of student loan payments.
However, congressional aids noted that because talks are ongoing and no final agreement has been reached, this could change as well.
An Optimistic Timeline
Once the details of the bill are revealed, Hill leaders will attempt to sell the plan to their caucuses and move it through Congress by Friday.
An ideal timeline would include a vote on the bill in the House on Thursday immediately followed by a vote in the Senate on Friday.
However, unanimous consent from all 100 senators is needed to schedule a vote. This basically means that if any senator objects, there will be a temporary government shutdown over the weekend.
Look out for pushback from progressives who are threatening to vote against the bill unless additional stimulus checks are included in the legislation. Independent Senator Bernie Sanders and Republican Senator Josh Hawley have both echoed this sentiment along with Democratic Rep. Alexandria Ocasio-Cortez.
Additionally, in a letter sent to leadership, liberal lawmakers, led by Representatives Pramila Jayapal of Washington and Ro Khanna and Katie Porter, both of California, argued that such payments “are a crucial part of any Covid relief package.”
Retail Is Feeling The Effects
Amidst all these negotiations the real-life effects of the pandemic are being felt across the country by the people the government has sworn to protect.
For the first time since spring, U.S. retail sales have declined, raising questions about the strength of consumer spending and how retailers are faring in the most important holiday shopping season of the year.
According to a report from the Commerce Department, retail sales fell 1.1 percent in November. Spending on automobiles, electronics, clothing, restaurants and bars all declined, surprising many economists who only anticipated a much smaller decrease.
Black Friday was largely a disappointment for retailers, with some companies reporting a 50% decline in in-person shopping due to customer concerns about coronavirus.
People spent an average of just under $312 on holiday-related purchases from Thanksgiving to Cyber Monday, down 14% from 2019, according to a survey by the National Retail Federation and Prosper Insights & Analytics.
“Anywhere there’s crowds people stayed away from,” said Joshua Shapiro, chief U.S. economist at consulting firm Maria Fiorini Ramirez Inc. “It underscores the difficulty here till the vaccine is widely distributed,” he said.
This retail sales report is the most current indicator that the U.S. economic recovery is continuing to slow after the burst of growth seen during the summer.
Most economists agree that a fresh round of government stimulus will be necessary to get the economy through the next few months.
Anthony Dukes, professor of marketing at the University of Southern California Marshall School of Business, expects the economy to suffer until spring of 2021, when demand will likely pick up due to an increase in vaccinations and hopefully the easing of social distancing restrictions.
One thing is for certain, spring can’t come soon enough.
To a Richer Life,
The Rich Life Roadmap Team