What happened to the second $1200 stimulus check you were hearing about? A familiar story is playing out in Washington DC. The Democrats are blaming the lack of new stimulus on the Republicans, and the Republicans are pointing their fingers back at the Democrats. But which party is really to blame? Or is it just President Trump’s fault? Why, after five months of negotiations, have the two sides been unable to bridge their differences in this dire time of need?
The Democrats passed their stimulus bill in the House back in May. Their bill, called the HEROES act, weighed in at an immense $3.4 Trillion, but was not taken up in the Senate. Mitch McConnell, Senate Majority leader, stated that the bill is simply too expensive. For their part, the GOP did introduce their own stimulus bill in the Senate in July, and it clocked in at a more modest $1.1 Trillion, but they were unable to pass it due to Democratic opposition in the Senate.
To break the impasse, in early August, Pelosi stated that she would accept a smaller $2.4 Trillion stimulus, but it wasn’t until early September that Mitch McConnell revised his offer to $1.3 Trillion. Since then, the Democrats have successfully passed a revised HEROES act in the House, worth an even smaller $2.2 Trillion, while the Trump administration has offered up to $1.8 Trillion, despite opposition from many in the GOP.
Where it Stands
The dollar figures have gotten tantalizingly close, but that last $400 billion may be impossible to bridge. The Senate Republicans are refusing to take up any stimulus larger than the $1.8 Trillion offer made by President Trump. Meanwhile, key differences remain besides the total price tag. There is still disagreement on Covid-19 testing, unemployment insurance, and funding for state and local governments. That said, it is worth noting that the GOP has caved to Democratic demands on multiple fronts, but Pelosi continues to hold out for additional Republican concessions.
Why is Pelosi holding out while millions of Americans are in desperate need of another stimulus? Pelosi (correctly) believes that she has the upper hand in bargaining. Current election projections have Democrats retaining control of the House, a good chance of capturing the Senate, and a very good chance of winning the Presidency. In other words, Pelosi believes that if the GOP doesn’t accept her terms now, she can get those terms (and more) later on.
The problem is, there is no guarantee that Pelosi’s gamble will pay off, and her strategy is incredibly risky. After the election, if Trump loses, there is no assurance that he will be willing to work with the Democrats on anything. He could spend months challenging the election entirely. In such a scenario, the earliest that a new stimulus could be taken up in Congress is probably February, 2021. But even that comes with risks: the GOP, after authorizing unprecedented spending and tax cuts during the Trump years (blowing up the deficit, before the pandemic), is now gearing up for hard austerity to uncut a Biden Presidency.
Further, by that time, millions of job losses that the stimulus was supposed to prevent, will likely have become permanent and the effectiveness of the stimulus will be have been greatly diminished.
So…Who is to Blame?
The answer is: Yes. in fact, both sides are to blame for a lack of stimulus. Both sides are playing a dysfunctional and childish game of chicken with the American people’s future. That said, a $1.8 Trillion stimulus is huge, and although it might be imperfect, it is more that twice the size of the 2009 American Recovery and Reinvestment Act that helped us out of the Great Recession. Pelosi should take this offer and get it done for the good of America. Time is running out.