Here's Why You Didn't Get a Second Stimulus Check

And Who to Blame

So we all heard that it they were coming, yet no second stimulus check came before the end of 2020, what happened? After the hasty passing of the CARES ACT in late March, there have been a number of attempts at providing more stimulus for America. Yet, political polarization in Washington prevented its passing. Here is the stimulus story and why you didn’t get a second check this year.

The Opening Salvo

The story begins with a big bang. In May, the Democrats, led by Speaker Pelosi, passed a massive $3.4 Trillion stimulus package in the House. This bill included the popular stimulus checks, also about $1 Trillion in aid for state and local governments, and $600/week in supplemental unemployment benefits. Called the HEROES ACT, it never made it to the Senate for a vote due to conservative opposition to its massive size.

Instead, the GOP proposed a more modest $1.1 Trillion counteroffer, which also included stimulus checks, but no new money for state and local governments and a reduced $200/week in supplemental unemployment. This package also included a partial liability shield for businesses against Covid-19 lawsuits, a non-starter among Democrats.

In order for the stimulus to pass, the two bills needed to be reconciled in both total cost and provisions. For her part, Pelosi and the Democrats retreated a bit and said that they would consider reducing their plan to $2.4 Trillion in early August, but talks broke down and didn’t resume until September.

Attempts at Compromise

Recognizing that thousands of airline worker would be laid off in early October due to expiring CARES ACT provisions, both Republican and Democrats attempted to reconcile differences again throughout September.

Mitch McConnell pitched a slightly larger $1.3 Trillion stimulus, which included stimulus checks and $300/week in unemployment. Pelosi and the Democrats cut their plan to $2.2 Trillion. Even though the two sides had moved closer together on the final cost, this left a $900 Billion gulf between the two parties, as well as disagreement over unemployment, state and local government funding, and liability provisions.

In the weeks running up the election, President Trump’s administration attempted to break the impasse, pushing a compromise plan of $1.6 Trillion and then a still-larger $1.8 Trillion package. These plans, reportedly, included as much as $300 Billion in state and local government aid, stimulus checks, and $400/week in unemployment benefits. Nancy Pelosi rejected all of these compromises. A decision that she likely regrets.

Separately, Mitch McConnell and the GOP attempted to pass a “skinny” stimulus in the Senate that was much smaller and more targeted to immediate demands. This endeavor, however, was blocked by the Democrats who insisted that the bill must be comprehensive.

The Democrats’s Post Election “Collapse”

After the election, Democrats, now deeply divided after stunning loses in Congress, capitulated. Or as Bernie Sanders described it, they “collapsed.” They quietly pitched a much smaller $1.3 Trillion plan to Mitch McConnell. Details of this plan were never made public, but its size indicates that it was meant to emulate the last offer made by the GOP leadership.

But now, McConnell, his party having won seats in the House, had the upper hand in negotiations and were free from the pressure of an impending election. He apparently refused to budge from the smaller $500 Billion stimulus that he had been attempting to pass since September.

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The Centrist’s Compromise

Recognizing that key protections of the CARES ACT are expiring at the end of 2020, a group of moderate Democrats and Republicans broke the impasse in early December, rolling out a split-the-difference plan at $908 Billion. This plan was quickly endorsed by a beleaguered Pelosi as a starting point for negotiations.

This package is likely small enough to get some Conservative votes in the Senate, while also caving to the GOP’s $300/week unemployment benefits. It still, however, included liability protections which the Democrats abhor, and about $160 Billion in state and local government funding which the GOP is broadly against.

To bridge this gap, Congressional Centrists have proposed that liability protections and state and local government funding, the two most controversial items of business, be removed from the package entirely. This move echos Mitch McConnell’s longstanding of passing a stimulus that is targeted to areas that both parties agree upon. This was a strategy that Democrats had long resisted. Nonetheless, the Democratic leadership appear to have given in on this issue as well.

Essentially, this plan kicks the most controversial issues down the road, to be resolved at a later date, while seeking to pass those areas where there is broad agreement. It remains to be seen if this plan will pass, but crucially, the smaller package frees up some funds for another round of stimulus checks.

So, Who is the Blame?

Both sides are to blame for this unnecessarily drawn-out and partisan negotiation process. But if we are asking the very specific question of who is responsible for your lack of a second stimulus check in 2020, in my estimation the bulk of responsibility rests on Speaker Pelosi.

Prior to the election, Pelosi had stimulus checks, considerable state and local aid, and much of the unemployment benefits she demanded, but she refused to compromise below a $2 Trillion package. At that time, the GOP looked as if it would lose badly in the House and Senate; the GOP desperately needed a win on stimulus.

Pelosi took a gamble that she would have more seats in Congress in January, and she would be able to pass a larger stimulus that more reflected Democratic values. She was mistaken. She is now forced to capitulate key concessions to conservatives, which include unemployment and stimulus checks that would have been significantly larger otherwise. Pelosi’s gamble simply didn’t pay off.

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