Nancy Pelosi says Democrats opted against putting federal aid on autopilot in their $3 trillion coronavirus spending package to avoid amplifying sticker shock
Pelosi said Democrats had decided against putting federal aid on autopilot to avoid increasing the sticker shock of their $3 trillion coronavirus spending package. Tying federal aid to economic conditions and putting so-called automatic stabilizers in place has gained traction among many left-leaning economists. Some Democrats have already called for stabilizers, but it was left out of the House plan that's set to pass on Friday. Visit Business Insider's homepage for more stories.
House Speaker Nancy Pelosi said on Thursday that Democrats had decided against putting federal aid on autopilot to avoid heightening sticker shock in their $3 trillion coronavirus spending package. During her weekly press conference, Pelosi said while she supported the idea of federal aid that automatically kicks in as economic conditions deteriorate, it would lead to a heftier price tag for the proposal. "What I know, many years an appropriator and in leadership, do not realize because we have never spoken in these big terms before, is that if you have a stabilizer in it that something will happen next January and then you'll have $400 billion, $500 billion worth of unemployment checks going out, it counts in the bill today," she said. She went on, and mentioned the role of the Congressional Budget Office in projecting the cost of legislative spending packages. "Why would it? It doesn't happen, and it might not ever happen. God willing, we won't have that high unemployment rate," Pelosi said. "But the CBO, if you say, people are still hungry by such and such, we want to double SNAP after the first of the year, they count it today." Pelosi appeared to say Democrats were looking for other ways to embark on spending initiatives without being counteracted. "We want to look and see what our legislative, constitutional and other prerogatives might be to give us more latitude to prepare, even though not spend in the moment, but not have it count in the moment, but I... was disappointed to learn that we just couldn't go to that place," she said. When reached for comment, a spokesperson for Pelosi pointed Business Insider back to her Thursday remarks. Some progressives expressed anxiety over the remarks. Mike Konczal, the director of progressive thought at the Roosevelt Institute, a left-leaning think-tank, said Democrats could be scaling back their ambitions out of confusion. "I often think Dems hide behind CBO as an excuse to not have to actually use their power to progressive ends," he wrote in a tweet. "But with this I worry they're actually scared and confused on how to stand up for what they need to do." David Kamin, a former economic advisor to President Barack Obama, said Democrats shouldn't have been easily frightened over the high cost of providing economic relief. "The CBO estimate that apparently scared the Dem caucus from embracing auto stabilizers really should've done the opposite. It's a reflection of need," Kamin said in a tweet. "The whole idea is to design policy that auto adjusts for circumstances. The estimate says: likely massive need." The idea of tying federal aid to economic conditions — known as automatic stabilizers — has gained traction among many economists, particularly those leaning liberal, The New York Times reported. Putting stabilizers in place means that government aid like increased state funding and enhanced unemployment insurance automatically jumpstarts when the economy craters. Then, the flow of federal help would scale back to normal levels once the nation's economic health is restored. Many experts say it's an effective way to respond to an economic crisis as it removes the need for congressional action, saving time and resources. Three Democrats released a draft framework earlier this month to include stabilizers in the coronavirus spending package. Rep. Don Beyer and Sens. Jack Reed and Michael Bennet called for connecting unemployment insurance payments to the state of the recovery. "This pandemic and the resulting economic crisis may continue to inflict horrifying suffering on the country for many months to come," Beyer said in a press release at the time. "Passing emergency relief legislation that incorporates automatic triggers would have the enormous benefit of ensuring assistance continues to flow to workers even if Congress itself is unable or unwilling to act." But stabilizers were ultimately left out of the House plan. The legislation instead keeps enhanced unemployment benefits in place through January 31 and extends $1 trillion in aid to states and municipal governments. It passed the House on Friday, and Beyer was among the 207 Democrats unanimously voting for it. Republicans staunchly oppose the Democratic proposal, attacking it as a costly progressive wish list that's dead on arrival at the GOP-held Senate. But they have not offered an alternative plan yet, and say there is no rush to construct another large spending package. With unemployment rising to levels unseen since the Great Depression, the devastating economic effects of the pandemic are expected to linger for the next few years. The Congressional Budget Office projects the unemployment rate could stay as high as 10% through 2021. As a result, policymakers are increasingly calling for aggressive government action. Federal Reserve Chair Jerome Powell issued a dire warning of a painful economic recovery if lawmakers don't pass more relief measures.
"Additional fiscal support could be costly but worth it if it helps avoid long-term economic damage and leaves us with a stronger recovery," Powell said on Wednesday.
Jason Furman, formerly a top economic advisor to Obama, previously told Business Insider that the economy could "easily absorb" up to $5 trillion in extra borrowing to weather the fallout.Join the conversation about this story » NOW WATCH: Pathologists debunk 13 coronavirus myths
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Democrats and Republicans rip into the White House's $1.8 trillion stimulus offer, dampening chances of $1,200 stimulus checks and coronavirus relief before the election
Summary List Placement The Trump administration's $1.8 trillion stimulus offer is receiving significant backlash from both...Summary List Placement The Trump administration's $1.8 trillion stimulus offer is receiving significant backlash from both Democrats and Senate Republicans, dampening the odds of a government rescue package to keep individuals and businesses afloat ahead of the election. In a letter to her caucus on Saturday, Speaker Nancy Pelosi called the plan "insufficient" and said it amounted to "one step forward, two steps back." She listed several concerns with the White House's proposal, including on state and local aid, unemployment benefits, and child care. "When the President talks about wanting a bigger relief package, his proposal appears to mean that he wants more money at his discretion to grant or withhold," Pelosi wrote in the letter, adding she remained "hopeful" for a final deal. Pelosi said Democrats will continue pushing for more funding and details from the administration. They're insisting on $2.2 trillion in further stimulus spending and the Democratic-led House approved an economic aid plan earlier this month. Negotiations between both sides are continuing this weekend. Senate Republicans also assailed the offer in a conference call with Treasury Secretary Steven Mnuchin and White House chief of staff Mark Meadows on Saturday morning for both its spending levels and certain measures, per sources briefed on the call, Politico reported. Sen. Lamar Alexander of Tennessee said "there's no appetite right now to spend the White House number or the House number." Read more: A $2.5 billion investment chief highlights the stock-market sectors poised to benefit the most if stimulus is passed after the election — and says Trump ending negotiations doesn't threaten the economic recovery Then Sen. John Barrasso of Wyoming warned that backing relief legislation widening the reach of the Affordable Care Act will be viewed as "an enormous betrayal by our supporters." Republicans are concerned the administration's plan includes a Democratic demand of an ACA tax credit expansion which could lead to taxpayer funding of abortions. Democrats challenge the characterization. "I don't get it," said Sen. Rick Scott of Florida about the plan's large price tag. He has also long been critical of providing state and local governments with federal aid as they grapple with large budget shortfalls. The White House did not immediately respond to a request for comment. The fierce criticism from Republicans and Democrats comes after the Trump administration increased its stimulus offer to $1.8 trillion, the largest one yet in a volatile stretch of talks with Democrats. President Donald Trump is renewing efforts to secure a deal on coronavirus relief only days after abruptly cutting off talks in a bid to boost his reelection odds. Read more: EXCLUSIVE: Trump's White House policy chief spells out a 2nd-term agenda, including what would happen to taxes, drug prices, and manufacturing jobs The White House plan contains $1,200 direct payments, $400 weekly federal unemployment benefits, $300 billion in aid to state and local governments, and funds for virus testing and tracing. Yet the prospects of an economic aid package ahead of the election are diminishing, given the wide rifts between both parties on numerous measures like state aid and unemployment benefits. Senate Majority Leader Mitch McConnell was cool to the odds of additional federal aid, saying on Thursday it was unlikely before Election Day. The attacks underscore the obstacles facing a possible deal brokered between Pelosi and Mnuchin in on-again, off-again negotiations — particularly in gaining support from Senate Republicans. "The overall price tag matters a lot to conservatives. But just as important is the contents of the spending," Stephen Moore, an outside economic advisor to the White House, told Business Insider. "The contents make all the difference in the world." Some Republican senators are critical of supporting relief spending that grows the national debt. But many economists are urging Congress to renew and approve federal aid programs as millions of Americans remain unemployed and the economy shows signs of weakening. Republicans are gearing up to start the Supreme Court nomination process of Judge Amy Coney Barrett on Monday. Read more: BlackRock's investment chief breaks down why Congress passing a second round of fiscal stimulus is 'quite serious' for markets and the economy — and pinpoints which sectors will benefit in either scenarioJoin the conversation about this story » NOW WATCH: What makes 'Parasite' so shocking is the twist that happens in a 10-minute sequence
The Trump administration makes a $1.8 trillion stimulus offer to Democrats, which includes $400 federal unemployment benefits and $1,200 direct payments
Summary List PlacementThe Trump administration on Friday made a $1.8 trillion stimulus offer to Democrats on...Summary List PlacementThe Trump administration on Friday made a $1.8 trillion stimulus offer to Democrats on Friday, the largest one yet in fluid negotiations with House Speaker Nancy Pelosi. But she rebuffed it by saying it didn't provide a fuller strategy for COVID-19 testing and tracing. The White House is renewing an aggressive push to pass a government rescue package before the election, only three days after the president ended the talks and sparked criticism from some Republicans — a stark reversal in a turbulent stretch of on-again, off-again talks. Democrats, however, did not appear eager to accept the administration's offer, which was an increase from $1.6 trillion they rejected as too paltry. "Of special concern, is the absence of an agreement on a strategic plan to crush the virus," Pelosi spokesman Drew Hammill wrote on Twitter after Pelosi spoke with Treasury Secretary Steven Mnuchin on Friday. He went on: "For this and other provisions, we are still awaiting language from the administration as negotiations on the overall funding amount continue." Trump favors a broad economic aid package. He suggested during a radio interview earlier on Friday he could support a stimulus plan bigger than the $2.2 trillion amount Democrats are seeking. He also wrote on Twitter that the aid package should "Go Big". Covid Relief Negotiations are moving along. Go Big! — Donald J. Trump (@realDonaldTrump) October 9, 2020 The package contains numerous measures to provide more government assistance to individuals and businesses, per The Washington Post, citing two people familiar with the plan. The plan repurposed nearly $400 billion in unspent relief funds from the spring to offset part of the price tag, bringing overall new spending to $1.5 trillion. Some of the provisions include: $1,200 direct payments to adults plus $1,000 for each dependent child. $400 weekly federal unemployment benefits (end date unclear). $300 billion in aid to state and local governments. $75 billion for coronavirus testing and tracing. The proposal increases the amount of aid to states by $50 billion. The stimulus check provision also bumps the amount for children to $1,000 instead of the $500 provided under the CARES Act in March. The offer caps a volatile week in stimulus negotiations. Talks between Mnuchin and Pelosi veered in recent days from considering a standalone rescue bill for airlines to cutting a deal on a big government rescue package. But Trump's demands for a larger package collide with the economic disposition of many Republicans. Many GOP senators opposed a $1 trillion spending plan that Senate Majority Leader Mitch McConnell and other Republicans introduced earlier this summer, citing concern over the growing federal debt. There was similar GOP opposition to a "skinny" stimulus plan, which Democrats ultimately blocked last month. "I've got a significant percentage of my members who think we've done enough and who are alarmed by the amount of national debt," Senate Majority Leader Mitch McConnell said at a campaign event in Kentucky on Thursday. He was cool on the prospect of passing a stimulus package before the election on Friday, given the ongoing Supreme Court nomination process of Judge Amy Coney Barrett. Meanwhile, Pelosi said on MSNBC that Trump's about-face was prompted by stocks sliding earlier in the week. "He got a terrible backlash from it, including in the stock market, which is what he cares about," she said. "And so then he started to come back little by little, and now a bigger package." Experts say sectors of the economy are slowing down. Nearly a dozen major companies are moving ahead with at least 75,000 layoffs if the federal government doesn't provide further relief. Unemployment claims have regularly topped 800,000 for almost every week since early August, far above pre-pandemic levels. In addition, the latest jobs report showed the economy regained 661,000 jobs, a sharp drop compared to the past three months. The US still hasn't recovered half the jobs it lost in March and April. Lawmakers authorized nearly $3 trillion in federal spending as the pandemic crashed into the economy, causing a colossal amount of job losses and small business failures. Many economists across the political spectrum are urging Congress to approve more government spending to battle the pandemic and keep individuals and businesses afloat. "I'm always concerned about the level of debt, but on this one, I'll say we're at war with this virus," Bill Hoagland, a senior vice president at the Bipartisan Policy Center and former Republican staff director for the Senate Budget Committee, told Business Insider. "With low interest rates, you fight this with all the resources you have." A new analysis released Friday from the Brookings Institution indicated a $2 trillion stimulus package would restore the nation's economic activity to pre-pandemic levels by the middle of next year.Join the conversation about this story » NOW WATCH: We tested a machine that brews beer at the push of a button
Trump calls off stimulus package talks, meaning Americans likely won't receive a $1,200 stimulus checks before the election
Summary List Placement Americans will not receive any additional economic relief — neither stimulus checks nor...Summary List Placement Americans will not receive any additional economic relief — neither stimulus checks nor expanded unemployment benefits — until at least after the November election, US President Donald Trump announced in a social media post on Tuesday. Insisting that Democrats only want to "bailout poorly run, high crime, Democrat states," Trump said on Twitter that he would no longer negotiate with them over another stimulus package. Indeed, he insisted that the economy is "doing very well," despite there being 10.7 million fewer jobs today than there were six months ago, and said he would pivot instead to confirming his nominee Amy Coney Barrett to the Supreme Court. On October 1, the Democrat-led House of Representatives passed a $2.2 trillion coronavirus relief package that included a second round of $1,200 stimulus checks for every American, with parents eligible to receive another $1,200 for each dependent child. The bill also proposed an additional $600 in federal unemployment benefits and $436 billion in aid for state and local governments to help cover the cost of providing assistance to out-of-work Americans. The Democrats' plan would have also revived the Paycheck Protection Program, providing cash infusions to small businesses to help keep employees on the payroll. Democrats had passed a $3 trillion stimulus bill in May, but Senate Republicans and White House negotiators balked at the price tag, and the two sides were unable to reach a deal. A $700 million proposal unveiled by Senate Majority Leader Mitch McConnell eliminated the $1,200 stimulus checks and cut expanded unemployment benefits in half, providing an additional $300 a week through the end of the year. It would also have revived the Paycheck Protection Program, with about half the measure's funding coming from the first stimulus package enacted into law this spring. Democrats, for their part, disparaged the GOP proposal as entirely too meager. US Treasury Secretary Steve Mnuchin, in negotiations with House Speaker Nancy Pelosi, had backed the idea of another round of $1,200 stimulus checks, and the White House said it would back a deal of up to $1.6 trillion. But those talks have now been called off, a decision criticized by Democrats and some vulnerable Republicans. "Waiting until after the election to reach an agreement on the next COVID-19 relief package is a huge mistake," Sen. Susan Collins, a Maine Republican up for reelection in November, said Tuesday. Former Vice President Joe Biden, in a statement, said the president's tweets were indicative of his lack of concern for average Americans. "Make no mistake: if you are out of work, if your business is closed, if your child's school is shut down, if you are seeing layoffs in your community, Donald Trump decided today that none of that — none of it — matters to him," Biden said. "There will be no help from Washington for the foreseeable future." In a series of late-night tweets, Trump appeared to respond to the negative coverage, issuing ultimatums in lieu of negotiations. In one, the president said Congress should pass an airline bailout and approve additional money for small businesses, using money already approriated for the first stimulus package. Some 20 minutes later, he also declared that he would sign a "Stand Alone Bill for Stimulus Checks." Democrats have consistently rejected such piecemeal stimulus efforts. "Let's not have a skinny bill when we have a massive problem," Pelosi said last month. Have a news tip? Email this reporter: firstname.lastname@example.orgJoin the conversation about this story » NOW WATCH: Inside London during COVID-19 lockdown