This week, Congress approved a one-week extension in funding for the federal government, averting a government shutdown and giving lawmakers more time to negotiate on a spending bill and an economic stimulus. Even with the one-week extension, time is running out for Congress to hammer out a deal that both sides agree with, ensure its passage in both chambers, and guarantee it is signed by President Trump. At this point, House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell aren’t even negotiating, and instead are trading blame.
The $908 billion proposal that has been advanced by a group of bipartisan senators is the most reasonable proposal that exists. To be sure, the bill is not perfect, and more aid will arguably be needed in January when President-Elect Joe Biden, who has urged the passage of this deal as a “starting point,” takes office. However, the bill represents a compromise between what Democrats and Republicans initially wanted, and its passage is absolutely essential for two reasons.
First and foremost, the American people urgently need additional economic relief amid a devastating pandemic that has claimed the lives of more than 285,000 Americans, led to millions of job losses, and thousands of business closures. Millions of Americans are jobless, hungry, or delinquent on rent and mortgage payments, and are looking to their elected officials for assistance.
As the New York Times editorial board noted earlier this week, 12 million Americans will see their federal unemployment benefits end later this month. Further, 6 percent of homeowners and 16 percent of renters are behind on their rent or mortgage payments, and the number of small businesses was nearly 30 percent percent lower in November than at the beginning of 2020. These are shocking statistics, and will grow even more dire unless lawmakers from both parties pass a spending bill and an economic stimulus in the next week.
The second reason the bill’s passage is critical is that it is necessary for our financial markets to have confidence in our government. On Wednesday, after McConnell balked at the proposal and put the passage of a stimulus deal even further out of reach, the stock market fell. On Friday, after prospects of the compromise passing all but collapsed, futures tied to the Dow Jones, S&P 500, and Nasdaq fell 0.4 percent.
While the compromise bill is not perfect, it is a reasonable compromise between what Democrats and Republicans initially wanted. The bill includes some pandemic-related liability protections for businesses, a key Republican sticking point, in exchange for $160 billion for states and localities, which is slightly lower than what Democrats initially wanted.
Notably, the agreement injects much-needed funds into programs to boost unemployment benefits, help struggling small businesses, give healthcare workers relief, and provide educational institutions and providers with the funding they need. Indeed, the plan specifies $300 per week in federal supplemental benefits for five months, as well as an extension of key federal pandemic unemployment programs that are set to expire at the end of the month.
The bill would provide some relief to small businesses, sending $300 billion in funding that would allow struggling businesses to take out more forgivable Paycheck Protection Program loans. The bill would also allow for business expenses that were paid for with these loans to be deducted. The proposal also extends the federal eviction moratorium, and provides $25 billion in rental assistance. Further, $82 billion in funds would go to education, $35 billion would go to health care workers, and $16 billion would go to vaccine distribution as well as coronavirus testing and contact tracing.
Though Pelosi indicated a willingness to accept the bill after Biden voiced his approval, McConnell has his heels dug in, and has refused to back the $908 billion proposal. He has instead urged Congress to pass his own package, and insisted that most Republicans were not on board with the compromise. McConnell’s narrow legislation of about $500 billion represents a backward step in stimulus talks, as it does not include any additional federal unemployment benefits or direct payments at a time when Americans desperately need them.
The window for partisan stalemate has closed, and the time for a deal is now. I implore our elected officials to take immediate action, bring this $908 billion compromise to a vote, and give the economy and Americans the assistance they desperately need.