Economy

Democrats, Republicans And A Tale Of Two Stimulus Packages

U.S. Congress

The U.S. economy is starting its walk back toward recovery, with all 50 states having publicly issued plans to begin reopening businesses after some eight weeks of closures that have cost nearly 40 million jobs. But a political conflict is building in Washington as Democrats and Republicans push two very different stimulus plans designed to promote a rebound.

The economy is certainly in shaky condition as the recovery get underway. Some 38 million Americans have filed for unemployment benefits since the pandemic began, including 2.4 million who did so in just the past week.

Here’s a look at Democrats’ and Republican’ rival plans to get the U.S. economy back on track:

The Democrats’ $3 Trillion HEROES Act

The Democratic-controlled House last week passed the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act to help the economy. This $3 trillion package aims to push funds to people, localities and institutions hit hard by the COVID-19 pandemic.

Among the act’s more notable features are the extension of a $600 weekly bonus unemployment benefit until next January and a second round of stimulus funds that would go directly to Americans’ bank accounts.

The second stimulus checks would be slightly larger than the first round’s payments of $1,200 for most adults and $600 per child. The new money would include up to $1,200 per household member (adults and children), with a cap of $6,000 per household.

House Speaker Nancy Pelosi (D-Calif.) advocated for the measure in a recorded statement that said the law’s passage would cushion “the economic blow of the coronavirus crisis [by] putting much-needed money in the pockets of the American people.”

She noted that that 30 million-plus Americans who’ve filed for unemployment benefits have pushed the nation’s unemployment rate to a record 14.7 percent.

However, the HEROES Act passed the House on mostly partisan lines, with 14 Democrats voting against the measure and only one Republican favoring it.

House Minority Leader Rep. Kevin McCarthy (R-Calif.) said he saw no need for a new stimulus bill right now, and members of the Republican-controlled Senate that the measure would next have to pass seem if anything even less receptive.

“Let me state the obvious. What Nancy Pelosi is proposing will never pass the Senate,” Sen. John Barrasso, (R-Wyo.) tweeted last week before the House vote.

Republicans Want To Wait, Then Possibly Spend on Infrastructure

The Republican response to the idea of a second stimulus round has largely entailed calling for patience and letting the first multitrillion-dollar appropriation have time to take effect before signing on to another one.

“We need to assess what we’ve already done, take a look at what worked and what didn’t work, and we’ll discuss the way forward in the next couple of weeks,” Senate Majority Leader Mitch McConnell (R-Kentucky) told reporters on Tuesday (May 19) after President Donald Trump spoke at a Senate Republican luncheon.

However, recent reports indicate Republicans are privately signaling that they believe the Senate will have to push further stimulus measures in June as calls for help from consumers and business likely intensify. Some want President Donald Trump to get more involved in negotiating a deal.

As for what a Republican plan might entail, there is reportedly a wide of variety of potential ideas on the table. Sen. Lindsey Graham (R-S.C.) is advocating for a plan that will push more money into improved U.S. infrastructure and away from direct cash payments.

“I want to do infrastructure,” Graham told CNN. “I told Trump: ‘This is the time. We got it teed up. This is the time to go big.’ ... It really is a once-in-a-lifetime opportunity to give a facelift to the country.”

But coalescing around a single proposal might prove difficult for Republicans. Some favor Graham’s large infrastructure plan, while others prefer narrow changes to existing laws. And there’s mounting hostility to the possibility of more cash payments to Americans.

“I’ll do everything I can on my part to stop us from going further in debt by passing out money we don’t have,” said Sen. Rand Paul, a Kentucky Republican.

Others like freshman Sen. Mike Braun (R-Ind.) have said the bulk of Republicans want to wait to see how the reopening of states affects the economy before deciding what stimulus to pass on. “There’s no real urgency," Braun said. “There's no kind of coalescing that I can see.”

But urgency is in the eye of the beholder. Republican Sen. Corey Gardner, who faces a difficult re-election run this fall in Colorado, is advocating for not waiting around.

“We have an opportunity to perfect the Paycheck Protection Program, to pass legislation to help infrastructure, to create stimulus jobs, economic opportunity,” he said. “We should be doing everything we can. We need to get the job done.”

However, any package Republicans pass in the GOP-controlled Senate will need Democratic approval to gain passage in the House and become law. And with different visions coming into focus on the best way to spend federal funds to kick-start the economy, it’s looking like it might be difficult to get a stimulus package approved any time soon.

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NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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