- Democrats in the House of Representatives on Tuesday unveiled a new $2.2 trillion coronavirus stimulus proposal that, among other things, includes funding so that most Americans could get a new $1,200 stimulus check.
- There’s been a stalemate in Congress for more than a month now, as Democrats press for more stimulus and Republicans’ priority has switched to keeping a lid on costs.
- There’s at least an outside chance that this new stimulus proposal could survive in some form and produce a new round of $1,200 stimulus checks before the end of the year.
We’ve been on record here as being pretty pessimistic that a new coronavirus relief accord will materialize from Congress, which would mean, among other things, that no one is getting a new stimulus check anytime soon. But maybe, just maybe, that might prove to be an overly negative prediction — and the complete opposite might just come to pass after all.
Smarter people than me certainly feel that way. Michael Cuggino of Permanent Portfolio Family of Funds told CNBC as much on Tuesday, insisting that there’s a “good chance” the US economy will get more stimulus from Congress before the election. If that turns out to be true, it will be attributable in part to the Democrat-led House of Representatives, which unveiled on Tuesday (the same day as the highly anticipated first debate between President Donald Trump and Joe Biden) a new $2.2 trillion stimulus package that includes billions of dollars in aid for the restaurant industry, billions in aid for state and local governments, and, yes, funding to support a new round of $1,200 stimulus checks (and $2,400 checks for married and joint tax filers).
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If that $2.2 trillion figure sounds familiar, it should: That was the exact size of the CARES Act, the relief package that Congress passed and Trump signed into law in the early days of the coronavirus pandemic. As far as other benefits this new proposal includes, it also proposes:
- New relief for the airline industry
- $225 billion in education funding
- $75 billion for coronavirus testing and tracing
- $600 in new weekly federal unemployment benefits
- and $15 billion in aid for the US Post Office.
There is broad, bipartisan agreement on the idea of certain pieces of this new proposal, such as the $1,200 stimulus checks. The political downside for new checks is practically non-existent, and even President Trump is on board with getting more checks into people’s hands. The only hangup is the delivery mechanism for such a benefit.
Republicans still control the Senate, and as the pandemic has lingered, the GOP has switched its priorities from flooding the zone with aid to more targeted relief that keeps as much of a lid as possible on costs. As such, the GOP has suggested smaller, targeted packages (which could include the checks), but Democrats have resisted, wanting a single package that’s as big as possible. Moreover, there’s also a huge coming fight to consider, in terms of the effect it might have on comity in both houses of Congress.
In a matter of days, don’t forget, the GOP-led Senate will take up the confirmation process for filling the late Justice Ruth Bader Ginsburg’s seat on the Supreme Court with Trump’s new nominee, Amy Coney Barrett.
Our view: The package unveiled Tuesday by House Democrats is all but assured to not become law in this exact form. However, there are two things to keep in mind. The House likely wouldn’t have bothered putting this new package together if leaders didn’t think there was at least an outside shot that the Senate might make a good faith effort at likewise debating the proposal. (Of course, if you want to be extra cynical you can view this merely as positioning Democrats for the November election. See? We tried to pass another stimulus bill to give you all $1,200 stimulus checks, but the Republicans stood in our way again).
Additionally, the Senate is not likely to approve this new package in its current form, but if you had to bet on anything here emerging in a final package, my money’s on the stimulus checks, no pun intended.