After six months of inexorable congressional deadlock over a stimulus aid bill, the vibe in Washington has changed: President-elect Joe Biden is wheeling and dealing behind the scenes in hopes of prodding Congress into an immediate aid package. Here’s what’s happening.
What’s Joe up to?
He’s breaking rank, pushing Democratic leaders in Congress to drop their insistence on a $2 trillion bill, which has been their hill to die on for the last six months. Senate Republicans have long insisted on a $500 billion bill, though Republicans have also split rank over what that $500 billion might entail.
Why, after months of pessimism, is the tide changing?
Financial cliff ahead: In late December, 12 million people lose extended unemployment, eviction moratoriums, and mortgage freezes (all from the CARES Act), all while the U.S. slides into a pandemic hell of widespread illness and lockdowns. Without immediate help, millions of low-income people will lose their incomes and homes, and that sort of economic carnage is neither tolerable to Democrats nor easily reversible in a recovery. Also, Joe’s on the scene.
Is there any chance of an aid bill this year?
Eh. Congress went home for Thanksgiving vacation and has only a few working days in December. No official negotiations are underway, despite a letter last week from Senator Chuck Schumer and Speaker of the House Nancy Pelosi, both Democrats, inviting Senate Majority Leader Mitch McConnell to negotiations. McConnell, a Republican, responded with thinly veiled gaslighting. That said, Biden is pushing hard, which is extremely unusual for a president-elect, who usually waits until their term starts and then takes full credit. Biden insists that Americans need help now, though as almost-president, he also needs help now. Without stimulus, he will likely inherit an economy in tatters. He is expecting a double-dip recession next year.
So, is aid coming?
Somehow, some way, yes. When, what, and how are still unclear. If Biden cannot push Congress into action, he’s considering executive orders to extend the evictions moratorium and loan forbearances once he takes office. Stimulus checks also could be tacked onto the December government funding bill, which must pass in the coming weeks, so that the government does not grind to a halt.
Is there any good news here?
Yep! Stimulus checks are back in vogue. This week, 127 top economists sent a letter to Congress, advocating for “stimulus checks until the economy recovers,” calling direct cash payments “one of the quickest, most equitable and most effective ways to get families and the economy back on track.” This letter shouldn’t be confused with the June letter from a different group of 150 different economists, pushing an aid package, or the July 2020 letter from many of the same economists, promoting a large second stimulus package. Given the 0% success rates of these letters, perhaps stronger tactics might be considered? Like a nationwide economists strike?