This week has been even more chaotic than usual. And given the events of this year, that’s saying something. First, there was an agonizing presidential debate, then the revelation of Trump’s tax returns, and finally, of course, the news that President Trump and First Lady Melania Trump have both tested positive for COVID-19.
But amid all these attention-grabbing headlines, the House quietly passed a stimulus bill on Thursday night. After months of negotiating, and with key provisions like the enhanced $600/week unemployment benefit having expired back in July, Democratic and Republican lawmakers still haven’t agreed on the next COVID-19 stimulus package that would give a firm answer to whether struggling Americans were getting another direct stimulus payment or an extension on their enhanced weekly unemployment benefits. To put that into clearer context, today is the second day of October; the CARES Act was signed into law on March 27th. Very cool!
The bill passed last night isn’t new and doesn’t contain anything stunningly different. It’s in fact a stripped-down version of the Heroes Act, which the House passed back in mid-May. The original cost about $3.4 trillion and included another $1,200 direct stimulus payment, with payments for dependents increased from $500 in the CARES Act to $1,200. Heroes Lite costs $2.2 trillion and also includes a provision for a $1,200 direct payment, but retains the $500/dependent payment. It also gives over $25 billion in aid to airline companies, around $225 billion for education, and $57 billion for childcare. Importantly, it also brings back the $600/week unemployment boost that was serving as a lifeline to many during a period when many are facing long-term joblessness.
But don’t rejoice yet. Functionally, the passage of Heroes Act 2.0 doesn’t mean much given that it has virtually no hope of becoming law. Senate Republicans are unlikely to vote on it, and have repeatedly insisted on a bill close to $1 trillion or less. In September, Senate Republicans tried to pass a stimulus package that only gave about $650 billion in aid, $350 billion of which would come from funds that hadn’t been depleted from earlier relief packages. Speaker of the House Nancy Pelosi has continued talks with Treasury Secretary Steven Mnuchin, but indicated yesterday that they were far apart in coming to a deal. The latest White House offer is a $1.6 trillion proposal that would include a $1,200 direct payment and a $400/week unemployment boost just until the end of 2020. But Republican lawmakers don’t seem eager for this White House compromise either, insisting that it’s still too expensive.
Time is running out again. Starting October 12th, Congress goes into recess until after the election. Many important CARES Act provisions expire on January 1st, 2021, including Pandemic Unemployment Assistance (PUA) — which expanded unemployment benefits to those who weren’t eligible through regular state unemployment, such as self-employed people — and Pandemic Emergency Unemployment Compensation (PEUC), which extended unemployment benefits for those who had already exhausted the maximum amount of unemployment benefits.
While Trump signed an executive order distributing more unemployment funding as negotiations stalled in August, some states quickly ran out of the extra unemployment money from the Lost Wages Assistance program. Unemployment has recovered from the peak in March and April, but the rate of jobs being added slowed down in September, indicating that the economy will not bounce back quickly. The national unemployment rate also doesn’t perfectly capture whether people are doing better; in part, unemployment numbers dropped this month not because people found work, but because they gave up on looking for work.