The maneuvering over COVID-19 stimulus legislation has been going on for months, but as I noted at New York, Nancy Pelosi may have just made the definitive move:
It might be a symbolic gesture designed to placate vulnerable House Democrats who want to say they’ve voted on stimulus legislation recently. Or it might be a gambit designed to tempt the president to break definitively with his congressional allies and get some serious COVID-19 stimulus money out the door before facing voters.
Either way, Speaker Nancy Pelosi is signaling that House Democrats are formalizing a $2.4 trillion version (close to the $2.2 trillion compromise price tag she’s been offering for a good while) of the $3.4 trillion HEROES Act that the House passed way back in May, as Roll Call reports:
“Speaker Nancy Pelosi has directed House committee leaders to put together a more slender coronavirus relief package than the one that previously passed the chamber, in their latest offer in talks with the White House.
“The House could vote on that as-yet-unreleased $2.4 trillion bill as soon as next week if GOP cooperation doesn’t materialize, according to Democratic lawmakers. But Democrats say they’re hoping for renewed talks with Treasury Secretary Steven Mnuchin and a compromise agreement that can actually become law.”
There will have to be some nips and tucks, particularly since Pelosi now wants some items not in the HEROES Act (notably targeted aid for airlines and restaurants). But you can be sure it will include the key elements the White House has already signaled it could support — particularly a second round of 160 million $1200 stimulus checks — and some new small business money, along with as much state and local fiscal assistance as Democrats think the market will bear.
Yes, there’s talk of cutting a deal with Congressional Republicans: Number Two House Democrat Steny Hoyer told Forbes he wanted to “get an alternative [bill] sent to the Senate that is a compromise.” But Senate Republicans, having already made their pre-election gesture with the famously meager “skinny stimulus” bill, won’t be interested unless the White House forces enough of them to get on board. It’s all about Trump imagining his signature on those 160 million checks right before Election Day and taking the bait. And if he doesn’t? It’s no big deal for Pelosi, who can have her show vote for the benefit of vulnerable Members and then wait until after November 3 in hopes that Democratic leverage for more stimulus will only go up with a Democratic president and Congress on the way.
Where will Speaker Pelosi, President Trump, or Secretary Mnuchin get that $2.4 trillion? If it will be taxes, then we must expect a hefty tax increase soon. If they will simply print it, then hadn’t we all better get ready for a burst of inflation in a year or two?
Only if the demand for goods and services significantly increases very soon. This kind of spending anticipates a soft economy going forward for the next couple of years.