WASHINGTON, DC – AUGUST 09: President Donald Trump arrives at the White House in Marine One … [+]
Over the weekend, when President Trump signed three presidential memoranda and one executive order, it did not signal the end of negotiations on the next incentive package.
On Sunday, President Trump said Democrats want to “get along” and continue the negotiations. While the two sides did not meet over the weekend, it sounds promising that negotiations will continue despite the flurry of political rhetoric following the executive actions taken over the weekend.
Where do we stand on the various issues that separate the two sides?
Reducing the total cost
The total cost of the bill remains to be one of the biggest sticking points between the two sides. Democrats initially called for a bill that would cost roughly $ 3 trillion and the White House would reject an offer to reduce the price to about $ 2 trillion.
On Friday, Treasury Secretary Steven Mnuchin called the reduction a ‘non-starter’ because the lower price tag reflects a change in time frames, rather than a reduction in amounts.
Senator Chuck Schumer (D-NY) added that “The House does not have the votes to go south of $ 2 trillion, the Senate Democrats can not go south of $ 2 trillion, so that’s what compromise is all about. “
We also learned that the biggest sticking point in the deal was $ 1 trillion in aid to state and local governments.
Additional state aid
The Heroes Act, which passed the Democratic-led House of Representatives in May, included more than $ 1 trillion in additional aid to states that have experienced a sharp reduction in tax revenue due to the shutdown.
The concern is that without additional help, many state and local governments may be forced to furlough or fire employees. This would further affect the impact system of unemployment and reduce government services at a time when it has already been postponed.
Republicans are not in favor of additional aid because some state and local governments had financial problems that predicted the pandemic. They do not want federal funds to compensate for financial mismanagement.
One major area that this is most obvious in the massive hole for state pension financing – The Pew Charitable Trusts reported that the gap for state pension financing in 2018 was a whopping $ 1.24 trillion.
The HEALS Act, introduced by First Chamber Member Mitch McConnell (R-KY), did not include additional assistance, but offered to adjust how states could use funds provided by the Cares Act.
It turns out that if both sides could end up over this key point, it would go a long way to reaching an agreement.
Lower unemployment benefits
Until this weekend, Speaker Nancy Pelosi (D-CA) said they did not intend to go back from the $ 600 per week improved federal unemployment benefits. On Sunday, she said that “there is room for compromise” on that amount bu “you have to see the whole package.”
With Republicans ready to come up to $ 400 a week, as evidenced in negotiations and with the president’s actions over the weekend, we could see benefits at that level in the final bill. Senator McConnell has previously said he was ready to support a bill at $ 600 a week.
It is a positive sign that there is also movement on this issue.
Second stimulus control
A second stimulus check of $ 1,200 that many Americans have their eye on seems to be the safest.
The proposal proposed by Senator McConnell in the HEALS Act included an increase in a recurring tax credit of $ 1,200 for single filers earning less than $ 75,000 and $ 2,400 for joint filers earning less than $ 150,000. It added an extra $ 500 per dependent without limit. If you made more than these income amounts, your control would be reduced by 5% of your adjusted gross income above those limits.
The Heroes Act included a similar incentive check with $ 1,200 to single filers and $ 2,400 to joint filers. One important difference is that it adds up to $ 1,200 for each addict with a limit of three.
A family of four below the income limits would receive $ 3,400 under the Republican proposal and $ 4,800 under the Heroes Act.
While we are not sure what will appear in the next package, both Americans would help those struggling and so we probably will not see one smaller than the first stimulus check.
What comes next?
We’ll wait and see how the negotiations go, but it feels like the two sides are creeping closer together and it’s encouraging to know that they will continue to work towards reaching an agreement.
What we do know is that every time an agreement is reached, Secretary Mnuchin said the Treasury could issue the next incentive checks in as little as a week.
