A new stimulus package is in the works.
Senate Majority Leader Mitch McConnell said Monday that Republicans would likely unveil a plan as early as next week and then start talks with Democrats.
The news from McConnell comes two months after the full House passed the Democrats’ $3 trillion coronavirus stimulus package by a narrow 208-199 vote on May 16. In passing H.R. 6800, the Heroes Act, 14 Democrats voted no, and one Republican voted yes.
On Monday, McConnell said he is working with the Trump administration on drafting a proposal.
McConnell and Treasury Secretary Steven Mnuchin “are already talking about the next stimulus bill, which will take shape later this month,” Greg Valliere, chief U.S. policy strategist for AGF Investments, said in his Tuesday morning email briefing. “Three competing narratives affect the talks: first, signs that new Covid-19 cases have stalled the economy; second, the need to provide funding for schools; third, grim new deficit figures, showing that red ink could soar past $4 trillion this year,” Valliere said.
The dominant factor, according to Valliere, “is that the virus is out of control in Florida, Texas and other states, which will necessitate another major stimulus bill. As for deficits — we’re still in the triage stage; Congress first has to save the patient.”
House Speaker Nancy Pelosi, D-Calif., told CNN on Tuesday that she’d delay the House’s August recess if a deal hasn’t been reached to renew enhanced unemployment benefits and other coronavirus relief expiring at the end of July.
The Hill reported that McConnell planned to have a draft bill ready Monday, when lawmakers return. “I’m predicting we will have one more rescue package, which we’ll begin to debate and discuss next week,” McConnell said.
McConnell’s goal, Valliere said, is to complete a bill in the next three weeks.
What will be in it? “There are so many ‘must pass’ provisions that it will be difficult to keep the price tag under $1 trillion; we think something like $1.5 trillion is more likely — with President Trump inclined to ‘go big’ on spending,” Valliere said.
Mnuchin, Valliere continued, “knows that two provisions are virtually mandatory — aid to reeling state and local governments, and liability protection for companies affected by the virus. McConnell will not bend on that; he said yesterday that he will insist on liability protection that would be retroactive to December 2019 and extend to 2024.”