Confusion at the White House over the next fiscal aid package seems to be a sure thing, even with the U.S. presidential election just weeks away.
First President Trump cut off talks on a Covid-19 relief bill until after the election, but reversed course by calling on Congress to pass $1,200 stimulus checks hours later, in addition to seeking relief for the airline sector.
The problem is that congressional members are still at odds in their negotiations. “The stimulus negotiations are off,” Trump’s Chief of Staff Mark Meadows said Wednesday morning.
The Democrats are insisting on one comprehensive package to aid the economy instead of piecemeal funding. That said, House Speaker Nancy Pelosi is open to the idea of passing separate funding to aid the ailing airlines industry, with could see tens of thousands of workers displaced now a moratorium on furloughs has expired.
Trump’s initial tweet ending negotiations until after the elections came Tuesday afternoon, noting Pelosi’s request for $2.4 trillion dollars to bail out Democratic states and how “[W]e made a very generous offer of $1.6 trillion dollars, and, as usual, she is not negotiating in good faith…. I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill…”
Seven hours later, Trump took to Twitter again to say that the “House and Senate should IMMEDIATELY” approve $25 billion for airline payroll support and $135 billion for the paycheck protection program for small businesses. The latter would extend the federal assistance program to American households and businesses that ended on July 31. “Both of these will be fully paid for with unused funds from the Cares Act. Have this money. I will sign now!” he tweeted. An hour later, Trump tweeted his support for a standalone piecemeal plan: “If I am sent a Stand Alone Bill for Stimulus Checks ($1,200), they will go out to our great people IMMEDIATELY. I am ready to sign right now. Are you listening Nancy?”
Of course, tweeting out that he’s “ready to sign” stimulus checks for taxpayers makes for a good sound bite just before voters take to the polls on Oct. 24 for early in-person voting—although many have already sent in their mail ballots in some states—especially since he already knows the general Democratic position on piecemeal funding means any exhortation on his part carries little weight anyway.
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More important, should Trump lose the election, any legislation benefitting American households and businesses likely won’t bear fruit until the next presidential term starts in late January. Meanwhile, more job losses are on the way nearly two-and-a-half months after the last aid package expired. Disney said it is laying off 28,000 employees. Wells Fargo on Wednesday said it will cut 700 commercial banking jobs, and Cisco employees are bracing for a possible round of layoffs following the company’s announced plan to cut $1 billion in expenditures now that the 60-day notice requirements for mass layoffs and plant closing are near their expiration dates. Meanwhile, the Regal Cinemas movie chain will temporarily shutter all 536 U.S. theaters again due to Covid-19.
All the closures and layoffs are already threatening what appears to be a nascent economic recovery. Calling for a hold on any fiscal stimulus negotiations is viewed as a move that hurts the American economy, as retail and apparel industry trade groups were quick to note.
“The economy is not something that can be put on hold until a time that might be more convenient. People are suffering today. Now is the time to deploy all the tools in our toolbox–both to attack the underlying health crisis and to provide crucial liquidity and credit relief for manufacturers, brands, retailers, and the workers they support,” Steve Lamar, president and CEO of the American Apparel & Footwear Association, said. “This is a critical time–with the important holiday season about to start–and we cannot afford to hit pause. We urge all parties to stay at the negotiating table to craft and pass a comprehensive COVID relief package now.”
The National Retail Federation (NRF) has also been calling for economic relief, whether through an expanded Paycheck Protection Program, tax credits for the cost of personal protection equipment and protection against lawsuits for businesses that follow safety guidelines set by public health agencies. The NRF on Tuesday also expressed concern over Trump’s decision to stop negotiating with congressional leaders on new legislation that could foster economic recovery.
“The pandemic isn’t over and neither is the economic crisis it has created,” said NRF president and CEO Matthew Shay. “There are many families still struggling to make ends meet and businesses facing obstacles to putting workers back on the payroll. We need a vaccine to ensure our personal health. And we need further stimulus to ensure we can fix an ailing economy, bring people back to work and spur growth in communities large and small.”
NRF chief economist Jack Kleinhenz noted in the trade group’s October issue of Monthly Economic Review that consumer spending saw a “clear V-shaped recovery thanks in part to $1.200 stimulus checks issued this spring and enhanced benefits for the unemployed.” On a more sobering note, Kleinhenz said now that both government programs have ended, “only about half of the 22.2 million jobs lost in March and April have been replaced and full economic recovery is not likely before 2022.”
While the recession appears to be in the rearview mirror, what seems like a rebooting economy could cloud the fourth-quarter outlook, hampered in part by “wildcard puzzle pieces that range from policy surprises, the election and a resurgent virus,” he added.