Republicans and Democrats remain at an impasse over the much-needed coronavirus relief bill that could pump $1 trillion or more into the economy. With both sides sticking to their positions, there was no prospect of negotiations resuming this week. It boils down to a question of which side will budge enough for a reasonable compromise.
President Trump, meanwhile, moved to make an end run around the Democrats by issuing executive orders to provide $400 in unemployment benefits to people out of work because of the pandemic and to defer payroll taxes for those earning less than $100,000 a year. An unemployment benefit of $600 a month for people out of work expired last month. Participating states would be expected to cover $100 or 25% of the cost and it’s not clear which states will opt into the plan or how long it will take for implementation.
Trump said he was open to negotiating with House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer. The president said the Democrats knew his phone number if they “want to make a deal.” Senate Majority Leader Mitch McConnell said, “We’re waiting for the Democrats to indicate some interest in getting an outcome.” Democrats offered to reduce their $3.4 trillion bill by $1 trillion if Republicans would raise their $1 trillion proposal by another $1 trillion but that deal was refused by the Trump administration. According to a senior official, the White House felt that the president’s executive actions enable the administration to argue that it is providing economic relief to Americans in contrast to the failure of Democrats to act. But how this will play out remains to be seen.
Pelosi and Schumer assert that their huge aid package is needed to deal with the surge in COVID-19 cases, high unemployment and the threat of poverty for millions of people out of work. The Democratic pair said: “We believe the patient needs a major operation, while Republicans want to apply just a Band-Aid.” Schumer said. “We won’t let them just pass the Band-Aid, go home and leave America bleeding.” He said Trump’s move to defer payroll taxes was “way off base,” arguing it would not pump money into the economy. Even among Republicans there was opposition to the tax cut. GOP Rep. Chip Roy of Texas expressed “substantive concerns” about the tax cut, saying it was “not how we should be making policy” and allocating federal funds.
The Washington Examiner reported that “multiple economists” said the tax cut was not likely to help businesses or spur economic growth over the long term. In the same vein, Tomas Philipson, former acting chairman of Trump’s Council of Economic Advisers, said the proposed unemployment benefits are far too costly and could be a disincentive by paying people more in benefits than they could earn working. This is a concern that must be addressed in a reasonable legislative proposal — which the American people deserve but may be far from realizing, thanks to the partisan political position of the Democrats.
Republicans have charged that Democrats are trying to “implement socialist policies” with their stimulus proposal, demanding funding for extraneous programs including millions for public broadcasting, new tax credits for solar and wind energy, required same-day voter registration and early voting, and a study of climate change mitigation efforts in civil aviation and aerospace industries. Such policies obviously have no place in legislation to meet the legitimate pressing needs of people across the country. Now is the time for Republicans and Democrats to work out a reasonable compromise that will meet those needs. Now is the time for less partisanship and more leadership.