drnadig/iStockBy CHEYENNE HASLETT and ALLISON PECORIN, ABC News
(WASHINGTON) — While America’s financial leaders may be split about whether the U.S. is on its way to economic recovery, both Democrats and Republicans largely agree that additional measures — including another stimulus package — is inevitable.
It will all have to wait, however, until after Congress returns from its Fourth of July recess, a two-week vacation that leaves legislation at a standstill.
As the legislators depart, here’s where things stand:
Bipartisan action in the nick of time on PPP
One play by the Democrats moved off the Senate floor this week: an extension to the Paycheck Protection Program, which expired at the end of June under current law.
PPP, which still had $134 billion to give even as the deadline neared, has undoubtedly been plagued with flaws. But rather than let the deadline for small businesses to apply for the program pass while Congress is on vacation, the extension means businesses can continue to apply through August.
In the meantime, Republicans and Democrats have batted around ideas to fix the program, which has doled out more than $513 billion in forgivable loans since it was launched in April.
Senate Small Business Committee Chairman Marco Rubio, R-Fla., argued that many small businesses that needed PPP have already gotten it — and used it up.
“What we really need to pass very soon is targeted help for those who need a second round of aid,” he said.
Other Republicans, like Sen. John Thune, R-S.D., have supported Rubio’s idea of less money but more targeted aid.
“It’d be driven more by losses, be needs-based and targeted as opposed to kind of just pushing money out,” Thune said.
As for the Democrats, Rep. Nydia Velázquez, chair of the House Small Business Committee, demanded more data on who had gotten the first round of PPP loans before she would agree to anyone getting a second loan.
“We know that 4 million businesses accessed the program. But what about the millions of minority- and women-owned businesses that were not able to access the program?” Velázquez said during a House Financial Services Committee on Tuesday.
“No one should get a second loan unless we know most businesses that are struggling get a chance to get a loan,” said Velázquez, a Democrat from New York.
Actual changes to the program will likely be tied to the next stimulus package.
The future is still unclear on the $600 per week of unemployment benefits.
The last CARES Act gave an extra $600 a week to everyone in the country who applied for unemployment insurance, on top of the regular unemployment amount they would receive from the state. But it expires on July 31, less than two weeks after Congress returns.
And more than one in 10 Americans, or 11.1%, are still unemployed, according to the latest joblessness report.
On Wednesday, Democrats introduced an option to keep the program going past July 31.
The legislation, introduced by Minority Leader Chuck Schumer and Finance Ranking Member Ron Wyden, would create a “trigger” mechanism, tying the rate of unemployment benefits to the unemployment rate. As long as unemployment remains above 11%, $600 bonuses would remain in place. As the unemployment in each state drops, the bonus would reduce by $100 dollars for each percentage point.
But the latest joblessness report also showed nearly five million new jobs were added to the U.S. economy since May, when the unemployment rate was 13.3%, a measure of growth that Republicans took to mean they shouldn’t interfere.
“I just think it underscores how quickly the economy is rebounding, and we shouldn’t do anything to derail that,” said Pennsylvania Republican Sen. Pat Toomey.
But some lawmakers on both sides of the aisle have warned that tumult is still expected. The job numbers released Thursday were compiled before the recent surge in COVID-19 cases caused some states to delay their reopening plans.
“You’ve got to be living in a country club fantasy land to believe that this economic crisis is anywhere close to ending,” Wyden said.
Wyden has floated this “trigger proposal” for several weeks, but it has gained relatively little traction with Republicans. On the Senate floor Wednesday, he called on Republicans to offer constituents who are facing the July sunset of benefits some sense of security moving forward.
“We’ve got a moral obligation to not turn our back on those who are suffering,” Wyden said. “And I’m telling you the Senate is going to go home and Senators are going to hear loud and clear that workers are concerned about whether after July 31 they’re going to be able to pay rent, they’re going to be able to buy groceries.”
While Republicans have objected to an extension of the unemployment program, arguing that the $600 bonus serves as a disincentive for returning to work, some prominent Republicans have said they support some sort of additional unemployment support.
Sen. Rob Portman, R-Ohio, has proposed a bonus for individuals returning to work, while Sen. Chuck Grassley, R-Iowa, has said he supports some sort of measure that would prevent those receiving the unemployment bonus from “falling off a cliff” when it ends.
Direct Impact Payments
Back in April, the Internal Revenue Service executed a quick band-aid effort to combat economic standstill, delivering direct checks of up to $1,200 to nearly 160 million Americans.
Since then, Americans have said they’d like to see another round of direct impact payments, a call the White House seems to be receptive to.
It’s “on the table,” Larry Kudlow, director of the White House National Economic Council, said on Fox Business, though the payment could also come in the form of tax rebates, he said.
“I think the tax rebates or the direct mail checks are on the table. This is all pre decisional, a lot of discussion going on. Probably we would want to target those to folks who lost their jobs and are most in need,” Kudlow said.
The president, too, has expressed support for another round of payments in an interview with Fox Business, but was unclear about how those payments would manifest.
But many Republicans are not in lockstep with Kudlow or the president. Democrats in the House, on the other hand, have called for not only another round of payments, but to increase the amount for families with children by $600 per child.
There are, however, outstanding issues from the first round of stimulus checks that would need to be addressed before another goes out.
According to a report on the CARES Act by the nonpartisan Government Office of Accountability (GAO) published on June 25, 1.1 million of the $1.4 billion in payments went to dead people.
As a solution, GAO recommended getting death data in the hands of both Treasury and the IRS to “help ensure the integrity of direct payments to individuals if Congress considers this type of assistance in the future.”
Broad themes of the next stimulus package
On Tuesday, Majority Leader Mitch McConnell outlined three main themes he says Republicans will focus on in their next proposal: kids, jobs and healthcare.
“To step back toward normalcy our country will need K-12 and college students to resume their schooling, we will need to re-energize hiring to get workers their jobs back, and we’ll need continued progress in the health care fight to get ready for the fall and winter and speed the search for a vaccine,” McConnell said.
McConnell and fellow Republicans have also adamantly supported a legal carve-out to protect businesses, schools and health care providers who are afraid they’ll face lawsuits if people get sick when they reopen.
Republicans are expected to put pen to paper in late July, after the recess.
But as the number of coronavirus cases surge, Democrats have lambasted Republicans for slow-walking future relief packages. In an effort to galvanize support for their cause, Democrats brought a number of coronavirus relief proposals to the Senate floor throughout the week, almost all of which failed.
Those included proposals that would have granted rental assistance, food assistance, a moratorium on evictions, aid for nursing homes, among others.
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