More Relief Working its Way Through Washington
House Democrats Present Massive New Spending Bill
Unemployment claims continued to climb last week to 2.98 million, bringing the total number to 36.5 million over the past two months—the highest in the nation’s history. Although this figure was larger than expected, some are taking comfort in the fact that the number of weekly claims has been steadily declining over the past six weeks. That being said, many workers and small businesses are still facing unprecedented challenges.
Democrats in the House of Representatives are scheduling a vote today on a proposal to inject even more financial fuel into the economy and healthcare system. The latest spending package would cost more than $3 trillion. This would make it the biggest emergency stimulus measure in the country’s history.
The new wave of aid would include another round of $1,200 payments for individuals and up to $6,000 per household. It would also encompass nearly $200 billion in hazard pay for frontline workers, $175 billion in utility, mortgage, and rent assistance, $10 billion in grants to help keep small businesses afloat, plus tax credits for keeping employees on payroll, and $75 billion to provide coronavirus testing and jumpstart contact tracing.
The Fed Weighs In
Federal Reserve Chairman Jerome Powell backed stimulus efforts, saying Wednesday that the US will suffer “long-term economic damage ” without additional federal spending.
The Federal Reserve has already taken action to help stabilize the economy, but it does not have the ability to get money to citizens and businesses the way Congress does. Powell is perhaps the most influential figure pushing for increased federal spending to avoid a yearslong recession.
Officials at the Federal Reserve, and the latest economic studies, all point to the need for increased and sustained federal spending to keep the economy afloat.
The GOP Raises Concerns
Even with the Fed’s support, House Democrats’ latest stimulus bill faces headwinds. If the bill passes in the House, it would then move to the Republican-majority Senate.
Republican Senators have concerns and have spoken out against the proposed legislation, citing worries about the federal deficit. Senate Majority Leader Mitch McConnell and other Republicans are currently taking more of a “wait and see,” approach, given the record amount of money the government has already spent to prop up the economy during the pandemic. Mitch McConnel noted , “We’re taking a look at what we’ve already done—we’ve added about $3 trillion to the national debt—and assessing the effectiveness of that before deciding to go forward.”
Republicans and White House officials have also cited the fact that there are still more funds left in the Paycheck Protection Program. So far there have been two rounds of funding totaling more than $650 billion. Midweek, roughly $122 billion remained in the fund.
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