To say that negotiations on another COVID-19 relief package haven't gone well would be an understatement. Talks between Democratic and Republican leaders have gone nowhere, even after the enhanced unemployment benefits and several other provisions of the first stimulus package expired.
However, one group recently unveiled a bipartisan proposal to attempt to break the gridlock. The Problem Solvers Caucus, which is made up of 24 House Democrats and 24 House Republicans, is proposing a $2 trillion compromise to inject much-needed relief into the hardest-hit areas of the U.S. economy.
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What we know so far
Details are light so far, but we know the new proposal would come with a price tag of as much as $2 trillion and would indeed include a second round of direct payments to Americans of $1,200 per qualifying adult and $500 per child. This is not likely to be a sticking point, as both parties have supported more stimulus checks (formally known as "economic impact payments").
In addition, the new proposal would include:
- $450 weekly unemployment benefit boosts for eight weeks, transitioning to a $600 weekly maximum (total benefit, not a boost) afterwards. Democratic leaders have insisted on the $600 weekly boost in any legislation.
- $100 billion to healthcare programs, such as coronavirus testing and contact tracing
- $500 billion to state and local governments -- less than Democratic leaders had been seeking, but far more than the White House has previously offered
- $145 billion for schools and day-care centers. This is about one-third of what Democratic leaders have previously proposed.
- $15 billion for the U.S. Postal Service
- $290 billion for small businesses, including a second round of Paycheck Protection Program (PPP) loans
In addition to these provisions, the proposal would include triggers that would automatically authorize a third round of stimulus checks and would extend enhanced unemployment benefits if the economy is still a long way from recovering from the recession by January.
It's also worth noting that we just have the outline of what the proposal would contain. We don't have any of the key details (like who would qualify for a stimulus check or second PPP loan) at this point.
Does it have any chance of passing?
It's tough to say for sure. The proposal falls short of the amount Democratic leaders had said was their bare minimum (about $2 trillion). It's important to note that the bill would spend just over $1.5 trillion initially, with about $400 billion in potential spending in early 2020 if certain additional spending is triggered.
On the Republican side, the bill could meet fierce resistance by members in the House and Senate who think the price tag is too high. Bear in mind that Senate Republicans recently brought forward a bill that would cost about $500 billion. However, with Treasury Secretary and chief White House negotiator Steven Mnuchin urging lawmakers to not worry about the federal deficit right now, it could persuade some lawmakers on the right to support a proposal like this.
The bottom line is that while there are some good reasons both parties could go along with the bill, there are likely to be some big obstacles standing in the way. This is still a rapidly evolving situation, and it's certainly possible that the current proposal could be significantly changed before being considered.
