Trump throws Covid relief funding into chaos

Trump throws Covid relief funding into chaos

Congress passed a $900 billion stimulus package this week, ending a seven-month impasse over coronavirus relief—but the bill hit a surprise roadblock when President Trump called it a “disgrace” and demanded more direct relief to American households. 

The stimulus bill, which was hammered out over weeks and passed resoundingly in both chambers, calls for a round of $600 payments to middle- and low-income Americans and their dependent children, provides 11 weeks of $300 unemployment benefits, and revives the Paycheck Protection business-loan program. It includes $25 billion in rental assistance, $13 billion to expand food stamp benefits, and $15 billion for cultural institutions, and extends an eviction moratorium. But Trump, whose Treasury secretary, Steven Mnuchin, helped shape the bill without Trump’s involvement, stunned Capitol Hill and his own aides by releasing a video in which he called the $600 payments “ridiculously low” and demanded they be increased to $2,000, suggesting he wouldn’t sign the bill otherwise. 

The stimulus measures were yoked to a $1.4 trillion appropriations bill funding federal agencies through next September. Democrats jumped at Trump’s demand for bigger payments—“Let’s do it!” House Speaker Nancy Pelosi tweeted. But any plan to incorporate them would face some Republican opposition—and a government shutdown looms on Dec. 29. It was unclear how far Trump would take his crusade. He might “forget about this whole episode,” said a Democratic aide, “or maybe he’ll just blow the thing up. Perfect coda to his time in office.” Also this week, Trump made good on a threat to veto the $741 billion defense spending bill, but Congress was expected to override him. 

Even $600 payments are too much, said The Wall Street Journal. Much of the money will go to employed, middle-class Americans who’ll stash it away, boosting a personal savings rate that’s doubled this year while generating “little or no economic impact.” The unemployment benefits are “another blunder” and will slow recovery by giving Americans less incentive to work at a time when many businesses are “desperate to hire.” Some “85 percent of the population” will be eligible for at least a portion of the $600 payments, said the Los Angeles Times, including individual earners with adjusted incomes up to $87,000 and couples up to $174,000. But the broader economy “doesn’t need stimulus at this point,” and this money should have been focused on “people in crisis”—the unemployed, renters, and food stamp recipients. And unfortunately, Republicans blocked aid to strapped state and local governments, who may face “extensive layoffs” in 2021, unless Congress comes back with another rescue bill. 

The need for immediate aid is dire, said Rachel Siegel and Heather Long in The Washington Post. Retail sales are lagging, “hiring has slowed markedly,” household spending has dipped, thousands of businesses have closed, and up to 14 million Americans are about to lose unemployment checks. This bill promised a lifeline for “households and businesses fighting to make it through the winter.” Now Trump has left “the entire bill’s future uncertain.” Senate Majority Leader Mitch McConnell is in “a no-win situation,” said Sinéad Baker in BusinessInsider.com. He can “cave and accept a larger stimulus figure” he fought for months. Or he can block the bigger payouts “and take the political heat for it.” Trump “just handed Democrats a big weapon” in the battle to win the Georgia Senate runoffs, said Greg Sargent in WashingtonPost.com. 

The standoff makes clear Senate Republicans are “the only real obstacle to more-generous economic assistance.” And that points to “the real consequences” of giving the GOP continued Senate control: “very little chance of another ambitious aid package.” Once again, Trump is causing “chaos” with this last-minute intervention, said Robert Verbruggen in NationalReview.com, and it’s unclear “where it will end up.” Maybe he’s bluffing and will sign the bill; maybe “Congress will cave” and add $370 billion to fund the $2,000 payments. Trump could execute a “pocket veto” by not signing it, and forcing the next Congress “to start over from scratch.” A government shutdown is “in the mix here, too,” with funding set to run out on Dec. 29. “I guess it wouldn’t be the Trump presidency if this went any other way.”

 

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