After a chaotic week in which a drugged president shut down negotiations, then came back to the table, here’s where things stand:
- Fed chair Powell issued a public plea for fiscal stimulus from Congress
- The House passed a $2.2 trillion relief bill, which is going nowhere
- Trump is now offering $1.8 trillion, up from $1.6 trillion, but with a giant Catch-22
- GOP senators aren’t going along with the latest White House offer
- Passing a relief bill before the elections is very unlikely
CNN reports, “Senate Republicans have united behind the price tag of $500 billion,” which is unrealistically low in terms of what’s needed and what Democrats might accept. And there now appears to be a major problem with structuring the relief. CNN says Pelosi is arguing the language directing how the funds will be spent has become “the most critical aspect” of the negotiations. Here’s the problem:
“In her letter Saturday, Pelosi dismissed Trump’s proposal as wanting … discretion to grant or withhold” the spending approved by Congress.
In other words, Trump is offering a higher figure, but won’t spend it. For that reason, I’ve qualified the latest GOP offer by treating $1.8 trillion as a ceiling and their actual spending intentions as unknown.
Read the CNN story here.
Why isn’t the stock market, which has eagerly anticipated another relief bill, crashing on this news? Because Wall Street expects Democrats to sweep the elections and then pass a large relief bill in January.