The next stimulus plan could include more checks for Americans. Here's what else DC power players want to cram into the bill — and who would benefit most.
- Soon after President Donald Trump passed a momentous $2.2 trillion stimulus package, he and House Speaker Nancy Pelosi said another relief bill might be necessary
- The package — which would be the fourth stimulus related to the coronavirus pandemic — may include another round of direct payments to Americans, as more than 30 million jobless claims have been filed over the past 6 weeks.
- In an April 22 research note, Bank of America predicted another $1.5 trillion in stimulus will be spent to aid American households and businesses.
- Here's what the major party stakeholders — including Trump, Pelosi, and Senate Majority Leader Mitch McConnell — are hoping the next stimulus package looks like.
- Visit Business Insider's homepage for more stories.
The law was the third stimulus package designed as relief for the coronavirus pandemic — but it might not have been enough.
The outbreak, which has infected more than 1.2 million Americans, has shuttered nonessential businesses in most states, including many in hospitality and food services, and led to a record amount of jobless claims: more than 30 million over six weeks.
House Speaker Nancy Pelosi was an early voice saying that even the massive third stimulus package wasn't big enough — within a week of it being signed into law. She has advocated for another round of direct payments to Americans like the $1,200 checks sent to people as part of the "phase-three" package.
President Donald Trump, who is seeking reelection in November, also said in March that he was eyeing more spending, tweeting his support for an infrastructure-focused relief bill to the tune of $2 trillion.
Congressional Democrats and Republicans have since floated many ideas on what should be in the next stimulus — and how big it should be.
On April 22, Bank of America predicted in a research note that Congress will pass another large stimulus worth up to $1.5 trillion that extends on provisions in the "phase three" package and provides aid to state and local governments. Deutsche Bank said in a May 5 note that it expects an additional $1 trillion of fiscal stimulus, and a CNBC survey released April 28 predicted that $2 trillion more will come from the federal government.
Meanwhile, the states and cities that have shouldered much of the economic impact of the pandemic — from bidding on PPE and ventilators in the absence of a coordinated national effort to administering the exploding number of unemployment claims — are asking for relief that was missing from phase three.
The National Governors Association asked for $500 billion of federal aid on April 11, and the National League of Cities and U.S. Conference of Mayors asked for another $250 billion on April 16. But that's not all: public education systems asked for $200 billion on April 28, and departments of transportation asked for $50 billion on April 6.
Here's where a "phase-four" package stands — and what major stakeholders want it to include.
SEE ALSO: The pandemic is giving the US a chance to fix its embarrassing unemployment benefits. Top economists tell us what the future of this crucial system could look like.
Pelosi wants a retroactive SALT rollback and more money for states and local governments.
Pelosi told The New York Times in March that her preference for a phase four would include some kind of retroactive rollback of the limit on the state and local tax deduction. Part of the tax cut passed in 2017, the SALT policy change especially hurt high earners in states like New York and Pelosi's California. Rolling it back would increase tax rebates for about 13 million households, according to The Times' estimates, nearly all of them earning at least $100,000.
In addition, Pelosi has said that another stimulus should include a second round of direct payments. This month, many Americans taxpayers received stimulus checks of up to $1,200 for single filers and up to $2,400 for married couples. But many congressional Democrats have said that the $1,200 check — which barely covers what the average American spends on rent and utilities — doesn't go far enough. Pelosi's plan would also give more aid to states, cities, small businesses, health systems, and first responders, Politico reported.
At an April 30 news conference, Pelosi demanded that any phase four legislation also include close to $1 trillion to replenish decimated state and local government budgets. She cited the demands from the National Governors Association, among others.
A May 1 Bank of America research note estimated the budgetary shock to all 50 states at about $284 billion from July 2020 to June 2021. (BofA was projecting based off an estimated average unemployment rate of 9.9% and a methodology from Brookings, calculating that each 1% uptick in the rate translates to a $45 billion budgetary hit.)
BofA further noted that its own municipal analysts put the shortfall at $150 billion to $300 billion, and that these estimates don't include either needs at the local level or states' rainy day funds, which could amplify or lessen the need, respectively.
Trump is eyeing a major investment in infrastructure — and a 'sanctuary city' trade-off.
In a tweet, Trump said infrastructure should be the focal point of the phase-four stimulus package. Aid to healthcare and broadband infrastructure will likely get bipartisan support in Congress, according to The Hill.
"With interest rates for the United States being at ZERO, this is the time to do our decades long awaited Infrastructure Bill," the president wrote on March 31. "It should be VERY BIG & BOLD, Two Trillion Dollars, and be focused solely on jobs and rebuilding the once great infrastructure of our Country! Phase 4."
//twitter.com/mims/statuses/1245000074167541761?ref_src=twsrc%5Etfw
With interest rates for the United States being at ZERO, this is the time to do our decades long awaited Infrastructure Bill. It should be VERY BIG & BOLD, Two Trillion Dollars, and be focused solely on jobs and rebuilding the once great infrastructure of our Country! Phase 4
Trump has long sought to punish sanctuary cities and states that have policies to limit or refuse cooperation with the federal government's immigration enforcement. He said in March that he would withhold federal funds to them.
On May 5, Trump returned to an idea he had suggested in March: a payroll tax cut. "The elimination of Sanctuary Cities, Payroll Taxes, and perhaps Capital Gains Taxes, must be put on the table," he tweeted.
McConnell has sent mixed signals, and at one point supported allowing states to declare bankruptcy.
Senate Majority Leader Mitch McConnell was initially cold to the idea of a phase-four package but acknowledged in early April that there would be a "next measure."
His first instinct was to wait. "Well, I think first, we need to see what the effect of the current bill is," McConnell told radio host Hugh Hewitt in March.
McConnell told The Associated Press on April 4 he would prioritize healthcare spending, particularly for finding treatment and vaccines. McConnell also said he'd shy away from passing anything unrelated to the emergency, saying that Democrats were pushing "unrelated pet priorities" in their urging for a phase four.
But McConnell's biggest demand in the back-and-forth over a potential phase four emerged during another appearance on Hewitt's show on April 22, when he said he would "certainly" be in favor of allowing states "to use the bankruptcy route."
States are not currently allowed to file for bankruptcy. As noted by David Frum in The Atlantic, American bankruptcy is "overseen in federal court, by a federal judge, according to federal law," an attractive prospect given that the federal judiciary has "shifted in conservative and Republican directions" during McConnell's tenure.
Governors from both parties disagreed with McConnell's bankruptcy suggestion, including New York's Democratic Gov. Andrew Cuomo and Maryland's Republican Gov. Larry Hogan.
By April 29, McConnell spoke on a private call about a new must-have, according to The Wall Street Journal: a provision that would shield companies from liability over lawsuits related to the pandemic.
With Republican states leading the partial reopening of the economy, this potential provision would appear to be an admission that companies are endangering their employees by resuming normal business activity.
Some congressional Democrats want additional relief for people most affected by the coronavirus pandemic.
In early April, House Democrats unveiled a phase-four proposal, which includes infrastructure investment in community health centers and broadband, additional loans to small businesses, and aid to hospitals and local governments.
Individual Democrats within Congress are publicly pushing for more.
Senate Democrats, led by Minority Leader Chuck Schumer, have proposed adding a "Hero's Fund" to the next stimulus deal. The fund would award essential workers like nurses, truck drivers, and grocery-store clerks as much as $25,000 in hazard pay.
House Democrats have also been advocating stimulus measures separate from a bigger phase four. On April 14, a group led by Reps. Tim Ryan and Ro Khanna introduced legislation that would provide payments of $2,000 per month for at least six months to Americans 16 and older and making less than $130,000 per year. Rep. Pramila Jayapal previously laid out legislation that would have the government cover 100% of employees' wages and benefits up to $100,000 (a similar idea was proposed by Republican Sen. Josh Hawley).
Karen Bass, the chairwoman of the Congressional Black Caucus, said she hoped the phase-four stimulus package would address the racial disparity among coronavirus infections. A recent report from the Centers for Disease Control and Prevention said 33% of the US's hospitalized COVID-19 patients are black, even though black people make up 18% of the overall US population.
Some congressional Republicans hope to help low-income families — and some are supporting McConnell's idea of a business liability waiver.
Republican lawmakers — including House Minority Leader Kevin McCarthy — have echoed McConnell's sentiments on not immediately passing another stimulus package. The Hill reported that Senate Republican Policy Committee Chairman Roy Blunt said he would wait until May before deciding what Congress needs to add in subsequent relief bills.
But other Republicans have supported more relief to low-income families and rural families.
Some Republicans in both the House and Senate joined Democrats in advocating for measures to increase access to broadband internet for low-income families in the next stimulus package. Republican Sen. Lisa Murkowski told The Hill that she hoped the next stimulus package offered mental-health relief to struggling families.
Sen. Mitt Romney, who pushed for immediate cash assistance in the phase-three stimulus, said he could see phase four targeting local businesses and laid-off workers.
In late April, McConnell's regular interviewer, Hugh Hewitt, outlined a full wishlist for phase four in a Washington Post op-ed. It included longtime Republican goals like recapitalizing the "defense industrial base" and making sure that high-tech companies would be an "open book" to US intelligence regarding Chinese matters. Hewitt did say that states should get additional aid, with "strings" that "might reasonably be attached," such as "possible bankruptcy reorganization solutions for cities and counties."
By early May, The Washington Post reported, Sen. John Cornyn was working on a bill that would shield companies from liability over pandemic-related lawsuits.
* This article was originally published here
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