Donald Trump has given up on passing another virus relief bill.
Or, if you like euphemisms, let’s just say the White House is no longer inclined to “take the lead” on negotiations.
That’s according to a pair of sources who spoke to Bloomberg, whose Saleha Moshin says Mitch McConnell is now in the driver’s seat.
If you’re wondering how that’s any different from the situation that’s persisted since late July, when key fiscal support measures included in the last stimulus bill began to lapse, the answer is that it’s not — any different that is.
McConnell has always been de facto in charge of the discussions, although you wouldn’t have known it from scanning the headlines. To let the media tell it, the clumsy waltz between Nancy Pelosi and Steve Mnuchin was what mattered, and every step closer the two came to closing the gap on key sticking points was met with cheers from the market and purportedly meaningful analysis from journalists.
The most ridiculous part of that three-month charade wasn’t the two sides’ inability to get a deal done in the interest of rushing relief to millions of Americans, tens of thousands of small businesses, and dozens of desperate state and local governments. That was tragic, but wholly predictable given pre-election jostling. The absurd part was that everyone pretended the prospective compromise bill between House Democrats and the White House ever had a chance of becoming law.
Since July, it’s been abundantly clear that McConnell could marshal support for, at best, a ~$750 billion package of targeted measures, and even that figure was wildly optimistic. Some GOP senators steadfastly refused to countenance any further spending at all, or, to the extent they were willing to begrudgingly acquiesce, proposals revolved around stingy allotments with contingencies and/or authorizing the release of unspent money that was already approved.
To this day, I’m still not entirely sure why anyone ever believed that Trump (or anyone else for that matter) was capable of cajoling Senate Republicans all the way up from the $500 billion they showed a willingness to spend in September, to $2.2 trillion. That gap simply wasn’t bridgeable.
Fast forward to the lame duck session and Moshin reports that Trump “is stepping back from negotiations and leaving it to… McConnell to revive long-stalled talks with Pelosi.”
If you’re shaking your head or just chuckling at the sheer futility inherent in the notion that McConnell and Pelosi will be able to find common ground, you’ll be forgiven.
There is no chance (none) that McConnell, who will retain the majority assuming the Georgia runoffs aren’t a disaster in January, is going to inexplicably decide to come up from $500 billion to $2 trillion. The English language is not a sufficient tool when it comes to describing how ridiculous that notion is.
If you don’t believe me, just ask Mitch, who on Thursday said he’s not interested in “dramatically” larger stimulus. Relief, McConnell insisted, should be “about” the amount that was put on the floor in September and October — so, around $500 billion.
Do note that for all the different permutations of the compromise deal Pelosi and Mnuchin tried to hammer out, McConnell’s offer has never changed. Not one bit. And it’s not likely to change now given that the odds are squarely in favor of Republicans holding the Senate.
Bloomberg’s Moshin goes on to note the obvious, which is that Trump is far too preoccupied with trying to overturn the results of the presidential election than he is with marshaling support in the GOP for more virus relief. “Trump had committed to pursuing a large-scale stimulus after the election, even saying he would approve a $2 trillion bill, but has since focused on attempting to overturn President-elect Joe Biden’s victories in battleground states,” she writes.
That is risky, to say the least, but not for Trump. He doesn’t need the stimulus, after all. You might, but he doesn’t, and neither does his family. So, he’s going to do what’s in his interests, which in this case means filing lawsuits all across the country (funded in part by donations, of course).
The optics around this are not great, to say the least. But it’s hardly surprising. Did anyone seriously believe that Trump, if he lost the election, would work with lawmakers (Democrats or Republicans) to pass a stimulus bill on his way out the door? If you were buying that, then I’ve got a business plan for a Trump-branded casino I’d like to discuss with you. (I’ll just need a few hundred million and we’ll be off and running!)
Speaking to reporters, McConnell predictably cited the improvement in the economy as evidence that big spending isn’t necessary. “The level at which the economy is improving further underscores that we need to do something at about the amount that we put on the floor in September and October,” he mused. Commenting on Democrats’ push for a bigger package, Mitch said “that’s not a place I think we’re willing to go.”
Appreciated, but “broke” isn’t “a place” 10 million Americans were “willing to go” either, and yet here we are, with the labor market still about that far from being healed (figure below).
For what it’s worth (which is a lot considering he’s all that stands between whatever the balance is on your retirement portfolio and a much lower number), Jerome Powell doesn’t agree with this rather flippant approach to fiscal stimulus.
Speaking during a virtual panel discussion with Christine Lagarde and Andrew Bailey on Thursday, Powell emphasized that the unchecked spread of the virus is a real challenge for the US economy.
“We do see the economy continuing on a solid path of recovery, but the main risk we see to that is clearly the further spread of the disease here in the United States,” Powell said.
Yes, “clearly.” And forgive me, but “clearly” the outgoing administration has given up on that too. How else would you describe the figure below?
There’s seemingly no effort at all from the White House to contain the spread. In fact, Trump adviser Corey Lewandowski tested positive just yesterday, media reports indicated. If you’re keeping track at home, that’s Mark Meadows, Ben Carson, Corey Lewandowski, and, naturally, David Bossie, the man advising the president on his election-related legal challenges, all in the space of the last week.
Commenting further on Thursday, Powell said “my sense is that we will need to do more, and Congress may need to do more as well on fiscal policy.”
Chuck Grassley, who is mostly sane as far as GOP lawmakers go, said there’s been no discussion between McConnell and Pelosi. “McConnell is not going to rely on Mnuchin any more to do the dealing,” Grassley remarked. “I think he is intending to take it over and to try to get something going and get it done.”
Don’t hold your breath.