Negotiations Likely for 5th Relief Bill

The House of Representatives is set to pass another massive coronavirus spending package. While highly critical of the bill in its current form, the White House and Republican lawmakers have signaled a willingness to play ball with the Democrat-controlled House of Representatives.

The HEROES Act

The HEROES Act is just the start of a negotiation process, and there’s plenty of room for compromise. That’s the message Nancy Pelosi sent on Thursday.

The Democrat-controlled House will vote on the bill on Friday, and it’s likely to pass. An initially cold reception from conservatives is beginning to thaw, setting the stage for an interesting round of talks.

Republican lawmakers have been highly critical of the bill, and the White House called the bill a “liberal wishlist.” However, the conditions for another stimulus bill appear more favorable today, due to more red flags in several economic indicators.

Unemployment continues to soar, and the stock market is finally showing some fatigue as streams of negative data pour in. Both the White House and Senate Majority Leader Mitch McConnell, while bashing the bill in its current form, have indicated that more stimulus will likely be necessary this year. The time is ripe for more stimulus, and “more stimulus” is certainly one way to describe this bill.

The Heroes Act is, to understate, enormous. Nearly $1 trillion will be sent directly to states to spend as they wish. Pelosi calls this the bill’s “centerpiece”. The bill would also send another round of $1,200 checks to virtually all US residents earning less than $75,000 ($150,000 for couples), with an extra $1,200 per dependent instead of $500. Families can receive up to $6,000 this time around.

The bill includes a $600-per-week boost to unemployment benefits. It also stipulates a $75 billion fund to expand COVID-19 testing and contact tracing.

The sprawling, ambitious bill would also forgive up to $10,000 in federal student loans for all Americans.

Sticking Points

In its current form, the bill is rankling conservative lawmakers for a number of reasons, not least of which is its sheer price tag.

This bill alone would cost $3 trillion, which puts it more than 60% of what the federal government spent in all of 2019, and about equal to all economic stimulus spending thus far. The government is already set to run an unprecedented deficit of nearly $3 trillion this year. With no additional tax revenue, this bill would roughly double that figure.

The argument can be made that softening the economic impact of the pandemic today is worth the additional debt, but the nation is entering uncharted territory with this level of borrowing. It could weigh on the economy for decades to come.

Another major sticking point for Republicans is that stimulus checks would also go to undocumented immigrants. Given President Trump’s hard line on illegal immigration, it was likely known that this would be a non-starter for the White House.

Fire From Both Sides

Republicans aren’t the only voices coming out against the bill. A typical headache for Pelosi these days, the far left has also come out in attack of the bill, saying it doesn’t do enough. Though happy with checks for illegal immigrants, they’ve been critical of some pension provisions that are unpopular with labor groups.  They also want to see monthly payments well into 2020.

She had some tough words for them. In a call with her caucus on Thursday night, she told members:
“If you vote against this and all this funding for your state, then you have to go home and defend it. And if you can defend that no vote, then you’re a better politician than me.”

Up Next:

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• Second Round of Stimulus Funding Is on the Way
• Republicans Blast Dems for $3 Trillion Publicity Stunt