Economic indicators in coming weeks could play into the likelihood of a deal during the “lame duck” period between the election and the inauguration of a new Congress and presidential term.
If Trump loses the White House and Republicans the Senate, it’s not at all clear that they will relent on a bigger stimulus that would give an incoming Biden administration surer footing on the economy. If they win there is little incentive to give Democrats anything.
If Democrats do sweep the elections, Pelosi could face a decision about whether to accept a smaller, interim package before a large-scale one early in 2021. House Majority Leader Steny Hoyer this week announced the House would return to Washington on Nov. 16 for its post-election session. Congress already has a Dec. 11 deadline to pass a bill to fund government operations, which could include some selected aid measures.
Interim Deal
“A mini-deal in the lame-duck is most likely,” said Josh Huder, a senior fellow at Georgetown University’s Government Affairs Institute. He predicts legislation addressing narrowed targets with broad cross-party support, such as replenishing the Paycheck Protection Program offering aid to small businesses and supplementary unemployment benefits until February or March, along money for testing and tracing the coronavirus.
Senior House Democratic aides, asking not to be identified as talks between Pelosi and Mnuchin continue, agreed that a mini package could be possible en route to a comprehensive, signature Biden stimulus act in early 2021.
William Hoagland, a former Senate Republican budget director, said the post-election stimulus talks could become entwined with those over a new stopgap government spending measure in December.
House Republican chief Brady agreed. “I hope that it doesn’t take until past the election but if it does I think the Dec. 11 date is the driver to get something to the president’s desk.”
The longer the wait until some fiscal help, the bigger the risk that a slowdown in the economic recovery causes longer-term damage.
“The most serious blow to the economy as the year ends will be the failure of Trump and Congress to agree on more help to those hit hardest by the pandemic,” said Mark Zandi, chief economist at Moody’s Analytics. “It is tough to see how the economy can gain any traction until next year when, we hope, the pandemic and election are in the history books.”
This article was provided by Bloomberg News.