Senate Republicans will supposedly release the actual text of their stimulus proposal at some point later today, but Treasury Secretary Steve Mnuchin has now told us what will or won't be in it.
Mnuchin appeared on Fox News yesterday where he said it would include stimulus checks, liability protection for corporations, and a massive cut for the pandemic unemployment program.
Mnuchin said Sunday that he hopes Congress can work in a bipartisan manner to approve the GOP proposal, which is expected to have another round of $1,200 stimulus checks for Americans and liability protections for businesses and schools among other provisions.
It also will modify the federal unemployment insurance supplement to include about 70% wage replacement for individuals, he said, instead of the $600 boost in weekly benefits for all recipients. That benefit, which was a key component of the $2.2 trillion CARES Act, came to an end over the weekend.
House Democrats have already said they won't agree to cutting the pandemic unemployment program but, just to make an example, let's say they do. What would that mean?
Under the GOP proposal, tens of millions of people would see their income drop below a level that has allowed them to pay their bills and stay in their homes. A wave of evictions and defaults, which could number as high as 25 million, will follow. And there are no jobs to go back to for many people.
Even if you discount the possibility that millions will lose their homes, cutting the program also means taking tens of billions of consumer spending out of the economy every single week. Consumer spending enabled by the pandemic program is supporting jobs that may also be cut without consumer spending.
The last pandemic unemployment payments were processed over the weekend and there will be none next week if congressional Republican statements are taken at face value. Senate Majority Mitch McConnell said he does not even expect to pass something and send it to the House for weeks!
“Hopefully in the next two to three weeks we’ll be able to come together and pass something that we can send over to the House and down to the President for signature,” McConnell told WKTY, a CNN- affiliate station in Kentucky, in an interview published Friday evening.
If they really don't pass anything this week or even in the next two weeks, that means up to 30 million people will see no additional money until the middle of August. They won't see the normal benefit or even the reduced benefit proposed by Republicans; they'll see nothing.
It's difficult to see this as anything other than an economic disaster in the making. The only way out of it would be to temporarily extend the program this week so payments will continue next week.
House Democrats passed a stimulus bill two months ago and Senate Republicans spent the entire summer doing nothing but confirming Trump's court nominees.