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On Thursday, Columbia University published a study with a grim finding: Since May, as most of the aid from the $2 trillion CARES Act that Congress passed in the spring has dried up, eight million people in the United States have fallen into poverty. “The CARES Act was unusually successful,” one of the study authors told The Times, “but now it’s gone, and a lot more people are poor.”
Congress, after months of gridlock, seems poised to continue doing nothing about it. On Wednesday, Treasury Secretary Steven Mnuchin said that talks with Speaker Nancy Pelosi over more aid remained tense and that he did not expect a package to be approved before the Nov. 3 election.
With millions more hanging on a knife’s edge of financial ruin, some 90 percent of voters want Congress to pass another relief package. Why isn’t it happening?
The deal on the table
The House of Representatives has twice passed follow-up relief packages — a $3.4 trillion one, the Heroes Act, in May and a scaled-back $2.2 trillion version this month — but both went nowhere in the Senate, where Republican members disputed the necessity and cost of additional aid.
After abruptly halting negotiations on Oct. 6, President Trump, recognizing the political peril of obstructing desperately needed relief while running for re-election, has tried to split the difference between the House and the Senate: The White House’s latest offer, which Mr. Mnuchin presented to Ms. Pelosi last Friday, is a $1.8 trillion proposal including the following provisions:
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A second round of $1,200 stimulus checks with an additional $1,000 per child (up from $500 per child)
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$400 enhancement of weekly unemployment insurance benefits (down from the $600 enhancement that expired at the end of July)
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$300 billion for state and local governments
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$300 billion in small-business loans
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$175 billion for health care providers and coronavirus testing, vaccine development and distribution
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$100 billion for student loan, food and housing assistance
While substantially smaller than either of the bills the House passed, it is the largest bid the White House has yet made.
The holdup in the House
Ms. Pelosi promptly rejected the White House’s offer, which she said “amounted to one step forward, two steps back.” In a contentious interview with Wolf Blitzer on Tuesday in which he told her not to let the perfect be the enemy of the good, she responded that the administration’s offer was “not even close to the good.”
Even so, some House Democrats and commentators believe the speaker should accept the $1.8 trillion deal for the sake of those who cannot afford to wait: As of September, employers had hired back less than half of the 22 million workers they laid off in March and April, and the number of Americans filing jobless claims every week, already at a staggering level, has surged in October. Without additional aid, economists warn, the country could enter a downward spiral.
“The risk to waiting is that we may find ourselves in a place where we’re unable to turn back, we’ll hit a tipping point,” Karen Dynan, a Harvard economist, told The Times. Given these stakes, Representative Ro Khanna, a progressive from California, called on Ms. Pelosi to take the deal on Twitter:
So far, however, Mr. Khanna has been the lone public voice of dissent. In private, Ms. Pelosi responded to such concerns by stressing that Democrats had more leverage than ever to extract concessions from the White House.
The election factor
Some of Ms. Pelosi’s critics have suggested that she has ulterior motives for refusing the White House’s offer: withholding from Mr. Trump a much-needed legislative victory until after the election. “I think that definitely is part of the reality,” Mr. Mnuchin said when asked whether that was a possibility.
If that is the case, House Democrats should consider that doing nothing also carries grave risks, Eric Levitz argues in New York magazine. Mr. Trump could very well win re-election, but even if Joe Biden replaces him, Democrats may not be able to take back the Senate. “This means that — if Democrats do not secure aid now — there is a significant chance that Biden will inherit a deepening recession, and no viable means of addressing it,” Mr. Levitz writes.
Even in a best-case scenario for Democrats where they reclaim both the White House and the Senate, it’s unlikely they would be able to push through a relief package until Jan. 20 at the earliest, portending a brutal winter of disease and hardship.
A dead end in the Senate?
If the House took up the White House’s proposal, it could still meet fierce resistance in the Senate. While Ms. Pelosi has criticized the $1.8 trillion proposal for not being expansive enough, many Republican senators have balked at adding as little as $1 trillion to the national debt.
(Many economists, some right-leaning ones and the chair of the Federal Reserve among them, are far more concerned about spending too little rather than too much: In a survey of 25 economists conducted by The Washington Post in July, 20 urged $2 trillion or more in relief, while the remaining five favored roughly $1 trillion.)
For at least some Republicans, the concern appears to be more electoral than fiscal: In a heated phone call between Senate Republicans and top White House officials over the weekend, Marsha Blackburn of Tennessee warned that passing a bill with Ms. Pelosi’s support would amount to a “death knell” for her party’s hopes of retaining the Senate. And on Wednesday, Bloomberg reported that because they expect Mr. Biden to win, Senate Republicans are playing up budgetary concerns now to pave the way for austerity under his administration.
Whatever Republican senators’ motives, some Democrats, Mr. Khanna included, argue that their opposition only strengthens the case for passing the Trump administration’s proposal in the House: Either Mr. McConnell’s caucus will fold, so the thinking goes, or it will face the electoral consequences.
But there is another possibility: Mr. Trump could once again change his mind after Democrats have forfeited their leverage.
“Every case for ‘taking the deal’ I’ve seen so far accepts with a lot more confidence than I can muster that a real deal, which could end up as a law, is actually on the table,” Robert P. Baird, a journalist and contributor to The Times, tweeted. But if Mr. McConnell persuades the president to again reverse course, and if his party holds on to the Senate in November, “then Pelosi is stuck having lowered her ask by more than half a trillion dollars, which leaves out a lot of what she wants.”
The long road ahead
On Thursday, Mr. Mnuchin and Mr. Trump said that they were willing to raise their offer and agree to Ms. Pelosi’s demands for a national testing strategy. But at an event in Kentucky on Thursday, Mr. McConnell once again made clear that he had no plans to yield to Mr. Trump’s insistence to “go big.”
If another relief package never comes, is there any chance the economy will make a full recovery? “Yeah, we’ll get there,” Claudia Sahm, an economist and an expert on recessions, told Bloomberg. “I mean, the American economy is dynamic, we will pull ourselves up by our bootstraps. That was the case after the Great Recession. But there is no reason to make it as slow and painful as what we saw a decade ago.”
Do you have a point of view we missed? Email us at debatable@nytimes.com. Please note your name, age and location in your response, which may be included in the next newsletter.
MORE ON THE MISSING DEAL
“Desperate Americans hit by pandemic beg Congress, Trump to pass economic relief bill” [Reuters]
“The Iron Law of Institutions” [The American Prospect]
“Why an Eviction Ban Alone Won’t Prevent a Housing Crisis” [The New York Times]
“The Politics of Pandemic Relief” [The New York Times]
WHAT YOU’RE SAYING
Here’s what readers had to say about the last edition: How a Justice Amy Coney Barrett could change the U.S.
Harry, 87, from New Hampshire: “So what was the understanding of the term ‘arms’ at the time of the Constitution’s ratification? Certainly the term was not understood to include such weapons as we have today. A literal interpretation of the Constitution gave men the right to bear nothing more than muskets and flintlock pistols.”
Noam, 17, from New Jersey: “The many issues that a conservative Supreme Court would ostensibly endanger point not to problems with the judiciary but with the legislature. For example, Congress has relied on Roe v. Wade instead of actually safeguarding abortion through legislation. Congress must take back its own power if the court is to become what it was meant to be, a body of law, not of politics.”