Trump, McConnell, and Republicans Draw a Hard Line on COVID-19 Relief Bill

Strategic Insights -

President Trump and Senate Majority Leader Mitch McConnell are digging in their heels on the COVID-19 relief bill, pushing for a payroll tax cut and liability protections for businesses, while Democrats strongly oppose these measures. Senate Republicans are also exploring new limits on emergency unemployment benefits, which would effectively cut taxes for people who have jobs while cutting benefits for the unemployed.

Key Takeaways:

  • Trump stated he would consider not signing the relief bill if it doesn't include a payroll tax cut, despite Democrats' strong opposition and some Republicans' coolness to the idea.
  • McConnell has repeatedly insisted that liability protections for businesses, health-care providers, schools, and others must be included in the bill, which Democrats also oppose.
  • Senate Republicans are exploring new limits on emergency unemployment benefits, which would reduce the benefit from $600 to between $200 and $400 per week.
  • The GOP bill is likely to cut taxes for people who have jobs while cutting benefits for the unemployed.
  • The legislation is expected to give state and local governments more flexibility to spend money they were already appropriated, but will not include any new aid for states and cities, as demanded by Democrats.
  • Republicans are seeking to curb the current infusion of federal spending on unemployment benefits, and are exploring measures to target the additional benefits to those further down the income distribution.
  • The unemployment rate in June was 11.1 percent, down from a recent peak in April but still higher than at any other point in recent history.

Statistics:

  • $1 trillion: The estimated size of the forthcoming stimulus bill, according to White House Chief of Staff Mark Meadows.
  • $600: The current weekly unemployment benefit threshold, which is set to expire as soon as this week.
  • $200 billion: The estimated amount GOP lawmakers are considering spending toward unemployment benefits through the end of the year.
  • 18.8 million: The estimated number of unemployment claims that had been paid as of the end of May.
  • 33 million: The estimated total number of unemployment claims.
  • $3 trillion: The estimated total spending for the previous four coronavirus aid packages.
  • 30 million households: The estimated number of households that would receive financial assistance from extending the $600-per-week unemployment benefit.
  • 11.1%: The unemployment rate in June.

Sources:

  • "Fox News Sunday" interview with President Trump (no date provided)
  • "Fox Business" interview with Larry Kudlow, White House senior economic adviser (July 24, 2020)
  • House Democrats' bill passed in May (no date provided)
  • CNN (no date provided)
  • Axios (no date provided)
  • Fox News' "Sunday Morning Futures" (no date provided)
  • The Century Foundation (no date provided)
  • Upwork (no date provided)
  • Treasury Department (no date provided)