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Why the next coronavirus stimulus bill is still stalled in Congress

Congress is still at an impasse as millions see a sharp drop in their unemployment benefits.

Speaker of the House Nancy Pelosi (D-CA), Senate Majority Leader Senator Mitch McConnell (R-KY), and Senate Minority Leader Chuck Schumer (D-NY) speak at the Capitol.
Brendan Smialowski-Pool/Getty Images

Enhanced unemployment insurance — a key lifeline for millions of workers during the Covid-19 pandemic — has now lapsed, with no clear indication of when it might be renewed.

And in a delay that’s surprising even for Congress, lawmakers’ talks over extending the weekly $600 boost in UI — and approving broader stimulus — remain stalled. As a result, nearly 32 million people are set to see a sharp drop in their UI benefits this week. And depending on the state, weekly UI support could be reduced by as much as 93 percent, CNBC reported July 30.

Congress is also planning to leave for August recess this Friday, putting a tight time frame on next steps. Whether lawmakers are able to reach an agreement by then depends on Democrats and Republicans working through their differences on the scope of the stimulus, as well as Senate Republicans addressing dissent within their own conference.

Thus far, Senate Republicans have been a major source of delays. While House Democrats passed another round of stimulus in May, for example, Senate Republicans didn’t even introduce a bill until last week. And even then, internal GOP fractures over the need for more funding have limited Republicans’ ability to present a united front, further muddling negotiations.

“We’re trying to get them to a coherent position,” Senate Minority Leader Chuck Schumer said last July 29. “We don’t even know what their position is. One senator says one thing. One senator says another. The president says ‘this’ one day. The president says ‘that.’”

Late Thursday, July 30, the White House made a last-ditch attempt at approving a short-term extension of the UI program, which Democrats rebuffed as an attempt by Republicans to get out of doing something more comprehensive. Republicans now argue that Democrats are blocking progress on UI, while Democrats decry the maneuver as a way to avoid confronting the need for broader stimulus.

“They never have understood the gravity of it,” Speaker Nancy Pelosi said Thursday. Congressional lawmakers, as well as Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows, are poised to continue negotiations in the coming days as they seek to find an agreement on UI, funding for states, and liability protections for businesses.

In the meantime, millions of people are left wondering what’s next.

How we got here

Republicans have been dragging their feet on stimulus for weeks.

Although Democrats approved the HEROES Act — their opening bid for the next package, which included a six-month extension of the $600 weekly UI expansion — more than 10 weeks ago, Republicans have long argued that the economy will recover on its own as states reopen.

I think conditions are definitely going to improve. We’ve seen the virus take down the best economy in the world, but it looks like it’s pretty resilient and starting to come back,” Sen. John Cornyn (R-TX) told Politico in early June.

Because of this, Republicans weren’t interested in considering more stimulus until it became it impossible to ignore that state reopenings weren’t going as planned in July, due to a resurgence in coronavirus cases. Even then, members who were worried about the national debt remained unconvinced.

“The majority of Republicans are now no different than socialist Democrats when it comes to debt,” Sen. Rand Paul (R-KY) wrote in a July tweet criticizing Republican spending plans.

Given the dissent within the party, it wasn’t until Tuesday, July 28, that Senate Republicans unveiled pieces of their bill, the HEALS Act, which would authorize another round of stimulus checks and a reduced UI expansion aimed at matching 70 percent of a worker’s preexisting wages.

According to Sen. Lindsey Graham (R-SC), many Republicans aren’t expected to get on board with this narrower proposal, either. “Half the Republicans are going to vote ‘no’ to any more aid,” Graham said during a Fox News appearance in July. “That’s just a fact.”

As Senate Republicans have been grappling with their differences, the White House has focused on pushing its own priorities. While McConnell has repeatedly highlighted liability protections for businesses as an important redline, for example, the White House has signaled a willingness to approve a deal without them, according to the Washington Post. Additionally, the administration has sought the inclusion of unrelated measures like funding for a new FBI building, which McConnell has since opposed.

Ultimately, Republicans’ disjointed front led to a slew of negotiations that didn’t really go anywhere.

In recent days, the White House has sought to cast blame on Democrats by framing them as obstructionists for rejecting a temporary extension of UI support, a message that Meadows pushed on July 30.

“It surprises me that when we talk about compassion and caring about those that truly are in need, that a temporary solution to make sure that unemployment — enhanced unemployment — continues has been rejected not once but multiple times,” Meadows told reporters.

Democrats, however, worry that agreeing to a short-term extension means there won’t be any urgency for Republicans to consider a more comprehensive stimulus package — which the economy still needs. Pelosi noted that Democrats were reluctant to back a short-term proposal, with no larger compromise on the horizon.

“There would be a time for that — if we had a bill. What are we going to do in a week?” she said Friday.

Moreover, because final negotiations had been pushed so close to the July 31 expiration of enhanced UI, it would have been weeks before states could actually implement the extension. That’s not to say lawmakers shouldn’t have considered one; it speaks more to the fact that Republicans delayed acting for so long that UI recipients would have faced a gap in benefits no matter what.

For any bill to pass Congress, both Republicans and Democrats will have to buy in. The legislation will require the agreement of the majority of House Democrats, as well as the support of at least seven Senate Democrats, if the Republican caucus sticks together. Since Senate Republicans are expected to split on stimulus, it’s likely they’ll need even more Democratic support to get anything through this week.

There’s a lot at stake in this stimulus bill

The extension of unemployment insurance is just one of a long list of things that are at stake in the next stimulus bill. Funding for states and more coronavirus testing, as well as another round of stimulus checks, are among a slew of pressing provisions that lawmakers still need to work through.

Since it lapsed, the focus on UI has been front and center.

UI support has helped curb or halt a surge in the country’s poverty rate, per a study by researchers at the University of Chicago. And according to the Committee for a Responsible Federal Budget, both supplemental UI and the first $1,200 stimulus check expanded people’s disposable income from 5 percent to 7 percent between February and May.

This support has helped maintain a healthy level of consumer spending, which has, in turn, bolstered roughly 5 million jobs, the Economic Policy Institute found. If the enhanced UI fully lapses in the coming month, the fallout for individual households and the broader economy will be significant.

House and Senate Democrats are also intent on this coronavirus funding package targeting aid to states, cities, and towns, many of which had to dial up their own spending to try to curb the virus even as revenue from lost sales and income taxes dried up.

“The last recession felt like running down a hill,” Phoenix Mayor Kate Gallego told Vox’s Emily Stewart in April. “This one feels like falling off a cliff, it happened so quickly.”

Skip ahead to July, and the situation is still bleak. Far from Covid-19 infections falling in the US, multiple hot spots have broken out around the country. The US has over 4.6 million confirmed cases, and more than 154,000 people have died, according to Johns Hopkins’s tracker. Yet with Congress stalling on a new bill, states are getting no new federal assistance, forcing many to consider cuts to other social services, including funding for public schools and universities. Money for public education support has never been more critical; some schools and colleges are set to open up at the end of the summer, while more will start the year with remote school.

The new stimulus, too, is intended to contain funding to help schools cover the necessary protections and precautions needed for reopening, as well as more money for both coronavirus testing and contact tracing, which will be crucial to get the public health crisis under control.

There are major implications for the general election

With the general election just months away, the pressure is growing on both parties to reach a deal.

Democrats may be able to point to the Republican delay thus far, but both parties are poised to face immense pushback from the public if stimulus continues to stall. And President Donald Trump will have to navigate voter backlash if economic conditions don’t improve. According to polling by CNBC/Change Research, 62 percent of voters in battleground states support extending enhanced unemployment insurance.

The stimulus limbo could also have a notable impact on the operations of the election itself, since states desperately need more funding to help facilitate vote-by-mail and other changes forced by the pandemic.

States also have to figure out how to run their elections in an unpredictable year with little assistance from the feds. The summer primaries have painted a worrisome picture: Many states are woefully underprepared for a 2020 general election in the age of Covid-19. States that have had universal vote-by-mail or no-excuse absentee voting in prior years should be in a better position to handle the high turnout of a presidential year. But it will be more difficult for states that are moving to no-excuse absentee voting for the first time to get up to speed and hold safe in-person elections by November 3.

“They almost have to run two elections instead of just one. It’s quite the challenge,” elections expert Ned Foley, a constitutional law professor at the Ohio State University Moritz School of Law, recently told Vox. “Looking at the primaries, unfortunately they show we have serious capacity challenges we are not yet ready for and we are really running out of time.”

With in-person voting, the main challenges have to do with staffing and physical space. Poll workers tend to be older or retired, and some are choosing not to volunteer at their polling place for fear of contracting Covid-19. This has caused some states and municipalities to close certain polling locations, which results in long lines at the places remaining open.

States trying to adapt to vote-by-mail systems in a short amount of time need to secure contracts with third-party vendors to print ballots, envelopes, and instructions for voters. States that are new to the system may also need to purchase costly equipment to scan and count votes in a timely manner because they simply don’t have enough people to process a crush of returned ballots.

The primaries so far have shown tremendous appetite from voters to cast their ballots by mailing an envelope. In the 2020 primary, Georgia saw nearly 1.5 million requests for absentee ballots, according to the Georgia secretary of state’s office. In the 2016 presidential primary, the state got just 45,000 requests for absentee ballots, according to a Brennan Center report.

Worries also abound about the state of the US Postal Service, which is chronically in debt due to a 2006 law mandating it prepay its employees’ retiree benefits. The Post Office has asked Congress for financial help to no avail; Republicans seem intent on cutting costs there instead of giving it more money. Elections experts fear that recent changes to the USPS mail delivery times ordered by Trump donor and new Postmaster General Louis DeJoy could cause further delays for Americans casting their ballots absentee.

“For tens of millions of Americans, they’ll have their ballot handed to them by a postal worker, not a poll worker,” Tammy Patrick, a senior adviser on elections at the nonpartisan foundation Democracy Fund, recently told Vox. “They’re not getting the same sort of support from Congress and from the administration that we’re seeing fast-food restaurants get or some of these other service providers and markets.”

Congress allocated $400 million to states in the CARES Act it passed this spring, but many states spent most of their money to prepare for their summer primaries, and Congress has yet to pass more federal funds to help them prepare for the election by recruiting younger poll workers and expand their absentee mail capacity.

“It’s not that we’re doing five extra things with the money, it’s more of the things we’re doing now,” Minnesota Secretary of State Steve Simon told Vox. “To minimize the risk of something going wrong, more resources would be appreciated.”

Although Democrats had allocated $4 billion in the Heroes Act to help states on this matter, Republicans have shown little appetite for boosting election funding. And without bipartisan agreement on the issue, states may be left on their own to figure out how to safely and securely conduct an unprecedented election.