As their European counterparts knocked heads for days, finally agreeing on a wide-ranging, 1.8 trillion-euro ($2.1 trillion) relief package to mitigate the effects of a severe recession brought on by the coronavirus, US lawmakers have struggled to come together to create a second program for its business owners and others affected by the economic downturn.
Referring to the gigantic relief package, which is in addition to the regular seven-year, 1 trillion-euro budget for the EU, German Chancellor Angela Merkel stated “We have laid the financial foundations for the EU for the next seven years and came up with a response to this arguably biggest crisis of the European Union.”
While Europe is facing an economic contraction of 8.3%, much of it from a loss of tourist revenues, the US must deal with a similar scenario on its shores while it still deals with high coronavirus infection rates in some states.
The CARES Act, passed by Congress and signed into law in late March, cost over $2 trillion, but accomplished two sweeping and unprecedented goals, granting $1,200 stimulus checks to each eligible adult in the nation and boosting weekly unemployment benefits to those who had lost their jobs by $600 through July 31.
However, because of the way states administer their unemployment systems, the $600 in additional monies received each week now will run out this week, unless lawmakers somehow cobble together a compromise bill.
Faced with the expiration of the first round of federal coronavirus bailouts, the pressure is building for Congress to compromise and somehow pin together a program which will bring much-needed relief to those who are still laid off — and in danger of losing their employer-provided health insurance.
Small businesses in particular are still feeling the coronavirus pinch, since even after opening they must still often limit the number of customers they serve, cutting into — or even destroying — their profit margins.
There are still a great number of unemployed in the US, with unemployment claims over one million for the 17th straight week.
House Democrats have already passed a relief package of $3 trillion but the Senate’s version of the plan amounts to $1 trillion. However, the Senate reconvened on Monday, with another recess slated for August 8, which gives it enough time to discuss a second relief package.
The Democrats’ HEROES Act calls for a second financial stimulus as well as the continuation of the generous federal unemployment benefits through the end of 2020. Republicans termed the second bill unnecessary, considering the much-improved unemployment numbers and the reopening of many businesses nationwide.
However, the rising numbers of coronavirus infections across much of the country, coupled with the fact that businesses in some states have been forced to close their doors a second time, adds to the pressure to create a second relief bill as soon as possible.
President Trump opined that the talks so far are progressing well, after he met with Senate Majority Leader Mitch McConnell, with the possibility that an eventual bill will include a payroll tax cut as a lifeline to businesses.
McConnell has stated that the three weeks that the body is in session will be used to hammer out the new bill. Any legislation that is passed may very well also be linked to states’ willingness to reopen schools in the Fall.
The Washington Post quoted Trump as saying that the payroll tax cut would serve as “an incentive for companies to hire their workers back and to keep their workers.”
A showdown could occur as early as today, with Senate Finance Committee Chairman Charles Grassley, (R-Iowa) admitting on Monday evening that this part of the bill may not find its way to the final act. “I think you’d better ask me after (Tuesday) so we can hear from the administration if they’re really serious about it,” Grassley said.