Clock Ticks on COVID Relief

Despite the release of new negative economic data, the fact that bonus unemployment checks have stopped for nearly 30 million Americans, and that suspension of eviction notices has elapsed, Congressional Democrats, Republicans and the White House have yet to find a path forward on new relief legislation

On Thursday, the Commerce Department released figures that during the second quarter U.S. GDP dropped by 32.9% on an annualized level, essentially wiping away five years of U.S. economic growth in a matter of months.  

Furthermore, U.S. jobless claims rose for the second week in a row to 1.4 million – the  19th straight week initial jobless claims exceeded 1 million.  

While the White House and congressional Democrats both indicated they had finally made some progress this past weekend, both sides went out of their way to say a deal was not imminent. In fact, early today, House Speaker Nancy Pelosi told House Democrats a deal did not seem likely this week.  

Significant differences on key points— such as liability protections, unemployment insurance, election funding and support for state and local governments— could easily drag out or scuttle negotiations completely.  

Complicating matters, President Trump tweeted support this weekend for a payroll tax cut – a proposal previously rejected by both parties and not contained in McConnell’s plan released early last week.

If the two sides cannot reach agreement on the overall size of the next package by the end of this week, it will raise serious questions about their ability to do so at all as economic pain mounts daily for millions of Americans.