New economic stimulus package could arrive sooner than expected
Some senators are signaling that they will not pass federal budget before an economic stimulus bill is passed
BRYAN, Texas (KBTX) - On Friday, the Senate passed a stop-gap spending bill to prevent the federal government from shutting down. The federal government was set to shut down at midnight if the bill had not passed. The one-week spending bill gives Congress until next Friday to pass a comprehensive spending bill, often referred to as an omnibus bill, to fund the federal government until September.
But some congressmen and women have signaled that they will not approve an omnibus spending bill until an economic stimulus package is passed.
First News at Four sits down with Texas A&M political economist, Raymond Robertson, to get a better idea of where Congress stands on both issues.
Robertson says the stop-gap spending bill passed earlier today is good, in that it prevents a government shutdown. But he adds that it’s not the best way to handle what roughly equates to the federal budget.
“Ideally Congress would agree to an omnibus spending bill before the fiscal year begins,” Robertson says, “but y’know we’re in a hyper-partisan environment right now, and members of Congress adopt this winner take all approach”
“So compromise is rare.”
He says the National Defense Authorization Act, also passed earlier today, contributed to slowing negotiations for an omnibus bill along with other appropriations that could not be agreed upon.
So Congress will have to either approve the omnibus bill before Friday or negotiate another spot-gap spending bill.
That’s where some senators see leverage to use. According to the Washington Post, Senators Bernie Sanders (I-VT) and Josh Hawley (R-MO) say they won’t approve an omnibus bill, nor a stop-gap spending bill before lawmakers vote on a stimulus package featuring stimulus checks for taxpayers as the economy continues to weaken.
Robertson says he thinks that’s unlikely.
“Maybe not before the [omnibus bill] gets passed,” Robertson explains, “the risk on moving on the stimulus package first is a government shutdown.”
He says if the government were to shut down, it will only make our economic situation worse. Robertson says the 2018 government shutdown caused our national GDP to shrink and if that were to happen, it would compound an already bad economic state. Robertson explains that there are still some sticking points in the economic stimulus package that’s being negotiated in Congress right now.
“The main issues are the direct relief payments to people like the CARES Act we saw earlier this summer,” Robertson says, “aid to state and local governments, and corporate liability protection from COVID lawsuits.”
He says Congress is mostly divided on the amount the should be in direct stimulus payments. Robertson says the numbers he’s hearing are $1,200, $600, and some Congress men and women are pushing for no economic stimulus checks.
However, Robertson says in a comprehensive review of economic literature on the economic effects of COVID-19 he conducted over the summer, he found that most economists agree the direct stimulus payments were very effective. Robertson says if this economic stimulus package is not passed by Congress, they could still potentially have a different economic stimulus bill passed before the end of the year.
“Congress could stay in session a while longer to work towards passing a bill.” Robertson explains, “They really want to get a bill passed because there’s signs the economy is weakening again.”
Talking to Robertson earlier this year, he said he believed a second economic stimulus package was likely by the end of the year. Now, that prediction seems to be in jeopardy. But Robertson says he understands why it took so long.
“There’s actually two reasons and I think both of them are pretty positive really.” Robertson explains, “for one, throughout the summer, the spread of COVID actually slowed down a bit, and for a long time, deaths and cases were basically declining. So people started getting more comfortable, they started going back to work, and the economy was recovering. So unemployment was falling, new jobless claims fell from that almost 6,000,000 peak we saw in April to down to about 760,000 which was obviously a lot higher than the 200,00 before the crisis.”
But now, he says, the economy is in a tenuous spot as COVID-19 cases are rising at an unprecedented level. He says it’s reasonable to assume as cases rise like at the start of the pandemic, the economy will begin to suffer again.
“But with the new vaccine that has just been approved,” Robertson explains, “we have reasons to be optimistic.”
“So let’s keep hoping.”
Watch the full interview in the player above.
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