MNI EXCLUSIVE: Covid Surge Adds Pressure to US Stimulus Bill

By Evan Ryser

     WASHINGTON (MNI) - U.S. lawmakers are under pressure to push forward

another fiscal relief package as coronavirus caseloads spike and local leaders

roll back reopening plans, top political advisers said in interviews, adding

that even a surprisingly positive June jobs report Thursday is not expected to

derail negotiations.  

     Despite President Donald Trump's downplaying the resurgence of cases in the

South and West, there is significant momentum for further fiscal support at the

White House, the advisers said. 

     "Most people in the White House are conceding that there will be some kind

of package probably in mid-July," said former Senator Jim DeMint, an outside

Trump adviser and member of the White House Coronavirus Task Force.

     "Trump understands all this and he is under pressure to do all that he can

to improve the job numbers before an election," DeMint said. "He has got to get

it back going or the Democrats will be accusing him of creating a bad economy."

     --TRILLION-DOLLAR PACKAGE

     Democrats in the House of Representatives have passed a USD3 trillion

package while Senate Majority Leader Mitch McConnell has said he wants a bill

under USD1 trillion and is not open to beginning formal negotiations until after

July 4th.

     "I would expect something in the USD2 trillion-range. Splitting the

difference is not an unreasonable expectation," Rep. Don Beyer, the top Democrat

on the Joint Economic Committee, told MNI. 

     "I don't see Speaker Pelosi or the Senate Democrats going down to a

trillion," Beyer said, adding that the number would not include a USD1.5

trillion infrastructure package that has also been discussed.

     --JULY ACTION

     "It is highly likely that some sort of package comes together in July,"

said Adam Michel, an analyst at the Heritage Foundation and outside adviser to

the White House. "If lockdowns come down again then it could catalyze action

again and could cause them to reassess."

     Tens of millions of Americans who lost their jobs because of the

coronavirus have been able to collect an extra USD600 in weekly federal

unemployment benefits but on July 31 those benefits will end. 

     "If the economy has to shut back down to deal with an increasing Covid

caseload then that will change the perceived deadline bringing it earlier," said

Zach Moller, a former Senate Budget Committee staffer and current deputy

director at the center-left think tank Third Way. "Congress does a very good job

of waiting until they have a forcing mechanism to make a deal." 

     --JUNE JOBS REPORT

     Analysts expect the June jobs report to show nonfarm payrolls rising by 3

million, according to a Bloomberg median, with private payrolls up by 2.66

million. 

     But Beyer said "I don't really see a positive jobs report impacting the

discussion that much." 

     "While the June jobs report may be cited publicly as a way to size the

fiscal path, I don't think it will change it much except for a way to posture

and for outside communication," Douglas Holtz-Eakin said, former director of the

non-partisan Congressional Budget Office and former adviser to Senator John

McCain.

     Rather, lawmakers are more mindful that the stimulus package will be their

last major action before national elections in November. 

     "If something doesn't pass it would be a bloodbath for Republicans in

November," Beyer said.

     "I expect Senator Mitch McConnell is going to look around at Colorado,

Arizona, Montana, Maine, and other states that will have Senate elections in the

fall and conclude that if he walks away and just lets negotiations die then his

other priorities -- such as judicial nominations -- are damaged," Beyer said.

"Fiscal negotiations will be driven by the reality on the ground."

--MNI Washington Bureau; +1 202 371 2121; email: evan.ryser@marketnews.com

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