Lawmakers mostly agree another coronavirus stimulus package is needed to boost the economy amid the coronavirus pandemic. But that is about all lawmakers from both parties agree on, Axios reports.
Republicans and Democrats are sharply divided on what the next stimulus package will look like.
Democrats already passed the $3 trillion HEROES Act through the House in May, which has been slammed by Republicans. Now, Senate Republicans will meet at the end of the month to come up with their version. Senate Majority Leader Mitch McConnell has said his office would draft the next package.
Benefits awarded through the CARES Act are set to expire at the end of this month. That means a temporary increase in unemployment payments to more than 33 million Americans will go away, unless the next package extends the extra payment.
“Regardless of your politics, the enhanced unemployment benefits expire at the end of July and there’s still too many unemployed," Societe Generale U.S. chief economist Stephen Gallagher told Axios. "The government is just obligated to continue to offer more support."
It is that extra payment to Americans out of work that is one of the sticking points between the parties. Republicans say the unemployment rate has remained high because jobless benefits are too generous.
“A lot of people have sort of rationally said, 'I prefer to keep getting the [unemployment] benefit for as long as I can because I'm making, 100 or 150 or 200% of what I made at work,'" a Republican aide familiar with the stimulus talks told Axios. "So we definitely see that as a significant bug and we don't want to repeat that mistake."
But Democrats say people don’t have jobs to return to and without the extra $600 weekly payment, many Americans face the possibility of poverty and even homelessness. The HEROES Act extended that extra payment and focused getting money to state and local governments.
A senior Democrat aide said many liberal lawmakers felt the Trump administration didn’t do a great job getting financial aid to hospitals and medical providers in need.
Republicans say they want the next stimulus to focus on liability protection for companies and assistance to small businesses.
Rather than extend unemployment benefits, they prefer to see a tax cut or a bonus incentive paid to laid-off employees who return to work.
Republicans also say they want to review what went wrong from the CARES Act.
One of the topics up for discussion will be the Paycheck Protection Program. A new report from the National Bureau of Economic Research states the program “spent vastly more money than the number of jobs it saved," and has more than $125 billion in funds left over. In addition, a $500 billion loan program for larger companies remains more than 90% funded.
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