The news involving President Donald Trump lately has been far from normal, from his COVID-19 diagnosis to his refusal to take place in a virtual presidential debate with Democratic opponent Joe Biden next week. But what may have gotten lost in the shuffle amid the news cycle is how the President has essentially called off talks of an additional stimulus package until after the forthcoming November 3 presidential election.
This comes just as Democrats and Republicans were reported to have been making progress on a deal, and the announcement also came on the same day the Federal Reserve warned of great “tragedy” if another package was not approved soon.
It’s an odd move for Trump, especially when you consider that one of the positives he has to work off of in convincing the American public why he deserves four more years largely hinges on the economy. Another stimulus package certainly would have helped bolster the economy and solidify the stock market in the near-term. An additional $1,200 check to qualifying Americans could have also scored him some goodwill with undecided voters.
On the heels of Trump’s announcement, the stock market dipped and economic analysts warned that economic recovery is now likely to take place much more slowly. But it’s also important to remember that an additional stimulus package is likely – it’s just a matter of when it will be signed. Here’s what we know about things so far and how they could shake out in the future.
Unemployment Benefits the Big Sticking Point
The big hangup between the two sides appears to be on unemployment benefits. The Democrats proposed a stimulus package worth $2.2 trillion that would provide the additional $600 per week in unemployment through January 2021. The Republican package is $1.6 trillion with a $400 per week enhanced unemployment benefit that would last through the end of the year. It’s estimated that more than 25 million Americans are still receiving unemployment benefits.
What Happens if Democrats Sweep the Election?
Stimulus talks will still depend on whether Trump decides to take them up or if he waits to let the next administration do that upon taking office in January should the Trump-Pence ticket be defeated. If the latter occurs, and if the Democrats also retain the House of Representatives and take the Senate, the stimulus relief package will likely be closer to the $2.2 trillion package the Democrats proposed. If it doesn’t, both sides will have to continue to negotiate until a deal is reached. Again, some sort of deal will be reached one way or the other, it’s just a matter of when and how much.
Additionally, it’s worth noting that a likely sizable infrastructure package will be coming in 2021 regardless of who wins the election and which party is in power in Washington D.C. This too should provide a boost for the economy and aid in the recovery from the pandemic-related recession.