Of course, there isn’t actually a Republican bill in the Senate yet, but in a floor speech today Senate Majority Leader Mitch McConnell said “The American economy needs another shot of adrenaline.” McConnell also noted that infections are “climbing in hot spots around the country.”
McConnell, who is still working on a draft of his legislation, said Republicans will back another round of direct payments to individuals and aid for small businesses in their proposal for another package of virus relief. The Republican proposal for an extension of the enhanced unemployment benefits that expire on Friday is smaller than the current $600 weekly benefit and a proposed second round of the Paycheck Protection Program would be “targeted” to businesses most affected by the coronavirus pandemic. McConnell also said that his bill will have about $100 billon to aid schools of safely reopen and some money for child-care assistance and finding for a vaccine.
This all comes as McConnell and other Senate Republicans continue to thrash out a proposal with the Trump White House. President Donald Trump has said he wants a “holiday” for payments of the Social Security payroll tax (there seems to be a lack of enthusiasm among Senate Republicans for that idea) and that he is opposed to any funding for coronavirus testing or for the Centers for Disease Prevention and Control. So far at least there’s no money in the Republican plan for aid to states and cities so that they can keep workers–such as firefighters and teachers–on the payroll. House Democrats put $1 trillion in their bill for state and local aid.
But at least we’re edging toward something that looks like the usual pattern of talks and compromise between the Democratic controlled House or Representatives and the Republican Senate. The wildcard, the thing that could derail any compromise, is a list of supposedly “line in the sand” demands from the White House. If President Trump is serious when he says he won’t sign a bill that doesn’t contain a payroll tax cut or that does contain more money for testing, then we could still wind up with no deal by the time Congress is scheduled to go on recess on August 10. That recess is scheduled to extend through September 7.
So no deal in the next few weeks would likely mean no deal until mid to late September.
The stakes are high, I’d say. (The market was up as of noon New York time on a belief that Congress will deliver some sort of stimulus package.)
Treasury Secretary Steve Mnuchin and White House chief of staff Mark Meadows are scheduled to talk over the Republican plan during the regular weekly luncheon Tuesday with GOP senators. Later in the day they are scheduled to meet with Democratic Speaker of the House Nancy Pelosi and Senate Democratic leader Chuck Schumer.
Early gains faded today with the Standard & Poor’s 500, for example, closing up 0.17% after being ahead 0.41% at noon New York time. Technology shares gave back part of yesterday’s Amazon-led gains with Microsoft (MSFT) down 1.35% ahead of tomorrow’s earnings report and Facebook (FB) of 1.50% at the close. Amazon (AMZN) itself lost 1.83% for the day.
Re-opening dependent stocks, on the other hand, picked up some of yesterday’s losses with Starbucks gaining 0.64% on the day and MGM Resorts International (MGM) up 2.20%. Six Flags (SIX) climbed 2.47% and Carnival (CCL) rose 1.27%.
Banks were strong today with the Financial Select Sector SPDR (XLF) ETF moving up 1.97% at the close. Wells Fargo (WFC) closed up 6.63% today.