All agree on coronavirus stimulus checks, details need to be worked out

Published on

Almost everyone now agrees that the next round of stimulus package should include stimulus checks. Senate Majority Leader Mitch McConnell has already confirmed that their stimulus proposal would consist of stimulus checks. And, we already know that the Democrats’ proposal for the next stimulus package – HEROES Act – includes $1,200 stimulus checks. Even though there is consensus, both Democrats and Republicans are far apart on specific details related to the next coronavirus stimulus checks and other provisions.

Get The Full Series in PDF

Get the entire 10-part series on Charlie Munger in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.

Q2 2020 hedge fund letters, conferences and more

Negotiations to bridge the gap

Negotiations are ongoing between the Senate leaders, Trump administration and Democrats on what the next coronavirus stimulus package should include. These negotiations are expected to bridge the gap between the involved parties.

However, House Democratic leaders say that the Senate needs to catch up. “The House and Senate are pretty far apart in terms of their priorities,” said Rep. Anthony Brindisi, D-New York.

Brindisi is hopeful that the negotiations will address the House Democrats’ priorities. These priorities include helping the unemployed, and providing financial assistance to state and local governments.

Another difference between the two is over the personal protective equipment and testing supplies. Rep. Jim Langevin, D-Rhode Island, says the health care workers are still facing PPE shortages and the next package must address these issues.

There are reports that Republicans would propose funds for testing, but how much it would be, is not clear. Republicans reportedly want $25 billion, but the Trump administration says the $9 billion in unspent funds from the previous package would be sufficient. The two sides reportedly settled on adding $16 billion to the unspent funds to reach $25 billion for testing.

Differences over coronavirus stimulus checks details

Rep. David Cicilline says the HEROES Act, which was passed in mid-May, addresses all the key issues, but the Senate Republicans aren’t taking it seriously.

Republicans, on the other hand, suggest there are plenty of similarities in both the proposals, but some things need to be worked out. Rep. Tom Reed, R-New York, says there is a need to revamp the federal unemployment subsidy.

The current subsidy of $600 a week is too much as it is encouraging many not to take up work. “Assist people during the difficult times, but in no way should it financially disincentivize you to return to work,” Reed said.

There are reports that Republicans are okay with sending $200 a week as a federal unemployment benefit.

Another point of difference between the two is on coronavirus stimulus checks details, i.e. who should get the check and what amount. The HEROES Act proposes a payment of $1,200 with the same income cap as was there in the CARES Act.

Republicans likely favor more targeted stimulus checks this time. There is speculation that they are in favor of sending stimulus checks to those making $40,000 or less.