Its now almost mid-September and we still don’t have any clear idea on when (or if) there will be another round of stimulus checks. Democrats want a bigger package, but Republicans are hesitant to offer a lofty stimulus. One reason for the difference between the two sides is the rising fiscal deficit. Treasury Secretary Steven Mnuchin, however, wants lawmakers to come up with a coronavirus stimulus package and checks without worrying about the deficit.
Democrats want a stimulus package of about $2.2 trillion, down from their initial demand of more than $3 trillion. Republicans, on the other hand, want to keep it down to the minimum. Initially, they proposed a HEROES Act, costing about $1 trillion.
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However, the negotiations failed as both sides were unable to reach a consensus over the cost of the bill. Then last week, the Senate Republicans came up with another proposal that cost even less, about $500 billion. They even voted on it, but it failed to pass the Senate by less than ten votes.
One major reason why Republicans don’t want to give out more money is that many members are concerned about the rising U.S. deficit and deteriorating economy. Thus, to ensure they retained the support of members, Republicans came up with a smaller package of about $500 billion.
Mnuchin now wants lawmakers to come up with a package quickly. This is why he suggested that lawmakers should not worry about the deficit. The Treasury Secretary, who has led the stimulus negotiations along with White House chief of staff Mark Meadows, says that the present crisis needs extraordinary stimulus from the Congress.
“Now is not the time to worry about shrinking the deficit or shrinking the Fed balance sheet,” Mnuchin told CNBC. “There was a time when the Fed was shrinking the balance sheet and coming back to normal. The good news is that gave them a lot of room to increase the balance sheet, which they did.”
Politics blocking relief package
Mnuchin said that though the economy has rebounded following the CARES Act, some parts of the economy need more support.
“The president and I want to have more support to help those American businesses impacted by this,” he said.
Mnuchin noted that there are several points that both Democrats and Republicans agree on, and they have differences on some areas. The Treasury Secretary said he wants to work to resolve the differences.
“I told (House Speaker Nancy Pelosi) I’m available anytime to negotiate,” Mnuchin said.
Mnuchin also blamed Pelosi for blocking the relief package and coronavirus stimulus checks. He suggested that both sides could reach a deal if Pelosi “is willing to move forward,” but she is afraid that any deal would give the President leverage.
“Obviously we have politics that are getting in the way," he said.