Many believe that talks for another coronavirus relief package may resume this week. However, it is possible that there might not be any serious talks this week, as well as next. One reason for this could be because the White House Chief of Staff, Mark Meadows is out for the week.
Q2 2020 hedge fund letters, conferences and more
A report from Politico noted that there is unlikely to be any serious talks this week, partly because Mark Meadows "is out for the week.” This means that the fate of millions of Americans is on hold, even partly, because one person is not coming to the office.
Gates Capital Management's ECF Value Funds have a fantastic track record. The funds (full-name Excess Cash Flow Value Funds), which invest in an event-driven equity and credit strategy, have produced a 12.6% annualised return over the past 26 years. The funds added 7.7% overall in the second half of 2022, outperforming the 3.4% return for Read More
The report gave another bigger reason for no talks over another coronavirus relief package. As per the report, there would be no talks because the administration presently believes that it has the upper hand after President Donald Trump came out with executive orders over the weekend.
Trump, on Saturday, issued executive orders for enhanced unemployment benefits, student loan relief and an eviction moratorium. This means, even if Meadows returns to the office next week, it could still take some time for the Senate to vote on the next package.
“One official said the White House feels it has Democrats in a ‘real pickle’ and if they try and block the executive actions they will look like they are trying to hurt people,” Politico reported.
Further, the report notes that in the absence of any unexpected event, such as a bad jobs report, or market sell-offs, it could take weeks before any serious talks resume over another coronavirus relief package.
As per the report, “there is little in the way of a forcing mechanism to get the parties back together to come up with a compromise deal.”
Does White House have leverage?
Unlike the White House, many believe that Trump’s executive orders may not provide any real leverage to Republicans. Critics argue that the executive orders won’t help much economically, and thus, would put Trump and the White House at a disadvantage when negotiating for another coronavirus relief package.
Many prominent groups have questioned the effectiveness of the executive orders. In a statement, the National Governors Association said they appreciate the intent, but are concerned about the administrative burdens and costs it would put on the states.
Separately, the U.S. Chamber of Commerce in a statement also appreciated the intent, but noted that they are “no substitute for congressional action.”
Many state governors have raised concerns over Trump’s executive order to extend unemployment benefits. When CNN asked Governor Mike DeWine if his state could afford the new unemployment benefit, he said, “The answer is, I don’t know yet.”
In a tweet, Governor Andrew Cuomo also questioned the effectiveness of the executive orders. Cuomo said, “Executive Orders can’t replace legislative actions,” and it is “impossible” for states to pay 25% of unemployment costs.