Coronavirus economic stimulus bill: Pelosi hints further trimming her offer?

Updated on

There were reports yesterday that Republicans are planning to come up with a trimmed-down version of the coronavirus stimulus bill. Now, it is being reported that House Speaker Nancy Pelosi could be willing to make more cuts to their coronavirus economic stimulus bill to reach a deal with Republicans.


Get The Full Seth Klarman Series in PDF

Get the entire 10-part series on Seth Klarman 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

No clarity on coronavirus economic stimulus bill

Speaking at a Politico Playbook event on Tuesday, Pelosi said they could agree on slashing their bill in half to come up with a relief package. Further, she noted that they would pick up additional demands later.

“We’re willing to cut our bill in half to meet the needs right now,” she said. “We’ll take it up again in January.”

However, Pelosi’s spokesman Drew Hammill later said that Pelosi was referring to meeting Republicans “halfway” and not “cutting our bill in half.”

Pelosi’s words clearly did not mean what Hammill in saying, but we haven’t heard from Pelosi since. Previously, Pelosi has offered a compromise around the $2 trillion mark.

Democrats-backed HEROES Act costs about $3 trillion, while the Senate’s HEALS Act is worth over $1 trillion. Pelosi, previously, said that Democrats are willing to cut their proposal by $1 trillion if Republicans move up by $1 trillion. Republicans, however, rejected the offer.

One sticking point between the two sides is the aid of almost $1 trillion for state and local authorities. President Donald Trump, however, opposes it saying it would reward the poorly run states.

Treasury Secretary Steven Mnuchin, on Tuesday, also hinted that negotiations may resume over the coronavirus economic stimulus bill later in the week. Mnuchin noted that since the House is scheduled to return to session to take up a vote on the Postal Service legislation, both sides can use this opportunity to resume negotiations on the relief package.

“Since Speaker Pelosi is coming back to look at Postal, hopefully she will be more interested in sitting down,” Mnuchin told CNBC.

Bill to reinstate unemployment benefits

Separately, a group of House Democrats yesterday urged Pelosi to vote on a bill that would extend the unemployment benefits. In a letter, the group asked Pelosi to vote on the legislation to reinstate the $600 federal unemployment benefit, which lapsed last month, and then phase it out as the unemployment rate drops.

“We owe it to people waiting to get back to work across the country not only to extend unemployment benefits to help them pay their bills, but to tie these benefits to economic conditions so workers are not held hostage by another cliff like this one,” the letter said according to CNBC.

The House left for the August recess a couple of weeks back after both sides failed to reach a deal by August 7. Now, the House will return on Saturday to vote on a Postal Service bill that could assist in mail-in voting.