House Speaker Nancy Pelosi issued a 48-hour deadline to strike a deal on a COVID-19 relief package if federal aid is expected to reach Americans before Election Day.
Pelosi stated she and the White House are at an “impasse” over a bipartisan deal that’s expected to send $1,200 checks to most Americans. “We don’t have agreement on the language yet,” Pelosi said.
Much of “that language” revolves around contact tracing and testing requirements for COVID-19 infections.
As negotiations between Pelosi and Treasury Secretary Steven Mnuchin make little progress, the Senate is set to vote this week on a $500 billion “skinny” recovery bill that does not include stimulus checks.
Not Likely to Happen?
Senate Majority Leader Mitch McConnell said a coronavirus stimulus package is “unlikely in the next three weeks.” He described the situation as “murky” because negotiations involve people looking for “political advantage”. “I’d like to see us rise above that as we did back in March and April, but I think that’s unlikely in the next three weeks,” McConnell said on Friday.
White House spokeswoman Alyssa Farah said President Donald Trump wants a “skinny” coronavirus relief bill that includes elements such as direct payments and a bailout to the struggling airline sector that the president remains committed to.
“We’d like to see sort of a skinny piecemeal bill if we’re able to get that, that will deal with PPP and with direct payments. But we’re open to going with something bigger, but we’re not going to operate from the 2.2 trillion that the speaker laid out.
Reaction from the stock market and stimulus
The Dow Jones Industrial Average was up 112 points, or 0.4%, at 28,538, as of 9:45 a.m. Eastern time on Friday, and the Nasdaq composite was 0.7% higher.
Much of this week’s focus has been on Washington, where President Trump sent markets on a sudden skid Tuesday after he halted negotiations on a support package for the economy until after the election.
Hinting at what’s to come?
Investors have been seeking a stand-alone bill for aid since the expiration of extra benefits for laid-off workers that Congress approved earlier this year. Any bill related to such aid is one that President Trump has publicly stated he would sign right away.
Despite whether or not Washington can strike a deal before the election, investors are becoming optimistic about the chances for a big support package in 2021. Despite the months’ long bickering, if Democrats sweep the White House, Senate, and the House, it’s likely that they will approve stimulus for the economy. That could help offset higher tax rates and tighter regulations on businesses that investors also expect from a Democratic-controlled Washington. Wall Street is seeing a Democratic sweep as more likely than before.