Business & Economy

On The Money: McConnell brushes off fifth coronavirus bill as Democrats prepare massive plan | Coronavirus cases expanding in states preparing to reopen | Mnuchin: States can borrow to cover revenue lost to coronavirus

Happy Monday and welcome back to On The Money. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.

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THE BIG DEAL—McConnell: No need yet for fifth coronavirus relief bill: Senate Majority Leader Mitch McConnell (R-Ky.) said Monday that he’s in “constant communication” with the White House about the federal government’s response to the coronavirus pandemic but that there isn’t yet a need for Congress to pass additional legislation.

“We’re basically assessing what we’ve done already. I’m in constant communication with the White House and if we decide to go forward we’ll go forward together,” McConnell told reporters. 

“I don’t think we have yet felt the urgency of acting immediately. That time could develop, but I don’t think it has yet,” McConnell added.

Republicans call for pause:

  • McConnell’s comments follow him calling for a “pause” before any additional coronavirus stimulus legislation so that lawmakers can assess the impact of the nearly $3 trillion already appropriated by Congress. 
  • White House economic adviser Larry Kudlow indicated to reporters at the White House late last week that formal talks were likely paused until early June.
  • And President Trump himself said Friday that he was in “no rush” to approve more coronavirus relief aid.

As Republicans take a wait-and-see approach, House Democrats say they could bring members back to vote on their next coronavirus package as soon as Friday.

Speaker Nancy Pelosi (D-Calif.) and House Democrats are charging ahead this week another massive, multi-trillion-dollar package of coronavirus relief designed to protect the economy from the devastating pandemic.

Unlike the Coronavirus Aid, Relief and Economic Security (CARES) Act, this bill will be crafted exclusively by Democrats, which means it will include several provisions that may or may not make it into the final package. Here are eight things to expect, compiled by The Hill’s Mike Lillis and Scott Wong.

 

  • State and local help: The measure is set to include $1 trillion spread across three separate buckets of local government funding: one for states, another for counties, and another for municipalities.
  • Rent and mortgage assistance: Democrats are looking to give more certainty and support to millions of out-of-work Americans who are struggling to pay their rent or mortgage.
  • Cash payments: Democrats are now rallying behind a proposal to give most Americans a monthly $2,000 relief check throughout the duration of the pandemic.
  • Help for workers and businesses: The Democrats’ new aid package is expected to provide hundreds of billions of dollars more to extend expanded unemployment benefits and replenish the Paycheck Protection Program.
  • Broadband: Rep. James Clyburn (S.C.), the Democratic whip, is pushing for roughly $80 billion to expand broadband access in rural, low-income and other vulnerable communities where teleworking and remote learning are difficult because of a lack of reliable internet.
  • Testing, tracing, and treatment: While Congress adopted $25 billion for testing in their last “interim” coronavirus bill, the Speaker says it’s not enough, and CARES 2 will provide billions more.
  • Postal service: Democrats are aiming to include at least $25 billion in aid for the U.S. Postal Service, which is facing bankruptcy thanks to a decline in mail advertising.
  • Nutrition programs: A sticking point in the debate over the initial CARES Act was Democrats’ demand for a 15 percent increase in the Supplemental Nutrition Assistance Program (SNAP).

A group of moderate House Democrats on Monday urged Speaker Nancy Pelosi (D-Calif.) to also include provisions in the next coronavirus relief package that would automatically extend safety net programs including enhanced unemployment insurance, Medicaid and food assistance.

LEADING THE DAY

Coronavirus cases expanding in states preparing to reopen: New coronavirus hot spots are emerging in rural and non-metropolitan counties across the country, including many states that are taking steps to slowly reopen their economies after weeks of stay-at-home orders.

  • A new analysis by Brookings Institution demographer William Frey shows two-thirds of Americans live in counties with a high prevalence of coronavirus spread, where more than 100 cases have been diagnosed per every 100,000 residents.
  • The analysis illustrates the spread of the virus from early epicenters in New York, Seattle, New Orleans and Albany, Ga., into neighboring and more sparsely populated areas, both inside state boundaries and across state lines.
  • More than 40 percent of the population in 39 states live in counties with high prevalence of the coronavirus, such as Arizona, Nebraska, Oklahoma and South Dakota, where the virus has only begun to take a serious toll. More than 45 percent of the new high prevalence counties are in Western states, and 38 percent are in the South.

“There is no doubt that COVID-19 has made its impact felt in ‘red states,’ especially over the past three weeks,” Frey wrote. The fastest spreading of coronavirus through Midwestern and Southern states has come in largely smaller counties, he told The Hill in an email.

The Hill’s Reid Wilson walks us through the data

Mnuchin: States can borrow to cover revenue lost to coronavirus: Treasury Secretary Steven Mnuchin on Monday encouraged states “that have cash flow issues” to take advantage of low interest rates and borrow money to cover revenue lost due to the coronavirus pandemic.

Mnuchin said during a Monday interview with CNBC that President Trump and Republicans are unwilling to support aid for states to handle long-standing financial issues unrelated to the outbreak and suggested that cash-strapped governors turn to a Federal Reserve facility created for local governments.

“There is not going to be bipartisan support that bails out states from previous problems,” Mnuchin said in an interview with “Squawk Box.”

“With interest rates very, very low, states can borrow this money,” he continued, adding that some might need to make deeper spending cuts to comply with balanced budget laws.

I have more here.

GOOD TO KNOW

  • The IRS on Monday outlined several “common scenarios” explaining why some people received a smaller coronavirus relief payment than they expected.
  • Stock markets closed relatively flat on Monday as investors struggled to digest how restarting some parts of public life will affect the economy in the coming months.
  • Top White House trade adviser Peter Navarro fueled speculation Monday that the Trump administration might hit China with more tariffs.
  • Moody’s Analytics economist Mark Zandi is warning that a second coronavirus wave and depression is possible without a vaccine. 
  • The IRS on Monday outlined several “common scenarios” explaining why some people received a smaller coronavirus relief payment than they expected.
  • The Department of the Interior’s internal watchdog has kicked off a probe into whether a top official inappropriately tried to steer coronavirus stimulus funds.

ODDS AND ENDS

  • Elon Musk announced his intentions to reopen a Tesla plant in California on Monday in defiance of state orders, inviting authorities to arrest him for doing so.
  • Former Google CEO and Chairman Eric Schmidt said workplaces will have to make accommodations for social distancing practices as they reopen in the wake of the coronavirus pandemic. 
Tags Donald Trump Elon Musk Larry Kudlow Mitch McConnell Nancy Pelosi Steven Mnuchin

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