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This weekend, after initially pulling out of stimulus negotiations, President Donald Trump seemed to say he wanted back in. Economic adviser Larry Kudlow even suggested basically handing House Speaker Nancy Pelosi a blank check. But no one seems to agree on the exact terms; Treasury Secretary Steve Mnuchin and Senate Majority Leader Mitch McConnell are offering and saying completely different things. But the important thing is that a White House deal now appears to be on the table, one far more substantial than Senate Republicans’ “skinny” relief. And Jordan Weissmann, Slate’s senior business and economics correspondent, thinks Democrats need to take it now: “If we do not have a deal, a lot of people are going to suffer this winter. … We’re past the point where we should be allowing the perfect to be the enemy of the good.”
On Wednesday’s episode of What Next, I spoke with Weissmann about the White House’s new stimulus proposal, the political warfare that’s dogged this process, and why it’s imperative for Democrats to stop worrying and love the new offer. Our conversation has been edited and condensed for clarity.
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Mary Harris: The last time you were on, you were basically saying there’s no chance a coronavirus stimulus passes because the government is just too stuck. What changed since then?
Jordan Weissmann: Mnuchin made a $1.6 trillion offer. He did so right at the moment when the stock market was actually wobbling a bit—part of the reason was that investors began to realize maybe a bill wasn’t coming—and it’s getting close to reelection time. I have a theory that the White House looked at what was happening to the S&P and thought to make one more push for relief. I think that what also changed was the complete chaos with Trump getting COVID. After he got sick, he came back and pulled the plug on negotiations. Then people told him that it looked bad and he overcompensated by going the other direction, saying “throw as much money as you want.” So the White House got a bit nervous because the markets weren’t looking so good, poll numbers for the election weren’t so great, and Trump has been having a perpetual freakout ever since.
Can we talk about the shape of the recovery? It seems like white-collar workers are doing OK, but others are not. Who is really feeling the impact right now?
Data from researchers at Harvard’s Opportunity Insights project suggests that workers who make more than $60,000 a year are staying white-collar: They can telecommute, and they’re almost back to full employment. People who make between $30,000 and $60,000 are still hurting, but it’s not totally catastrophic. It’s really low-wage service workers, people under that $30,000-a-year range, who are still seeing double-digit declines in employment. What’s still closed? Restaurants, bars, gyms—these service industries that are high-touch and that people aren’t going to right now are still officially shut down.
Are there any good studies looking at how long that unemployment could last, and whether doing a deal now could benefit folks not just for the next few months but longer?
As long as restaurants are shut down or only serving half their tables, as long as concerts are banned, you’re going to have fewer workers. With the recovery, eventually you hit a wall where certain jobs are really, really hard to bring back as long as we have a pandemic ongoing. So a lot of those people are still stuck on temporary furlough. And we don’t know how long that will last. At the same time, you have this other worrying trend where more of these “temporary layoffs” have become permanent—you look at that number and it’s been rising over time.
We have obvious problems ahead of us. We’ve already started to see rehiring slow down in the last jobs reports. If you don’t give people aid, if you don’t provide larger unemployment benefits or send people checks, eventually they’re going to have a hard time just paying their bills. We had huge shotgun blast of money at the beginning, with the CARES Act, that kept people afloat. But if Congress doesn’t do something more, we’re facing much more danger.
Could we talk about the political motivations for the negotiating parties here, why they would want a bill and why they would not? The president wants a big stimulus because it’s nice to have checks going out right before an election. Why would Republicans in the Senate not want that?
There are some Senate Republicans who just do not like to spend—ideologically, they are opposed to government intervention. And some of them fear that conservative voters will be pissed off. I don’t think, in a general election, any candidate is going to be really harmed by voting for a massive relief bill. It could hurt them in the future, though, in a Republican primary. That is probably weighing heavily in the back of their minds, that in a couple years they could be in a primary and someone accuses them of profligate spending and giving to the Democrats and and “bailing out blue states,” whatever.
What about the Democrats?
Pelosi could get a pretty damn good bill at this point. A trillion-dollar bill is very close to the $2.2 trillion she’d been asking for.
Even Kudlow said the president wants to offer more than Nancy Pelosi.
She could probably get what she wants from Donald Trump if she said yes, it seems like. I don’t understand why you wouldn’t at least throw it to the Senate and say, “Are you going to deny aid to millions and millions of unemployed Americans?” If they sign the deal, great—Pelosi got pretty close to what she wanted to get. If they don’t sign the deal, she can continue attacking McConnell for it, just make him own that at the very least, pin it firmly on him and the Republican Party.
On Tuesday, McConnell announced that he was going to try to push through a $500 billion package again. At the same time, the president was tweeting, “STIMULUS! Go big or go home!!!” You think this is the perfect time for the Democrats to forge ahead?
It could be good for them to get a deal at the White House, on the condition that Trump starts putting the screws to Mitch McConnell. Why not? Why not put Republicans in even more disarray heading into November? Worst comes to worst, the Republican Party passes the deal and states and families and businesses get needed money. It doesn’t really seem like there’s a bad option here in taking more or less what the White House has on offer. You can negotiate specific things, like how the White House wants liability protections that will prevent workers from suing their employers if they get infected with COVID on the job. I don’t love that. But you can negotiate. And the basic shape of what’s on offer looks pretty good. It covers most of the bases. It seems like this is something that the House Democrats should want to do.
Do we have evidence that the president is willing to compromise on things he may not want to spend money on, like sending aid to New York and California?
The White House has compromised on a few major issues. For instance, it’s offering $300 billion now for states and local governments. It’s not exactly what Democrats want—they wanted closer to $450 billion—but it’s most of the way there. Democrats originally wanted $600 a week in unemployment benefits. The White House is offering $400 through January. That is not $600, but it’s definitely enough to replace the income that a lot of these laid-off workers have lost. It’s not a perfect deal, but it does tick off a lot of the boxes.
You read about what’s going on with people who haven’t been able to get unemployment benefits or had their benefits run out—they’ve ended up in really dire straits. It doesn’t take a lot of sophisticated analysis to figure out that the longer we go without more help, the more people are going to suffer.
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