Congress stalled on stimulus talks as millions face a 'benefits cliff'

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“If we are going to get another round of stimulus, I can’t imagine that won’t be included in it,” said Michael Strain, director of economic policy studies at right-leaning think tank American Enterprise Institute, of a new weekly subsidy.

Strain added, however, that he thinks “it’s far from certain we will get another round.”

No sign of momentum

Senate Majority Leader Mitch McConnell, R-Ky.

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Good luck making that go very far in many areas across the country.

Mark Hamrick

senior economic analyst at Bankrate

But Democrats and Republicans appear firmly entrenched in their respective negotiating positions.

McConnell wants to pass a targeted bill with a total price tag near $500 billion, while House Speaker Nancy Pelosi is aiming for a broader package north of roughly $2 trillion. President-elect Joe Biden has called on Congress to pass a bill before his inauguration in January and has publicly sided with Democrats on the overall size of a package.

Spokespeople for Biden, McConnell and Pelosi didn’t return a request for comment for this story.

“I don’t think there’s any sign of visible momentum,” said Mark Hamrick, a senior economic analyst at Bankrate. “It’s one example after another of Lucy moving the football before Charlie Brown goes to kick it.”

House Speaker Nancy Pelosi, D-Calif.

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Some are hoping that relief measures get attached to a spending bill that Congress must pass by Dec. 11 to avert a government shutdown.

“The most likely thing to move will be that budget [legislation],” said Andrew Stettner, a senior fellow and unemployment expert at the Century Foundation, a progressive think tank.

$600 unemployment boost

An improving economy may change that dynamic, though, and lead such a subsidy to create a disincentive to find work among the unemployed, Strain said. Republicans are more likely to approve a weekly boost in the range of $250 to $400, he said.

That would be in line with prior policies from the Trump White House.

The president authorized a $300 weekly boost via an executive program, Lost Wages Assistance, created in early August. It paid up to six weeks of benefits using federal disaster-relief funds, though hundreds of thousands (largely the lowest earners) were ineligible. Treasury Secretary Steven Mnuchin offered a $400-a-week compromise during subsequent negotiations in October.  

But $400 is likely to be the minimum ask for Democrats, who have backed a second $600 weekly enhancement in any new relief package, according to Hamrick.

“Compromise can take any number of different paths,” he said. “Unfortunately for the economy and the political world, we’re sort of in a pandemic purgatory.”

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