With conflicting headlines coming out of Washington D.C. daily, OBL breaks down the political calculus driving prospects of a stimulus bill being finalized before the November election.
President Trump has spent the last few days wavering between two conflicting outcomes concerning the prospects of new legislation. He does not want a COVID relief bill that includes a bailout of blue states, but simultaneously wants to achieve a grand deal which in almost all likely outcomes would certainly include a bailout of blue states.
Instead, it is more prudent to focus on whether Treasury Secretary Steve Mnuchin and Speaker of the House Nancy Pelosi will strike some kind of compromise. Large hurdles are differences in the price tags sought by the two parties as well as several significant policy differences. Right now, Senate Republicans are standing in the way of the compromise. Senate leader Mitch McConnell does not have enough votes to get a large spending package through the Senate. As of last count, 20 Senate Republicans are opposed to any large spending bill. It will be interesting to see if President Trump empowers Mnuchin to try to roll Republicans; something he has not allowed yet.
Two different dynamics will be at play in order to get compromise legislation passed. There are 20 days between now and Election Day and Washington is at least pretending that it is going to pass a trillion dollar plus package and confirm a Supreme Court Justice in the lead up. For that to happen, negotiators need a top line number the two sides can agree on and an agreement on the policies within the deal.
Once that happens, they will need to draft the bill which would take three days or so. Speaker Pelosi will then take the bill to House Democrats and Leader McConnell will take it to Senate Republicans. It will then take at least three days to pass in the House in and a week to pass in the Senate, totaling around two weeks for all the moving parts to come together.
President Trump will need to expand serious political capital to achieve a big vote in the House as a signal to the Senate that it has political cover to vote for the package. Trump then needs to work to achieve a substantial and very quick vote in the Senate. Those are massive political hurdles to overcome in the next 20 days. That is why some believe Congress is engaged in a massive game of smoke and mirrors right now. There are political benefits for all parties to seem like negotiations are continuing to happen. President Trump benefits from the stock market responding favorably to signs there is life in the stimulus bill. Speaker Pelosi and Democrats can run on the fact President Trump walked away from the table.