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Unsanitized: The COVID-19 Report for Nov. 5, 2020

What Does the Election Mean for Stimulus?

It means a smaller set of relief, unfortunately, though that's better
than gridlock

 

The economy needs a lot, and it's poised to get... a little. (Gabriele
Holtermann/Sipa via AP)

First Response

I am returning to the coronavirus beat today, and look what's here to
greet me: 100,000 new cases in a day
,
the first time that has happened. I'd have thought it'd be more
poetic for that to occur on Election Day, but alas, it was the day
after. And with Donald Trump finally treating something like a war-the
recount of votes

that didn't choose him for president-I would expect no policy
changes from the top or even in the states to get a handle on this. We
are riding without brakes, headlong into a fantasy of herd immunity. The
vaccine couldn't come sooner, because common sense won't save us.

You can expect some economic erosion to accompany the case spike, even
if it was just through lower productivity from those infected and
sidelined. Of course, you would expect a demand depression as well, as
at least some people hole up in their homes and stay out of restaurants
and stores.

The economic indicators I've been looking at this week have definitely
made me anxious. AMC Theaters, with sales revenue down 91 percent
, is
desperately trying

to fend off bankruptcy, while two major mall landlords filed for it
.
So did Friendly's
,
the east coast ice cream chain of my youth. Nike is the latest large
employer to cut jobs at its headquarters
.
Weekly initial unemployment claims just aren't going down that much
,
and there are 21.5 million Americans
receiving
some form of unemployment.

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More than half of those unemployment recipients will lose benefits
completely at the end of the year. Two programs created by the CARES
Act-Pandemic Unemployment Assistance (for gig workers and independent
contractors) and Pandemic Emergency Unemployment Compensation (extended
benefits)-currently cover 13.3 million people, and they expire
December 31.

So it's therefore interesting, and important, that Mitch McConnell is
now calling an economic relief package his top priority in the lame duck
session

that will begin next week. "We need another rescue package... and we
need to do it before the end of the year," McConnell said. This is a
reversal from when he delayed talk of stimulus to 2021.

What exactly is different between doing a stimulus in the lame duck as
opposed to next year? On the one hand, McConnell will have at least one
more Republican senator on his side in the lame duck. He also has a
Republican president. On the other hand, the GOP picked up seats in the
House, giving Nancy Pelosi (or a replacement?) less of a free hand in
negotiations. I could argue either way, actually, for when McConnell
would be in a better position for stimulus. Of course, there's an
outside shot, however remote, that Democrats sweep special elections in
Georgia in January and McConnell has no bargaining power. And that might
be enough to tip the scales.

Doing stimulus now means it probably looks a lot like McConnell's last
offer, which topped out at around $500 billion. McConnell certainly
doesn't have to listen to a lame duck president's request, and the
negotiations will more likely proceed between the House and the Senate,
rather than the House and the White House.

But McConnell also wants something else: an omnibus spending bill before
the December 11 deadline for funding the government, which gets
appropriations done through September. That does a couple things. First
of all, it locks in the budget so Biden's incoming team doesn't get
any say on it. Second, on the (again, remote) chance of a 50-50 Senate,
it removes the possibility (I think, not entirely certain) of budget
reconciliation for the 2021 budget year. That would mean that a
Democratic trifecta would have to wait until later in the year for a
reconciliation bill.

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The omnibus, then, is a pretty big prize, enough for Pelosi to negotiate
something better than McConnell's skinny relief bill. For the first
time, McConnell suggested that some state and local relief could be
included in the package, and sounded relatively conciliatory ("I
don't get to make the final decision... we have to deal with the
Democrats"), though of course this was for media consumption. He did
add his desire to do targeted rather than blanket relief, so I'd say
the $1,200 checks are out. The working assumption is that you'll get a
final compromise in the $1 trillion range
.

Investors should be disappointed with that, because it's highly
unlikely to fill the hole in demand needed to keep the economy upright,
but they're so happy with the notion

that they won't have to give back any tax cuts that they don't care.
So there's no real outside pressure to move the number that much
higher, and liberal minds are more concentrated on getting votes counted
and parrying lawsuits at the moment.

It's definitely positive that we may not go into next year without any
fiscal aid, and just extending those two unemployment programs for
millions of people would be unequivocally positive. It is depressing
though: twelve years after the financial crisis, we're staring once
again at a too-small economic rescue, in a moment when other countries
are stepping up for their citizens. Look at the UK, where Boris Johnson
is guaranteeing payroll support
.
This is a case that's not necessarily driven by neoliberal lowering of
ambitions, however; it's driven by the lack of leverage from the
results of Tuesday night. Elections have consequences.

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Today I Learned

* Some election stuff: Here's the Cook Political Report's National
Popular Vote tracker
. Turnout
is on pace to be the highest since 1900
.
One survey finds a "shy Trump
"
phenomenon. Contouring a Biden cabinet to Mitch McConnell's whims

would be a huge mistake. Perhaps the biggest consequence of the night:
Democrats falling short in state legislatures
,
giving Republicans a freer hand in redistricting.

* The long-term effects of COVID

finally being observed and analyzed. (Wall Street Journal)

* ICYMI, Deborah Birx' face-saving letter

about the pending threat over the next couple months. (Washington Post)

* What it's like to vote when you have COVID
.
(Detroit Free Press)

* Denmark killing all its minks

to stop a mutated virus from jumping to humans. (Politico Europe)

* Medical bills now come with a "COVID Fee
."
(New York Times)

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