Will there be a stimulus deal?
Here’s what you need to know—and what it could mean for your wallet.
There’s no clear sign that Congress will reach a stimulus deal before the November 3 election. As Americans await second stimulus checks and federal unemployment benefits, here are 5 potential outcomes of what could happen next:
Option 1: Congress could reach a stimulus deal before the election
Congress could reach a stimulus deal before the election, although there doesn’t seem to be a clear path currently. In Washington, never say never. Treasury Secretary Mnuchin indicated this week that stimulus talks could resume shortly. “I’ve probably spoken to Speaker Pelosi 15 or 20 times in the last few days…and we’ve agreed to continue to have discussions about the CARES Act,” Mnuchin said. House Democrats may be working on a $2.4 trillion stimulus package—which is approximately $1 trillion less than the Heroes Act stimulus bill they passed earlier this year. The new stimulus package could include second stimulus checks, federal unemployment benefits and small business aid through the Payment Protection Program. The House could vote on the legislation as early as October 2. The Senate is scheduled to adjourn after October 9 to allow members to campaign until the November 3 election. However, Senate Majority Leader Mitch McConnell (R-KY) could ask members to return to Washington to vote on any potential stimulus deal.
Option 2: Congress agrees on a stimulus deal, but president doesn’t sign bill
Congress could agree on a stimulus deal, but the president must sign the legislation before it becomes law. One possible scenario—if and when Congress reaches a deal—is that the president decides not to sign the bill before the election, or at all. This scenario is probably low likelihood, since the president supports a new stimulus deal as well as second stimulus checks. The question will be the cost of the stimulus package. However, since Mnuchin and White House Chief of Staff Mark Meadows are negotiating the deal with Speaker of the House Nancy Pelosi (D-CA) and McConnell, there presumably would be bipartisan support before Congress sends any stimulus bill to the president’s desk for signature.
Option 3: The Senate and House each pass smaller stimulus deals
The Senate and House could seek to gain political favor by passing smaller stimulus deals before the election. This move could be largely symbolic if there is no bipartisan support. For example, Senate Republicans could not get sufficient bipartisan support for a $500 billion stimulus package, which was approximately half the size of their initial proposed bill, the Heals Act. However, it’s possible that both parties agree now to fund key areas like stimulus checks or unemployment insurance to help provide immediate financial need to Americans. Both parties potentially could score political points with voters if Congress reaches a stimulus deal. That said, while Republicans have preferred a piecemeal approach to legislation, Democrats have not. Pelosi and Senate Minority Leader Chuck Schumer (D-NY) ultimately will decide if they are willing to focus on areas of bipartisan support rather than hold out for a larger stimulus package.
Option 4: The president takes executive action
Typically, Congress has the power of the purse in Washington, which allows Congress to authorize federal spending. That said, there are certain powers apportioned to the executive branch, which allows the president to act through executive order. President Donald Trump has been active through executive memoranda and executive orders to shape policy. For example, Trump has issued multiple executive memoranda on issues ranging from payroll taxes to student loans. If Congress remains at an impasse, and Trump wants to act before the election, it’s possible that he uses executive action to provide at least some financial relief (subject to separation of powers).
Option 5: Congress doesn’t pass a stimulus deal
Not everyone in Congress supports a new stimulus deal. There are fiscal conservatives who say that Congress already has spent trillions of dollars in taxpayer money on financial stimuli. They either oppose new stimulus spending, or would limit spending to certain areas such as small business aid or school funding, for example. While Mnuchin and Pelosi could resume stimulus talks, there is no guarantee they will reach a deal. Pelosi’s $2.4 trillion new stimulus bill could be at least $1 trillion higher than what Republicans are willing to agree to—which doesn’t bode well for a potential deal. Congress also will shift its focus to the Senate confirmation process to fill the seat left vacant by the late Supreme Court Justice Ruth Bader Ginsburg. While Congress could reach a deal during the confirmation process, Congress also may opt to wait until after the election.