A Second Stimulus Package May Be Agreed Upon Early Next Week

As of Friday evening, it is possible that a new stimulus deal may be brokered in a matter of days. This is significant news and it's the closest we've been to a second stimulus package in over 5 months. Here's what you need to know on this positive development.

A $908 Billion Stimulus Package Is On The Table

On Tuesday this week, a bipartisan group of lawmakers proposed a $908 billion stimulus package. This package includes another round of Paycheck Protection Program funding for the hardest hit businesses, funding for $300 enhanced unemployment benefits, money for education, transportation, housing, and state and local governments.

While this bill was put forth by leading Democrats and Republicans, Republican Leader Mitch McConnell also proposed an alternative plan that was closer to the $500 billion mark, and it looked like we would reach the same stalemate we've had in the past: Republicans and Democrats unwilling to agree on a middle ground.

Two Factors Supporting a Stimulus Bill Agreement

As this week progressed, a couple important things have happened that are giving this bill the best chance of not only getting agreed upon, but getting agreed upon by next week.

Nancy Pelosi and Mitch McConnell, the Democrat and Republican leaders, respectively, spoke a few times this week. Both had publicly said they see 'momentum' and they were 'optimistic' they could get a deal done 'urgently'. However, we've heard similar sentiments throughout July, August, September, and October.

The Friday Jobs Report Was Not Good

One factor which underlined the need for a bill — and now — was today's job report. It showed that the long-term unemployed has stayed very high. This coupled with the end-of-year unemployment benefit expirations and the fact that many states and cities are doing more shutdowns, pointed to the immediate need for more relief.

For example, restaurants and other services sector businesses will most certainly need another round of PPP funding as they will be forced to close indoor dining or reduce capacity in the coming weeks in many parts of the country.

Congress Needs To Agree On A Bill To Prevent Government Shutdown

In addition, Congress needs to agree on a government spending bill by December 11th to avoid a government shutdown. Many lawmakers now see this as an opportunity to add stimulus relief funding as part of this bill.

According to Speaker Pelosi, "When I spoke to Leader McConnell yesterday, we talked about the possibility of putting the Covid package on the omnibus bill."

What Work Is Needed to Finalize an Agreement?

Given these factors along with the positive rhetoric from lawmakers, now what's left is, of course, the details. The devil in all of these discussions has been in the details.

One area that has been a big sticking point is the funding for city and state governments, which Democrats want but Republicans have largely rejected.

According to CNN, Utah Republican Sen. Mitt Romney and Democratic Sen. Joe Manchin of West Virginia are working on a formula that could work for state and local governments, including possibly setting a cap at how much any one state could receive. The intention would be to block large states from getting as much money as they might have gotten in the last round based on the old formula.

Other members are working on provisions in the new Paycheck Protection Program funding, and Senator Lindsey Graham is working with President Trump to get him to back it. Trump would be the one to ultimately sign this bill into law.

Both Mitch McConnell and Steven Mnuchin have said publicly they would like to see a bill proposal on Monday.

📌 This is developing stimulus news. Stay tuned for updates over the weekend and next week.