Will There Be a New Stimulus Deal or Not?

Here's the latest stimulus news and economic news as of Tuesday November 17th. Earlier today, CNN published that the "fate of the stimulus looks bleak". We'll unpack what's behind this, what lawmakers are saying, and if anything substantial has changed on the Republicans or Democrats side. Plus, we'll share updates on the existing SBA programs since they're still relevant to small businesses.

Jerome Powell: More Economic Stimulus Is Needed

Federal Reserve Chair Jerome Powell said today that he's worried about long-term economic scarring because of the rising number of pandemic cases and the increasing unemployment rate.

“From the very start, we’ve been concerned about longer-run damage to the productive capacity of the economy,” Mr. Powell said. “We’ve got a long way to go.”

“We’re not going back to the same economy,” he said, adding that the Fed, for its part, will continue to support the economy “for as long as it takes, until the job is well and truly done.”

He made these comments as he reflected on the vaccine news which he did say was positive but he cautioned that mass distribution would take some time.

The main takeaway from Mr Powell's comments today is that he continues to support lending programs for state and local government, medium size businesses, and small businesses as well.

Here's The Latest News on Funding from the SBA

Before we get into the new stimulus negotiations between Republican and Democratic lawmakers, here's a snapshot of the SBA grant and loan programs that are still plugging away:

• The EIDL Grant Program is still on pause. Since the SBA ran out of funding for this over the summer ($20 billion from the CARES Act), no new EIDL grants have been given out. Lawmakers continue to push for more funding for this program as do we on our YouTube channel.
• The EIDL Loans Program continues. According to the SBA, businesses still have until the end of 2020 to apply if they have not yet. Businesses will be evaluated based on their owners credit, their business revenues and costs, and a few other factors in order to receive these low-interest loans from the government.
• The 504 Loan Program has reduced its interest rates as of November 13th. This loan program is backed by the SBA and funds are approved and distributed by CDCs (Certified Development Companies). The goal of this is to promote economic development in certain areas and the funding is geared toward the purchase of land, buildings and equipment or the retention of jobs.

Here's the press release and details on the 504 Loan Program update.

What About the Second Stimulus Package?

Put simply, Republicans and Democrats are still divided and we don't see a closer compromise likely in the near future. Certainly nothing will be agreed before Thanksgiving and it unfortunately looks unlikely that anything will be passed before the end of the year.

According to the NYTimes case tracker, cases continue to surge and the weekly rolling average is over 150,000 cases per day. Governors are issuing new lockdowns and health experts expect the case count to continue to increase, affecting businesses and as a result jobs and employment.

Here's a quick recap on where the lawmakers stand:

• President-elect Biden supports Pelosi and Schumer's proposal for increased funding, the $3.4 trillion HEROES Act originally proposed 5 months ago.
• The Trump Administration is not engaged in any discussions regarding the economic relief and a second stimulus package.
• Aides from both parties say that no serious discussions are currently happening.
• McConnell continues to criticize not only the amount of the Democrats proposal but also the contents of the HEREOS Act. And vice versa for that matter.
• Republicans had previously agreed on and passed a $500 billion stimulus bill which Democrats have flatly rejected.
• Bottom line: The Republicans sit at $500 billion and Democrats at $3.4 trillion and there appears to be no movement toward a middle ground like there was before the election.

Nancy Pelosi and Chuck Schumer: "Let's Negotiate"

Today, Speaker Pelosi and Senate Minority Leader Schumer wrote a letter to Senate Majority leader McConnell to ask him to "join us at the negotiating table". The Democrats wrote that the "pandemic and economic recession will not end without our help".