Brief #100

Congress at Impasse as Situation Worsens for Millions of Americans

Stimulus; Unemployment; Evictions

Rosalind Gottfried        


December 9, , 2020


As winter recess approaches the Congress remains at an impasse regarding a new stimulus package which is likely to fall by the wayside as it turns its attention to passing legislation to avert a December 11th federal shutdown.  While the government deals with its own malfunctions, economic trends point to multiple trends suggesting a downward spiral.  Job creation, which showed a tepid 245,000 increase in November, was down from an average of 1.9 million in the summer and earlier fall months.  Without a renewed stimulus, 12 million jobless Americans will run out of unemployment benefits on December 31st and an estimated 6.7 million will face eviction as moratoriums end.

The economic recovery is slowing and expected to stall, or worsen, until a vaccine is widely available.  Some signs of the worsening affects can be seen in mid-November data, before the latest surge from the Thanksgiving holiday was felt.  The week ending November 21st saw hotel occupancy at 40%, down from 50% a few weeks earlier.  In the same week, consumer spending was down 5%, and more small businesses have closed, whether temporarily or permanently is not yet known.   While the government stimulus stalls, and  Congress bickers over how to avoid a shutdown, the most vulnerable Americans will suffer the consequences of what promises to be a bleak winter.


There are two plans floating in the government, neither of which promises to bring necessary relief to millions of un- and underemployed workers or to state and local governments.   There is a 908 billion dollar bipartisan Congressional plan, versus a 916 billion dollar Trump plan, neither approaching the two trillion plus plan initially favored by Congressional Democrats when the first CARES package expired.   Putting money in the pockets of Americans is a necessity and none of the proposals support another $1200 check; they range from zero, in the bipartisan Congressional plan to $600 in Trump’s plan, though that plan would slash unemployment benefits in the Congressional plan.  Bernie Sanders has stated that 1 in 4 Americans is out of work or making less than $20,000 a year.  This gives pause to a statement made by a Bloomberg economist that the economic pull back will “tip the economy into a modest contraction early next year;”  A significant part of the population will face a dramatic situation.  The Democrats and Republicans are especially split on the issue of aid to state and local governments, which face substantial layoffs. McConnell seems to be a major obstacle to getting the latest bipartisan Congressional bill passed, saying he wants to include coronavirus corporate liability protections for corporations and drop state and local aid provisions.  Biden has pledged to move quickly to bring a stimulus to the first days of his administration, even if it means sacrificing some of the Democrats goals, such as aid for the states.  Biden, and secretary of the Treasury, Janet Yellin, will start out in crisis mode.

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