The Senate is Stuck
Originally posted on: 3/23/2020
After an interesting weekend – here are the sticking points on the current stimulus package they are attempting to get through the Senate. It may take some time – but the Dems and Republicans will have to find common ground on these points or the market will continue to take a hit.
The following was “lifted” from 3/23/2020 Morning Brew newsletter:
So what are the sticking points?
1. Corporate infusions. Democrats reportedly balked at $500 billion earmarked for corporations, including $58 billion just for airlines. They called it a “slush fund” because the Treasury Department would determine who received support. And…Dems also thought the bill didn’t do enough to restrict companies that received federal aid from buying back stock. President Trump agrees with that.
2. Exec knuckle raps. The bill would have imposed executive pay caps that lasted two years, which wasn’t long enough for the c-suite hawks.
3. Jobless aid. Republicans offered three months of unemployment insurance—not long enough for Dems, who want to spend $250 billion expanding that safety net.
4. Healthcare. Pelosi and Senate Minority Leader Chuck Schumer are advocating for an additional $200 billion for hospitals and other providers.
5. Student debt. Pelosi is reportedly trying to erase $10,000 in loans for anyone with federal student debt.
6. Loans for small businesses. The bill included $350 billion in small business loans that would be forgiven as long as the firms used them to retain staff. While that’s pretty popular, Democrats objected because certain nonprofits would not be eligible.
This last point is a “doozy”. The Senate will have to draw the line at some point deciding who qualifies for that last $350 billion. Many non-profits will be devastated if not included. What about the sole proprietors and 1099 contractors who do such a good job supporting themselves and their families during good times but may face new and incredibly difficult challenges in the new economy? Point #6 may be more of a sticking point than originally thought.