Nancy Pelosi Should Take The Stimulus Deal

After months of negotiations with Treasury Secretary Steven Mnuchin, House Speaker Nancy Pelosi (D-Calif.) finally persuaded the Trump administration on Friday to offer up $1.8 trillion in emergency economic relief.

She should take the deal.

Pelosi instead spent the weekend blasting the White House offer, which includes $300 billion in aid to state and local governments, a $400-a-week boost to the unemployed and a more aggressive round of stimulus checks to households than those delivered under the March stimulus bill. The Trump administration proposal would provide a family of four making less than $150,000 an influx of at least $4,400, as The Washington Post detailed. This is real money.

And yet, in separate letters released Saturday and Sunday, Pelosi assailed the Trump proposal for failing to adequately address virus testing, tracing and vaccine development; refusing to tighten OSHA regulations; excluding economic relief to U.S. territories and Native American tribes; and for “cruelly” doing “nothing to address inequities in COVID incidence and impact on communities of color.”

However compelling these objections may be, they were all equally true of the original coronavirus relief package Congress approved in March. Pelosi, Senate Minority Leader Chuck Schumer (D-N.Y.) and every single congressional Democrat supported that bill, and Pelosi vowed at the time that Democrats would be coming back to the table for more. There would be multiple “phases” of relief, she said, to address different stages of the crisis. Now that a new phase has arrived, Pelosi appears to be digging in against a deal.

The White House has been thoroughly erratic on its stimulus views for weeks. Last week, Trump called off talks altogether until after the election, personally taking credit for killing negotiations. By Friday, his offer was up to $1.8 trillion. Over the weekend, his economic adviser, Larry Kudlow, suggested the administration might be willing to eclipse $2.2 trillion, while other Trump administration staffers put forward a narrower $130 billion proposal aimed exclusively at small businesses. 

It’s possible Pelosi can coax more money out of the administration. If so, bravo to her. But what is on the table right now is already very good. It is, as Rep. Ro Khanna (D-Calif.) notes, more than double the size of the 2009 Obama stimulus. And as far as the terms for working people are concerned, it is considerably more generous. 

The economic rationale for the bill is straightforward. According to the most recent weekly data, 840,000 people are losing their jobs every week. Prior to the pandemic, the previous all-time weekly high was 695,000. Job growth picked up in June as states began reopening their economies, but that growth has slowed every month. At the moment, growth is stalled out and the unemployment rate is 7.9%. Small businesses that have survived the spring and summer by repurposing themselves as outdoor enterprises will not be able to continue the gambit through the winter, and according to the National Restaurant Association, 40% of restaurant operators don’t expect to make it another six months. 

The economy, in short, is in a downward spiral that will likely accelerate without government aid. Absent a deal with the president, none will magically materialize. Relief payments for households and small businesses dried up in July. Even conservative economists currently believe that a large government relief program is needed to right the ship.

The dispute over the stimulus in Democratic circles has not been about the economic situation, but the politics of addressing it. Passing a stimulus bill, critics argue, would hand Trump a much-needed legislative win heading into the November election. 

It is unfortunate that such considerations must be weighed when considering doing basic relief work, but it would be irresponsible not to consider them. The current occupant of the White House has been ranting all week about having the Department of Justice prosecute his critics. He has repeatedly refused to commit to a peaceful transition of power should he lose the election. He is a dangerous man surrounded by dangerous men, and it would indeed be foolish for Democrats to approve legislation that would help him win reelection.

Such reasoning, however, applied even more forcefully to the original relief bill passed in March. If Democrats really wanted Trump to take it on the chin, they would not have voted for a bill that included a $600 a week boost to unemployment benefits for four months. The economic crisis would have been far worse as a result, and Trump’s approval rating on the economy would be lower, while public anger at incumbent politicians would be more intense, with most of that fury directed toward the most powerful man in the country.

Democrats didn’t do that, of course. The president may be a dangerous man, but it is also dangerous to let the country go to rot. 

And even for the most jaundiced political thinker, there is little reason to believe Trump will benefit from a deal with Pelosi. If anything, taking the deal would throw the Republican Party into turmoil that would aid Democrats in November. 

Taking the deal would immediately put pressure on the Republican-controlled Senate to act. According to a September poll from the Financial Times and the Peterson Institute, 91% of Americans want to see Congress pass another stimulus package. We know, however, that Senate Republicans don’t want to pass one, because they keep saying so to the press.

If Pelosi and Trump come to Senate Majority Leader Mitch McConnell (R-Ky.) with a deal, he will have to explain to the public why his caucus is rejecting a popular agreement with bipartisan support. 

Having to vote against the deal would be a disaster for a host of embattled Republicans. Democrats have Senate pickup opportunities in Colorado, Iowa, Maine, Montana, North Carolina, South Carolina, Arizona, Alaska, Georgia and even Texas this cycle. All of these races will be close and none of these senators want to be held responsible for denying their constituents aid that economists and the president say is necessary. If McConnell won’t get his caucus to approve the deal, he’ll be signing a lot of electoral death warrants.

So it’s entirely plausible that McConnell signs on to the stimulus to prevent a Senate wipeout. What then? Well, the grim fact is that relief won’t arrive in time to affect many people’s views about the government. It takes time to administer relief, and much of the relief included in this package is about preventing damage later on ― aid to state and local governments, for instance, is about preventing further job losses, not creating new jobs. 

Trump, paradoxically, is a gift to Democrats right now. One of the key problems with the March coronavirus bill was that it gave Republicans everything they really wanted ― trillions of dollars in relief for large corporations and the ultra-wealthy. Once those terms were secured, Republicans had no real incentive to return to the negotiating table. And they haven’t. 

But over the past few days, Trump has launched a sustained offensive in right-wing media calling for more stimulus. This is leverage that Pelosi will not have after the election when Trump will no longer care about being reelected. There’s a lot of time between now and January, and though more spending will unquestionably be needed in 2021, $1.8 trillion in fiscal relief now would put an incoming Joe Biden administration on stronger footing.

Heads, working people win; tails, Republicans lose. Pelosi should take the deal.

Zach Carter is the author of the New York Times bestseller “The Price of Peace: Money, Democracy, and the Life of John Maynard Keynes,” available from Random House wherever books are sold.

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