Let's hope the finger-pointing is behind us.
After 72 hours of talks and a number of miscalculations, the bipartisan effort behind the burgeoning $1.8 trillion 'Stimulus 3' Covid-19 legislation came to a grinding halt yesterday after Senate Majority Leader Mitch McConnell lost a procedural vote to advance the measure. The legislation McConnell intended to advance was for all intents and purposes a shell bill meant to fast track Senate rules. House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer wouldn't have it and are stuck on oversight of a $500B provision in the legislation aimed at providing loans and guarantees to firms selected by the Treasury Department. Additionally, the Democratic leaders are looking to bolster unemployment insurance and health care industry funding - both underfunded in the current legislation.
While the Senate recessed for the remainder of the day, Schumer and Treasury Secretary Steve Mnuchin stayed back and continued their talks until after midnight apparently inching closer to an agreement to end the impasse. Their teams continued to negotiate through the night. Talks resume at 9:00 am with Pelosi, Schumer, McConnell and Mnuchin (likely House Minority Leader Kevin McCarthy) at the table.
Democrats rejected a 9:45 am revote on the measure and McConnell moved the vote to 12:00 PM - giving the negotiators three short hours to come to an agreement.
What's currently in the legislation (with bipartisan support):
- $250 b in direct payments to qualifying Americans (1,200 per adult and 500 per child)
- $350 b in small business relief
- $100 b for hospitals
- $250 b for state unemployment programs.
We believe this is the storm before the calm as Congressional leaders have no other option but to come to an agreement and fast. Once the parameters around implementation of the aforementioned $500b 'slush fund' provision are resolved, then the remaining issues will likely fall into place.
One variable to watch this morning - Pelosi splitting off and pursuing a separate legislative track in the House as she indicated yesterday. That's not necessarily the death knell for Stimulus 3 but would extend the time horizon for passage.
Please call with questions. We'll be tweeting updates throughout the morning.
