Stimulus update: Why the White House’s $ 916 billion proposal won’t fly

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For the latest information on ongoing stimulus negotiations, please see our cover here.

For months, members of both sides have been pushing for the next stimulus package to include improved unemployment benefits for over-50s. 19 million Americans still on state unemployment lists.

This explains why some Democratic leaders were frustrated on Tuesday when Treasury Secretary Steve Mnuchin unveiled the White House’s $ 916 billion stimulus package, which did not include improved weekly unemployment benefits.

As the new white house The $ 916 billion proposal includes $ 160 billion for state and local funding (a key Democrats demand), corporate liability protection (a Republican wish), and even $ 600 per stimulus check per person, it notably does not include any enhanced unemployment insurance and provides only $ 40 billion for the extension of Pandemic Unemployment Assistance (PUA) and Unemployment Compensation in Emergency Pandemic (PEUC) which will expire this year. In contrast, the bipartisan $ 908 billion deal proposed last week would provide enhanced unemployment benefits of $ 300 per week.

Although the inclusion of stimulus checks gained popularity on both sides of the aisle, the White House bill as is is a nonstarter.

House Speaker Nancy Pelosi quickly rejected the White House deal, stating that “the president’s proposal begins by reducing the unemployment insurance proposal discussed by bipartisan House and Senate MPs in 180. billion dollars to 40 billion dollars. This is unacceptable, ”she said in a joint statement with Senator Chuck Schumer after the release of the White House proposal. They added that the agreement “must not be allowed to obstruct” the ongoing bipartite negotiations, and that “reduce unemployment as far as [Mnuchin] a… won’t get much support among Democrats, ”Schumer told reporters Wednesday.

The Treasury Department did not respond Fortunethe request for comment on the latest White House offer.

Indeed, while the inclusion of stimulus checks would be welcome in many areas, compared to funding things like rising unemployment, these “blanket” checks are less critical to the economy, say economists and analysts.

“The first priority is, at the end of the day, households that don’t have jobs, don’t have savings,” said Mark Zandi, chief economist at Moody’s Analytics recently. Fortune.

Meanwhile, Michelle Meyer, head of the US economy atBank of America, adds that “Unemployment insurance is essential, and not just the dollar amount, but the various programs. At the end of the year, the programs to fight the unemployment pandemic are about to expire: these are the ones that expand eligibility to self-employed and construction workers, ”she said recently. . Fortune.

A spokesperson for McConnell did not respond toFortunethe senator’s request for comment on whether the senator supports the White House deal.

More to read absolutely financial cover of Fortune:

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