U.S. senators departed the Capitol for a pre-election break yesterday, making the logistics for passing a fiscal stimulus package by next Tuesday practically impossible, even as the coronavirus continues to infect tens of thousands of Americans daily and inflict economic damage, Bloomberg News reported. “We’ll come back in November. The question might be, will there be something then?” Senate Appropriations Chairman Richard Shelby (R-Ala.) said yesterday. The chances of a coronavirus relief bill before Nov. 3 are “very, very slim,” he added, referring to Election Day. The Senate’s departure after the confirmation vote for Amy Coney Barrett to join the Supreme Court left House Speaker Nancy Pelosi (D-Calif.) and Treasury Secretary Steven Mnuchin to continue haggling over a package. After their latest call yesterday, agreement remains pending on both the size — the Trump administration was last at $1.9 trillion, with the Democrats at $2.4 trillion — and language of a bill. Failure to reach an accord carries human and economic as well as potential political costs. The coronavirus has strengthened its grip across much of the U.S. with record numbers of cases, and the economy remains fragile. The realization that any new stimulus would almost certainly have to await the election contributed to the worst selloff in U.S. stocks since early September on Monday. Even in the unlikely event Pelosi and Mnuchin could come to terms, writing a complex bill and pushing it through House and Senate procedures before Election Day would be an all but impossible task.
As pandemic-related restrictions tightened across parts of Illinois last week, small-business owners in this Chicagoland suburb girded themselves for another round of losses, the Wall Street Journal reported. On Friday, restaurants and bars in four counties closed once more to dine-in service under mitigation measures announced by Gov. J.B. Pritzker because of rising COVID-19 cases in every region of Illinois. In Chicago, Mayor Lori Lightfoot instituted a 10 p.m. nightly curfew for nonessential businesses and prohibited bars without a retail food license from serving customers indoors. Many businesses have endured multiple rounds of restrictions around the state, which are instituted whenever a region’s average COVID-19 positivity rate goes above an 8 percent threshold for three consecutive days. On Friday, Illinois health officials put half of the state’s 102 counties on a warning list because they triggered at least two state-set thresholds on indicators the state uses to determine where increased COVID-19 risk is occurring. On Friday, Illinois had 29,088 new COVID-19 cases in the last seven days, according to the Centers for Disease Control and Prevention. It ranked second behind Texas for U.S. states with the highest number of new cases in the past week.
In Michigan’s Western District — which spans 34 counties in the Lower Peninsula and the entire Upper Peninsula — small businesses like Purple East in Grand Rapids and six other entities as of Oct. 20 have elected to file for subchapter V relief established under the Small Business Reorganization Act (SBRA), MiBiz.com reported. In the Eastern District covering the rest of the state, 10 plans had been filed under subchapter V. The SBRA includes fewer costly requirements under a typical chapter 11 — for example, it doesn’t generally require debtors to file a disclosure statement. It also seeks to eliminate the potential for competing reorganization plans from creditors. Meanwhile, the law includes a 90-day deadline for a debtor to file a plan after a relief order. “The expedited process and the return have reduced costs and I think ended up with a better result for the creditors I’ve represented," said Richardo Kilpatrick, president of Troy-based Kilpatrick & Associates PC, who now serves as a subchapter V trustee under the new law. “We’re starting to see an uptick in (SBRA cases) and I think we’re going to see a lot of successful reorganizations now,” Almassian said. Todd Almassian, partner at Grand Rapids-based Keller & Almassian PLC, said requiring only debtors to file a reorganization plan while allowing them to retain a stake in the company are two key features of the SBRA. “In the past, the administrative expense burden and the procedural hurdles prevented some small companies from reorganizing,” Almassian said.
The three months of negotiations over a new round of virus relief moved no closer to a resolution over the weekend, all but extinguishing the prospects of a stimulus bill being written, voted on, and signed into law by President Donald Trump before the election, Bloomberg News reported. House Speaker Nancy Pelosi said she’s waiting for another counteroffer Monday from Treasury Secretary Steven Mnuchin, as she and White House Chief of Staff Mark Meadows accused each other of “moving the goalposts” in negotiations. Much of the weekend was devoted to work by congressional committees with the goal of writing legislation, but aides in both parties said little progress was made despite the pledges from both sides that they want to quickly deliver $1,200 stimulus payments to most Americans along with aid to struggling businesses. The Senate is set to leave Washington, D.C., on Monday after voting on the confirmation of Supreme Court nominee Amy Coney Barrett, and the House is already out. Both chambers could be called back for a vote with 24 hours notice, though that scenario is unlikely in the last week of campaigning before the national election.
House Speaker Nancy Pelosi (D-Calif.) was noncommittal yesterday about bringing a stimulus measure to the House floor for a vote before the Nov. 3, noting that even though a deal with the Trump administration appeared to be coming together, “it takes time” to transform it into legislation, the New York Times reported. At her weekly news conference, Pelosi said that she believed she and Steven Mnuchin, the Treasury secretary, were “just about there” in their negotiations to reach a compromise, although she said they had yet to agree on the two biggest sticking points. The White House is resisting Democrats’ push for $500 billion for state and local governments, while Democrats have balked at Republicans’ demands for liability protections for schools, hospitals and businesses open during the pandemic. Even if the pair were to reach agreement on those issues, Pelosi said there was no guarantee it could be passed before Election Day. “It’s not just a question of us agreeing in a room,” Ms. Pelosi said, noting that the process of writing any deal into legislative language and having the Congressional Budget Office go through it to determine an official cost could be lengthy. “It takes time.” But she continued to maintain public optimism that an agreement could be reached and signed into law. She brushed aside public warnings from Republican senators, who have said they are unlikely to support a bill anywhere near as costly as the emerging compromise, and have suggested that there aren’t even the minimal 13 Republican votes needed to join all Democrats to advance the legislation.
White House officials and House Speaker Nancy Pelosi (R-Calif.) opened the door to passing a coronavirus relief package after the election, a signal that time and political will has likely run out to enact legislation before then, the Wall Street Journal reported. Pelosi and Treasury Secretary Steven Mnuchin yesterday reported more progress on a potential $2 trillion aid agreement. But even if they strike a deal before Nov. 3, legislation would face vanishing prospects of quickly becoming law, thanks to both the tight calendar and hardened opposition in the GOP-controlled Senate. Still, in the waning days of an election season in which both the White House and Senate are up for grabs, neither party wanted to give up on months-long discussions over providing relief for households and businesses still struggling during the pandemic. “I’m optimistic that there will be a bill. It’s a question of, is it in time to pay the November rent, which is my goal, or is it going to be shortly thereafter and retroactive?” Pelosi said yesterday. Larry Kudlow, a top White House economic adviser, said on CNBC Wednesday that negotiators were “running out of time, at least between now and the election” and that wrapping up work on a relief package in a lame-duck session, after the election but before the next administration begins, “could be a possibility.”
Prospects for an economic relief package in the next two weeks dimmed markedly on Tuesday after Senate Majority Leader Mitch McConnell (R-Ky.) revealed that he has warned the White House not to strike an agreement with House Speaker Nancy Pelosi before the Nov. 3 election, the Washington Post reported. In remarks at a closed-door Senate GOP lunch, McConnell told his colleagues that Pelosi (D-Calif.) is not negotiating in good faith with Treasury Secretary Steven Mnuchin, and that any deal they reach could disrupt the Senate’s plans to confirm Amy Coney Barrett to the Supreme Court next week. Republicans have voiced concerns that a stimulus deal could splinter the party and exacerbate divisions at a time when they are trying to rally behind the Supreme Court nominee. McConnell’s attempted intervention came as Pelosi and Mnuchin continued negotiating over the roughly $2 trillion economic relief package. Pelosi spokesman Drew Hammill said that the “conversation provided more clarity and common ground as they move closer to an agreement.” But no deal can become law without McConnell’s blessing, and his direct warning to the White House imperils the chances of any bill becoming law in the next two weeks.
U.S. Senate Republicans are preparing to bring up legislation today to replenish a program that helps small businesses slammed by the coronavirus, as House Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin discuss a larger stimulus package, Reuters reported. Pelosi and Mnuchin, who have been negotiating intermittently since August on a fresh coronavirus aid plan, plan to speak again on Tuesday after they “continued to narrow their differences” in a nearly hour-long call yesterday, Pelosi’s spokesman, Drew Hammill, wrote on Twitter. Pelosi, the top elected U.S. Democrat, has set the end of the day today as a deadline for agreement with the White House, if a comprehensive coronavirus relief bill is to get through both chambers of Congress before Election Day on Nov. 3. President Donald Trump’s administration has proposed $1.8 trillion, while Pelosi has been pushing for a $2.2 trillion aid and stimulus package. That is in addition to the $3 trillion in coronavirus relief Congress already approved in the spring. While Pelosi said on Sunday she was optimistic a deal could be reached on a fresh package, and a spokeswoman said Monday the White House was also “cautiously optimistic,” optimism was in shorter supply in the Republican-run Senate, where many Republicans oppose passing more coronavirus aid. A senior Senate Republican, John Thune, expressed doubt Monday that there would be enough Senate Republican votes to pass a comprehensive bill as large as the White House bid of $1.8 trillion. Instead, Senate Republicans will propose on Tuesday a new round of funding just for the Paycheck Protection Program, a popular program that was launched earlier in the pandemic with bipartisan support to provide loans to small businesses. The measure is not expected to advance, because Senate Democrats have already given notice they consider such targeted efforts inadequate. McConnell said that the Senate also plans a vote on Wednesday on a $500 billion-plus Republican proposal to include unemployment benefits and aid to schools. It would provide people with $300 in federal weekly unemployment benefits, while the Democrats want to return to the $600 weekly level in a measure approved earlier this year. Democrats blocked a similar Republican proposal last month and the measure on Wednesday is also expected to fail. Read more.
In related news, Congress in March allotted $454 billion to the Treasury Department to support the central bank’s emergency lending programs, including those for struggling businesses and local governments. Of that pot, only $195 billion has been specifically committed to cover any losses the Fed might take, including through loans that companies fail to repay, the Washington Post reported. Seven months into the crisis, the remaining $259 billion still has not been committed to any of the Fed’s specific programs or for any other purpose, and it is unlikely that it will be anytime soon. The fate of this money show the surprising limits of the nearly $3 trillion in emergency aid Congress approved early in the pandemic. Federal Reserve and Treasury Department officials say there are ways the money could be repurposed to more directly reach businesses and workers but say they cannot do so without congressional approval. White House officials tried redirecting the money without congressional approval but were told by administration attorneys that they could not do so legally, according to two people who spoke on the condition of anonymity to describe internal conversations. Read more.
