To recap the past 24 hours: McConnell put forward a "skinny" bill offer, Democrats rejected it, and then Mnuchin, on behalf of the White House, unveiled a revised $916 billion compromise deal that would include a $600 second stimulus check in lieu of boosted jobless benefits.
While Democratic leaders Pelosi and Schumer "reacted coolly" to the new offer, the market is more encouraged. The Dow and S&P are drifting higher this morning after the S&P closed above 3,700 yesterday for the first time. The Nasdaq--which is up 40% (!!!!!) this year--also closed at a record yesterday and is fluctuating between red and green.
"It does look to me like we are inching toward a deal," one J.P. Morgan strategist told the Wall Street Journal. "Baby steps," is how Dave Lutz of Jones Trading put it. To which I would just say: now that I actually have experience with "baby steps," I realize they more often than not end in faceplants and screaming.
Anyhow, the clock is ticking. A deal apparently needs to be struck before Congress goes home on December 18th, nine days from now. But then these "deadlines" are sometimes fluid and Congress ends up sleeping in their offices on Christmas Eve. Presumably they want to avoid that. ("Leaving here without a Covid relief package cannot happen," McConnell said earlier yesterday.)
The biggest sticking point already over the new $916 billion bill is scaled-back jobless benefits. "[T]he President's proposal, which cuts unemployment insurance by $140 billion compared to the framework, is unacceptable," Speaker Pelosi tweeted. The new bill scraps the extra $300 weekly jobless benefit that was originally proposed in the compromise bill last week.
But the addition of a "second stimulus check" in place of those benefits is a big deal that could be too popular for Congress not to accept. Why do I keep putting it in quotes? Have you any idea just how popular that search term is right now? Every time we open YouTube on our TV to search Little Baby Bum or Bishop Barron, "second stimulus check update" is one of the top trending searches. There's a guy who's got a million subscribers tuning in for his daily second stimulus check updates--which he simply reads to camera off a sheet of paper. This has been going on for months.
The current proposal would be half the original amount; $600 per person, $1,200 per household. The first round has been a key source of spending for households and retailers--everyone from Foot Locker to Wayfair has noted their positive impact. People even used some of the funds to trade stocks. The payments may not have been perfectly targeted, but are probably no worse than the mess that's been made of jobless benefits--which will soon be reported with a disclaimer because the data have become so distorted.
Will this prove to be the framework that moves the whole thing closer to the finish line? Let's see what the afternoon brings.
See you at 1 p.m!