Talks Have Begun on Next Stimulus Bill; Targeting Dr. Fauci

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July 14, 2020

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MITCH McCONNELL AND STEVEN MNUCHIN are already talking about the next stimulus bill, which will take shape later this month. This comes as three competing narratives affect the talks: first, signs that new Covid-19 cases have stalled the economy; second, the need to provide funding for schools; third, grim new deficit figures, showing that red ink could soar past $4 trillion this year.

THE DOMINANT FACTOR, in our opinion, is that the virus is out of control in Florida, Texas and other states, which will necessitate another major stimulus bill. As for deficits — we’re still in the triage stage; Congress first has to save the patient.

SEVERAL WEB SITES, including TheHill.com, are reporting this morning that McConnell will have a draft bill ready to share with lawmakers when they return next Monday. “I’m predicting we will have one more rescue package, which we’ll begin to debate and discuss next week,” McConnell said yesterday. His goal is to complete a bill in the next three weeks.

A LENGTHY LAUNDRY LIST: There are so many “must pass” provisions that it will be difficult to keep the price tag under $1 trillion; we think something like $1.5 trillion is more likely — with President Trump inclined to “go big” on spending.

WHAT’S CERTAIN? Mnuchin knows that two provisions are virtually mandatory — aid to reeling state and local governments, and liability protection for companies affected by the virus. McConnell will not bend on that; he said yesterday that he will insist on liability protection that would be retroactive to December 2019 and extend to 2024.

OTHER LIKELY PROVISIONS will include aid to schools, some type of check to individuals and families, and an incentive to get people back to work. Trump’s chances of getting a payroll tax cut are fair at best; an infrastructure provision is unlikely.

ONCE McCONNELL AND MNUCHIN iron out a bill, tough negotiations loom in late July between them and Democrats, headed by Nancy Pelosi and Chuck Schumer. They want to spend far more and could refuse to sign off on a modest measure, playing hardball just before the August recess.

OUR BOTTOM LINE IS UNCHANGED: Trump wants a bill. Fed Chairman Jerome Powell wants a bill. Most — but not all — Republicans want a bill. Many Democrats will abandon their $3 trillion package for something like $1.5 trillion. The simple fact is that the virus crisis is intensifying, and McConnell knows that failure to pass a bill would greatly increase chances of the GOP losing the Senate this fall.

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WHY GO AFTER DR. FAUCI? The White House has produced talking points on Anthony Fauci’s alleged mistakes (some of which are are exaggerated, and others came as the pandemic began, when everyone was in uncharted waters). Yet the White House wants to portray the nation’s top virus expert as a deeply flawed Cassandra; President Trump has re-tweeted emails that mock Fauci for wanting to close businesses, ballparks and schools.

TWO-THIRDS OF AMERICANS respect Fauci on the virus; one-third supports Trump, so the president needs scapegoats. China is a valid target, no argument there. But to slime Fauci diminishes the president and makes the White House response look even more dysfunctional.

TRUMP UNDOUBTEDLY IS REACTING TO POLLS that show his support falling fast among a crucial constituency — senior citizens, who are most vulnerable to the virus. Suddenly the retirement havens of Florida and Arizona are in play.

THERE’S A LOT TO BE OUTRAGED ABOUT — including the astonishing rise of gun violence in urban America. But attacking Fauci as if he’s a political foe is a crude effort to diminish the doctor, who has the guts to proclaim that the country opened up too soon — which is becoming a major narrative of this crisis. The White House, not surprisingly, is determined to muzzle the messenger.