A National Embarrassment as Congress Stalls on Virus Relief Bill

by Greg Valliere, AGF Management Ltd.

THE FACTS ARE OBVIOUS: Unemployment claims are surging, there are long lines for food, evictions are imminent, a wide range of relief provisions will expire at the
end of this month, small businesses are failing, a recession looms in the first quarter, and Covid fatalities are soaring — headed to nearly 4,000 per day by Christmas.

YET CONGRESS CAN’T GET ITS ACT TOGETHER as a virus relief bill — any bill — has bogged down, with no prospect of an agreement for several more days. It’s a national embarrassment.

NOT ONLY HAS A VIRUS relief package stalled, the vehicle for such a measure — the $1.4 trillion 2021 budget bill — also may stall because just one senator, Rand Paul, may tie Congress into knots next week with a filibuster. Still another extension, past the Dec. 18 deadline, may be necessary.

THERE ARE DOZENS OF MODERATES who are anxious to pass a bipartisan bill, and there are persuasive arguments on both sides. No need to re-hash differences on liability relief or aid to state and local governments (which soon will have to lay off thousands of workers). And there’s a case to be made for stimulus checks as opposed to unemployment benefits.

THERE’S NO NEED TO RE-VISIT the arguments about Mitch McConnell and Nancy Pelosi, both unwilling to bend; they’re both villains in this narrative. Treasury Secretary Steve Mnuchin has been a relatively honest broker, but his boss is far more concerned about a ridiculous election plea to the Supreme Court which is certain to fail.

THE DEBATE ON A RELIEF BILL will drag on, surely through late next week and perhaps past Christmas. Fatalities will soar and food lines will lengthen, as Congress dithers — seemingly oblivious to the suffering.

VACCINES ARE COMING: Perhaps by April or May the country will have some degree of herd immunity; the stock market has priced in a booming economy by summer. But we have to get from here to there, and this will be a very difficult winter if there’s no relief bill. We still expect a deal by Christmas, but prospects have slipped — it’s a national embarrassment.

The views expressed in this blog are those of the author and do not necessarily represent the opinions of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies.

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This post was first published at the AGF Perspectives Blog.