US resumes talks on new fiscal stimulus package

Washington, Dec 2 (efe-epa).- The seriousness of the economic crisis caused by the coronavirus pandemic in the US and the election victory of Democratic presidential candidate Joe Biden have once again revived talks between Republican and Democratic lawmakers for a new fiscal stimulus package after months of stagnation as the virus has surged.

On Wednesday, conversations got started again in the halls of Congress regarding the proposal presented by a bipartisan group of legislators on a new stimulus package valued at $908 billion to help bolster the US economy and aid individuals and small businesses.

Republican Senate Majority Leader Mitch McConnell acknowledged on Wednesday that Democrats and his GOP colleagues were moving closer to finding agreement on a new package, saying that the Democrats have shown a new willingness to discuss the matter “in good faith.”

The talks, however, are running against the clock, given that the current Congress will be in session for less than two more months with the newly reconstituted Senate and House to take office on Jan. 20, 2021, reflecting the results of the Nov. 3 election.

GOP senator from Utah Mitt Romney, speaking at a Congressional news conference on coronavirus relief on Tuesday, said that he is a “deficit hawk” but the pandemic has created a crisis in the US and now is the time to “borrow money.”

“COVID has created a crisis, and in a crisis the people expect Congress to act, and this group (of lawmakers, including himself) has come together to propose action that could respond to this crisis,” Romney said, adding that “It’s simply unacceptable for us not to respond to help in this circumstance.”

“Maybe the only time to buy money – borrow money, is when there is a crisis, and this is a crisis. We want to help people at this particular time,” he added.

The figure of $908 billion is in between the Democrats’ latest proposal of $2.4 trillion and the Republican proposal of $650 billion.

It includes $288 billion in aid for small businesses, along with $160 billion in assistance for state and local governments, one of the priority elements for Democrats but one which Republicans have been opposing.

In addition, the bill allocates $16 billion for vaccine distribution, testing and contact tracing for Covid-19 cases, $82 billion for education and $45 billion for the transportation sector, including airlines and Amtrak.

President-elect Biden has insisted on the need for a “robust” package of fiscal support, along with his pick for Treasury secretary, former Federal Reserve chair Janet Yellen, who said that inaction could cause even more devastation to the economy.

“I know times are tough, but I want you to know that help is on the way,” Biden said Tuesday in introducing top members of his desired economic team, adding that these officials – who must be confirmed by the Republican-controlled Senate – will “move fast to revive this economy.”

Regarding another coronavirus relief package, Biden urged lawmakers to take action because “for millions of Americans who have lost their jobs or hours and have had to claim unemployment, we have to deliver them immediate relief.”

“Right now, the full Congress should come together and pass a robust package for relief to address these urgent needs,” Biden added. “But any package passed in a lame-duck session is likely to be, at best, just a start.

A large part of the $2.2 trillion fiscal stimulus package approved in March has concluded or is close to expiring, and thus one of Biden’s key actitivies in the days immediately after his inauguration on Jan. 20, 2021, will be to push for a new rescue package.

On Wednesday, Patrick Harker, the president of the Federal Reserve Bank in Philadelphia, warned at a virtual roundtable that signs of economic stagnation are evident, saying that this could be attributed to the continued spread of the coronavirus as well as to the evaporation of previously allocated fiscal support.

The bipartisan plan seeks to extend until March the jobless benefit, providing $300 per week to people who have lost their jobs, although this is just half the amount Democrats had originally asked for.

The latest forecasts by the Fed are that the US economy will contract by 3.7 percent this year and 2020 will end with unemployment at 7.6 percent.

The head of the Peterson Institute, Adam Posen, emphasized that the US will see an economic recovery beginning in “April or May” with or without the package currently under discussion, once vaccines against the coronavirus begin to be provided to most Americans.

But the question of whether a stimulus package would be provided in December or January will determine how much human suffering there will be between now and then, he said.