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By Yuval Rosenberg and Michael Rainey

Plan B, as in Bust

Plan A went nowhere fast. Plan B isn't looking much better. With
congressional negotiations on a coronavirus aid package at an impasse,
lawmakers scrambled Thursday to try to address the scheduled expiration
Friday of enhanced unemployment benefits for millions of Americans and
the broader devastation wrought by the pandemic - or at least make a
good show of it.

Sen. Ron Johnson (R-WI) tried to unanimously pass legislation to
continue emergency federal unemployment benefits, but at 66% of an
individual's lost wages, or about $200 per week rather than the $600 a
week that has been in place since March. Senate Minority Leader Chuck
Schumer (D-NY) blocked the effort.

"They've woken up to the fact that we're at a cliff, but it's too
late," Schumer said of the standalone unemployment extension Thursday,
according to Politico. "It's too late because even if we were to pass
this measure, almost every state says people would not get their
unemployment for weeks and months. All because of the disunity,
dysfunction of the Republican caucus."

Schumer in turn tried to unanimously pass the $3 trillion package passed
by the House in May. Republicans blocked it. Later, Sen. Martha McSally
(R-AZ) tried to unanimously pass a one-week extension of the $600
benefit. Schumer blocked it, calling it "a stunt,"
and again
tried to pass the Democratic bill, which was again blocked.

Senate Majority Leader Mitch McConnell (R-KY) set up a likely vote next
week to address the expiring unemployment benefit. The Hill's Jordain
Carney reports
:
"Senate Republicans successfully brought up a bill they will use as a
vehicle for their competing unemployment proposals, none of which appear
to have the votes needed to actually pass next week." She adds that
McConnell did not say what plan he will try to force a vote on, but
other GOP senators say they expect it will be the plan from Johnson and
Sen. Mike Braun (R-IN).

Sens. Mitt Romney (R-UT), Susan Collins (R-ME) and McSally have a
competing bill that would reportedly let states enact an 80% wage
replacement or a flat $500 weekly supplement that would scale down by
$100 a month in September and another $100 in October.

"We've had enough rope-a-dope. We've had enough empty talk. It's
time to go on the record," McConnell said from the Senate floor, Carney
reports.

Any Senate plan would require 60 votes for passage, meaning at least
seven Democrats would need to join all Senate Republicans.

**Why it doesn't matter:**All the maneuvering amounted to little more
than political theater, with negotiations having devolved into partisan
bickering, finger-pointing and attempts to gain leverage. "The
legislative shenanigans were not meant to actually enact policy, but
rather to help further the political blame game as Congress prepared to
leave town without an agreement," The Washington Post reports.

**The bottom line:**"The next meeting between Schumer/Pelosi and
Mnuchin/Meadows will be at 8p tonight," CNN's Phil Mattingly reports
. "To
this point they've managed to meet three times, for more than three
total hours, and make roughly 0 progress toward a deal."

The official expiration tomorrow of the $600 enhanced unemployment
payments appears inevitable, though the deadline could provide some
incentive for a deal. If the benefits expire as expected - the last
checks have already gone out millions of out-of-work Americans face a
sharp, sudden drop in income. The Washington Post's Jeff Stein
highlighted
the severity of the potential cutoff in aid: "If unemployment benefits
go away completely, more than 30 million Americans will see an income
cut of between 50 percent and 75 percent -- virtually overnight."

Bloomberg's Steven Dennis writes

(sarcastically, in case it needs to be said) that all is not lost: "The
Senate managed to designate July National Blueberry Month after failing
to act on virus relief/UI benefits."

Read more, if you can stomach it, at The Washington Post
.

GOP Senators Propose $1,000 Stimulus Checks for Adults and Children

Four Republican senators on Thursday introduced a competing idea for the
next round of coronavirus direct payments, The Hill's Naomi Jagoda
reports
:

"Under the bill from GOP Sens. Bill Cassidy (La.), Steve Daines (Mont.),
Mitt Romney (Utah), and Marco Rubio (Fla.), both adults and children
would receive stimulus payments of $1,000.

"The payments that Congress provided for in legislation enacted in
March, known as the CARES Act, were $1,200 per adult and $500 per child.
...

"Under House Democrats' proposal, called the Heroes Act, families would
receive payments of $1,200 per non-dependent adult and $1,200 per
dependent for up to three dependents. The HEALS Act would provide
payments of $1,200 per adult and $500 per dependent."

Under every proposal, eligibility for the full payments would be limited
to individuals making up to $75,000 and married couples with incomes of
up to $150,000, with payments phasing out above those levels.

An Unprecedented Collapse for the U.S. Economy

The U.S. economy shrank in the second quarter at the fastest pace on
record by some measures, with gross domestic product falling by 9.5% on
a quarterly basis as businesses closed and millions of Americans stayed
home in response to the coronavirus pandemic.
On an annualized basis - the rate for the full year, assuming the
quarterly results were repeated in each quarter - the economy shrank
at a rate of 32.9%, the fastest since 1946, according to Deutsche Bank
.

"The collapse was unprecedented in its speed and breathtaking in its
severity," The New York Times said

Thursday. "The only possible comparisons in modern American history came
during the Great Depression and the demobilization after World War II,
both of which occurred before the advent of modern economic statistics."

Although the numbers are shocking, they were not unexpected; economists
polled by Dow Jones had expected to see a decline of 34.7%.

Mark Zandi, chief economist at Moody's Analytics, said the report
"highlights how deep and dark the hole is that the economy cratered into
in Q2. It's a very deep and dark hole and we're coming out of it,
but it's going to take a long time to get out."

The White House put a relatively positive spin on the report Thursday,
with President Trump's Council of Economic Advisers saluting
Americans' resiliency and the strength of the economy heading into the
crisis. "The magnitude of this contraction reflects the gravity of the
economic sacrifice Americans made to slow the spread of COVID-19 and
prevent greater tragic loss of life and health," the council said in a
statement
.
"The country mitigated pressures on hospital capacity and allowed
medical professionals the time to learn how to more effectively treat
this disease. The Trump Administration will continue to support America
as we build a bridge to the other side of this crisis."

But that bridge is looking harder to cross as the size of the crisis -
and the lack of recent progress (see new unemployment figures, below)
- has come into sharper focus. "A couple of weeks ago there was a lot
more optimism that we would see a strong V-shaped recovery," Edward
Moya, an analyst at currency trading firm OANDA, told Politico
.
Now, however, "there is a lot of bad news about how some areas are
handling the virus. And every day we don't have a new stimulus
agreement in place is hurting the economy."

Jobless Claims Edge Higher Again

Initial jobless claims rose for the second week in a row, with 1.43
million workers filing for state unemployment benefits. Another 830,000
people applied to the Pandemic Unemployment Assistance program, which
provides benefits for self-employed and gig workers, bringing the weekly
total to well over 2 million. It was the 19th week straight that
unemployment claims have exceeded 1 million, a level that hadn't
previously been reached.

The data confirm many economists' fears that the recovery is losing
steam and may be reversing course. "What's more worrying is that months
after the virus arrived, we still have more people losing their jobs
each week than at any point during the Great Recession," said

Justin Wolfers of the University of Michigan. "The short-term
virus-related economic suppression is turning into a more enduring
recession."

Quote of the Day

**"Over his entire career, I can't recall a single forecast that he
made that was accurate. You know, there's the old joke about the
economist that predicted seven out of the last four recessions. Kudlow
makes that guy look good."**

- An unnamed banker who used to work with White House economic adviser
Larry Kudlow at investment bank Bear Stearns, in a blistering Vanity
Fair profile

of Kudlow by William D. Cohan.

Send your tips and feedback to yrosenberg@thefiscaltimes.com
. Follow us on Twitter:
@yuvalrosenberg
,
@mdrainey

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News

* Trump Floats Delaying the Election, but Lacks the Authority

- Bloomberg

* Senate Republicans, White House Scramble on Unemployment Insurance as
Deadline Looms

- Washington Post

* U.S. Records a Coronavirus Death Every Minute as Total Surpasses
150,000 - Reuters

* Herman Cain Dies From Coronavirus

- Axios

* The Gulf Between Republicans and Democrats on Coronavirus Aid, in 9
Charts

- New York Times

* Judge Blocks Administration From Implementing 'Public Charge' Rule for
Immigrants During Pandemic

- CNN

* Almost 30 Million in U.S. Didn't Have Enough to Eat Last Week

- Bloomberg

* Pelosi Huddles With Chairmen on Surprise Billing but Deal Elusive

- The Hill

* Hundreds of Business Groups Call for Liability Shield in Coronavirus
Relief Package

- The Hill

* How a Secretive Pentagon Agency Seeded the Ground for a Rapid
Coronavirus Cure

- Washington Post

* Congress Seeks to Fix $120 Billion Tax Snafu in PPP Loans

- Wall Street Journal

* Stimulus Money for Airline Contractors Comes Under Scrutiny

- Wall Street Journal

* Shaheen, Chabot Call for Action on New Round of PPP Loans

- The Hill

* GAO: Higher Nuke Budgets Won't Add Much Capability

- Roll Call

* $25,000 Pod Schools: How Well-to-Do Children Will Weather the Pandemic

- New York Times

* This Is the Only City in America Where Unemployment Is Actually Down

- CNN

Views and Analysis

* Together, You Can Redeem the Soul of Our Nation

- Rep. John Lewis (D-GA), New York Times

* Why Changing Unemployment Payments Could Take Months

- Jim Tankersley and Tara Siegel Bernard, New York Times

* Born-Again Fiscal Conservatives Are Sign of Trump's Weakening Hand
in Congress

- Paul Kane, Washington Post

* By Threatening Unemployment Benefits, Republicans Risk Sending the
Economy Over a Cliff

- Washington Post Editorial Board

* 'A Meaningful Hit to the Economy': What Could Happen if Congress Cuts
Unemployment Benefits

- Rebecca Rainey and Eleanor Mueller, Politico

* Did a Third of the Economy Really Vanish in Just Three Months?

- Andrew Van Dam, Washington Post

* As Economy Backslides, Public Health Experts Outline How to
'Reset' Coronavirus Response

- James Hohmann, Washington Post

* This Republican Implosion Has Been a Long Time Coming

- E.J. Dionne Jr., Washington Post

* These Are the Top Coronavirus Vaccines to Watch

- Paige Winfield Cunningham, Washington Post

* Would a New Billionaires' Tax Be Constitutional?

- Bill Mahoney, Politico

* How the Trump Administration Allowed Aviation Companies to Keep Relief
Money That Was Supposed to Go to Workers

- Justin Elliott and Jeff Ernsthausen, ProPublica

* Preventing the Disappearance of America's Rural Hospitals

- Sens. Richard Durbin (D-IL) and James Lankford (R-OK), The Hill

* Electrifying Transportation Will Jumpstart the U.S. Economy and
Protect Public Health

- Matt Petersen, The Hill

**Copyright © 2020 The Fiscal Times, All rights reserved.**
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