(Bloomberg) -- The U.S. Senate’s top Republican and Democrat faced off on Monday over the size of fiscal stimulus needed to support the economy, dimming any hopes for an immediate package as lawmakers reconvene following the election.
Majority Leader Mitch McConnell said that Congress should pass a limited stimulus bill by year-end, in the wake of positive data on a slide in unemployment and after encouraging news on a Covid-19 vaccine.
Democratic leader Chuck Schumer by contrast said Republicans “have proposed totally inadequate solutions” on Covid-19 relief.
News from Pfizer Inc. that its experimental vaccine might be 90% effective introduced a fresh dynamic into the outlook for stimulus, and spurred a rally in U.S. equities Monday. While hailing the development, President-elect Joe Biden warned that the U.S. still faces a “dark winter” with the coronavirus continuing to spread.
“That still takes time -- it’s an eternity to wait until February, let alone the time it will take to distribute a vaccine fully,” said Diane Swonk, chief economist for Grant Thornton LLP. Delays in passing another stimulus risk damaging the economy’s capacity to grow for years to come as more people slip into long-term unemployment, small businesses collapse and families postpone or give up on education, she said.
Jobs Report
For the moment, the American economic recovery has continued even with the expiration of fiscal support. The jobless rate fell by a percentage point, to 6.9% in October, data showed Friday.
“It turns out the news is a whole lot better” lately, McConnell said on the Senate floor. “I hope our Democratic colleagues will finally put aside their all-or-nothing obstruction and let the targeted pandemic relief -- targeted pandemic relief is what we need -- let it move forward.”
McConnell said that the Senate should pass relief in the post-election congressional session, which began Monday and is slated to end in mid-December.
“To be clear, our work is not finished. Too many Americans are still suffering economically,” he said.
Pelosi’s Stance
Senate Republicans have supported a $500 billion virus package, without $1,200 stimulus checks for individuals or aid to states and local governments.
Schumer on the Senate floor called on Republicans to pursue a “bipartisan solution” rather than the stunts of recent months.
House and Senate Democrats continue to push for a $2.4 trillion measure. House Speaker Nancy Pelosi said Friday that a smaller bill “doesn’t appeal to me at all.”
“That isn’t something we should be looking at,” she said.
Business Pressure
The U.S. Chamber of Commerce on Monday called on Congress to complete a package this year as the economy has yet to recoup losses the fallout of from Covid-19. The U.S. still has more than 11 million workers unemployed.
“We have not yet beaten the coronavirus or achieved the economic recovery we all desire. Our leaders have wasted five months already. They can’t waste another three,” chamber vice president Neil Bradley said in a statement.
One vehicle for at least some Covid-19 assistance is a vital spending bill that will be needed to avoid the federal government shutting down on Dec. 11, when current funding runs out. Pelosi said Friday that rather than a short-term stopgap measure she favored an omnibus spending bill to complete the appropriations process for the fiscal year through next September.
The Senate is expected to release proposed appropriations bills on Tuesday.
Extended unemployment benefits and pandemic jobless benefits for gig workers are set to expire at the end of the year. With airlines and small businesses under mounting pressure, it will be hard for Congress to do nothing, said Alec Phillips, chief U.S. political economist for Goldman Sachs Group Inc.
Phillips argued that it’s “reasonably likely” Congress will pass additional stimulus in negotiations before the Dec. 11 expiration of federal funding.
Senators gave differing indications. Appropriations Committee Chair Richard Shelby said about wrapping Covid-19 relief into spending bills: “There’s been talk about that, but we haven’t seen that. It might not be a bad idea if we can agree on stimulus.”
But Senator Roy Blunt, a Missouri Republican, said getting a stimulus deal in the lame duck session will be “hard.”
“Both sides are saying they want one but both sides are saying they only want the one they want,” he said.
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