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Huge Gap Between the GOP and the Democrat Stimulus Plans

Summary:
Bickering Over PriceRepublicans want to spend about trillion with strong internal divisions. The Democrats are united behind Pelosi. They propose trillion.A video courtesy of The Street has key details.[embedded content]Clock Just Ran Out on 0 in Weekly Unemployment BenefitsAs noted on Sunday the Clock Just Ran Out on 0 in Weekly Unemployment Benefits.Calendar QuirkThe last full week in July ends Saturday July 25 for most state UI programs. And that is when the benefits expire, not July 31.Rubio proposes taking up the lapse in insurance "by the first week in August."That would be too late.Republicans Propose a Means Test Instead of 0 Weekly BenefitsOn Sunday, I commented Republicans Propose a Means Test Instead of 0 Weekly Benefits Republican Proposal DetailsEliminate the

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Bickering Over Price

Republicans want to spend about $1 trillion with strong internal divisions. 

The Democrats are united behind Pelosi. They propose $3 trillion.

A video courtesy of The Street has key details.

Clock Just Ran Out on $600 in Weekly Unemployment Benefits

As noted on Sunday the Clock Just Ran Out on $600 in Weekly Unemployment Benefits.

Calendar Quirk

The last full week in July ends Saturday July 25 for most state UI programs. And that is when the benefits expire, not July 31.

Rubio proposes taking up the lapse in insurance "by the first week in August."

That would be too late.

Republicans Propose a Means Test Instead of $600 Weekly Benefits

On Sunday, I commented Republicans Propose a Means Test Instead of $600 Weekly Benefits 

Republican Proposal Details

  1. Eliminate the $600 weekly benefit and replace that with a means test to rejigger benefits so that they replace roughly 70% of a worker’s former wages.
  2. Another round of direct $1,200 payments to would be sent to the same group of Americans as the last round—$1,200 to individuals with adjusted gross incomes below $75,000 and married couples making less than $150,000. Payments would be gradually reduced for incomes above those levels before they are phased out entirely.
  3. $100 billion in aid to schools and universities and additional money for coronavirus testing.
  4. State and local governments would get no additional aid, but more freedom on how to spend previous money.
  5. The Republican bill would make it harder to successfully sue businesses, schools and health-care providers in coronavirus-related cases.
  6. Estimated total cost of about $1 trillion

More Details On Point 1

  • The GOP proposes to cut the enhanced unemployment benefit from $600 to $200 per week through September. That is in addition to what recipients get from states unemployment insurance.
  • The GOP also proposes to set the maximum assistance at 70% of a worker’s previous wages, with a cap of $500 per week.

These are huge cutbacks that Pelosi is unlikely to agree with quickly if at all. 

Senate Majority Leader Mitch McConnell (R., Ky.) has said he expects to take at least a few weeks.

If so, that is three weeks of missed $600 checks. In addition the benefits stopped flowing completely in states with minimal weeks of unemployment insurance.

Advantage Democrats

Because of Republican delays, Democrats can hold out for more and blame Republicans for all of it.

Under this scenario, they would agree to a deal after a couple of weeks, then blame Trump and the Republican Senators for the difference 

Philosophically Speaking

Philosophically, people should not make more being unemployed than employed.

Politically speaking, the Republicans just stepped on a landmine.

Weeks or Longer Delay

Via MarketWatchThe Republican proposal on unemployment benefits, simply put, is unworkable. It will delay benefits for weeks if not months as we slide into a greater degree of recession,” said Chuck Schumer, Democratic Senate Minority Leader.

Democrats Favored to Win the Senate

Please note that the Democrats are Now Favored to Win the Senate.

This update will not help the Republican cause. 

Trump Will Lose to Biden

For analysis of why Trump will lose to Biden, please see Only 13 Percent of Voters are Still Undecided

Republican bickering can easily turn things into a Democrat tidal wave.

Mish

Mike Shedlock
Mike Shedlock (Mish) is a registered investment advisor representative for SitkaPacific Capital Management (http://www.sitkapacific.com/). Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

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