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Bipartisan Proposal Seeks $908 Billion Economic Stimulus Package

  • Centrist senators pitch $908 billion package in effort to break impasse over new economic stimulus
  • Small business support would make up the largest portion of the bill, with $288 billion appropriated to support lending programs
  • Proposal faces uncertainty due to criticism from both sides of the aisle as well as a government funding bill taking precedence

A group of centrist lawmakers in the Senate is floating a $908 billion package for economic stimulus, hoping to break a months-long partisan impasse over the size and scope of new relief. The proposal comes as the nation grapples with a surge of COVID-19 cases and signs of a slowing economic recovery.

Small business support accounts for the largest component of the bill, with $288 billion set aside for this purpose. The funding would go toward reviving the Paycheck Protection Program and extending the Economic Disaster Recovery Loan program, which is currently set to expire on Dec. 31. The proposal would also put a temporary moratorium on some coronavirus-related lawsuits against businesses.

Other key components include $180 billion to support an additional $300 a week in supplemental unemployment insurance, $160 billion in aid to state and local governments, and $82 billion for education. A total of $45 billion would be directed to the airlines and other recipients in the transportation industry.

President-elect Joe Biden has voiced his support for passing economic relief now, with the potential for pursuing additional aid after his inauguration in January. However, the proposal has also received criticism from both Democrats and Republicans, including dismay over the lack of a second round of $1,200 stimulus checks to American households.

The parties have been unable to come to a consensus on a new economic stimulus bill since passing the bipartisan CARES Act last spring in response to business lockdowns and other economic fallout from the COVID-19 pandemic. A $2.2 trillion measure passed in the House failed to gain traction in the Senate, and Democrats rejected Senate Republicans’ efforts at a $500 billion package as insufficient.

A previous bipartisan proposal of $1.5 trillion in aid helped kickstart negotiations between House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin, though these talks ultimately fizzled. However, Pelosi and Mnuchin have reportedly resumed discussions on new stimulus.

One major sticking point has been the cost of a new round of stimulus. Pelosi has previously said any bills below $1 trillion will be insufficient, while Senate Republicans have generally rallied behind $500 billion as a ceiling. There are also substantial disagreements between the parties on certain issues; Democrats have largely opposed liability protections for businesses, while Republicans have typically been cool to the idea of funding for state and local governments.

Tuesday also saw a leaked draft of a stimulus proposal from Senate Majority Leader Mitch McConnell, which maintains the “skinny bill” strategy and dedicates $332 billion to small business relief. It omits any further unemployment benefits or stimulus checks.

Many economists have urged a new round of stimulus to help foster along the economic recovery, especially as millions of Americans are set to lose federal unemployment assistance when these programs expire at the end of the year. However, the stimulus bill is unlikely to take priority as Congress must pass a spending bill by Dec. 11 to avoid a government shutdown.

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