Senate Democrats Blocked Slimmed-Down Stimulus Package by the GOP, Negotiations Continue

Stimulus checks may not come before the 2020 presidential elections. This is after Democrats blocked the slimmed-down stimulus package offered by the GOP on October 21. This means that the negotiations are still ongoing.

The stimulus package will be late

There is a little change that Congress will pass economic stimulus before the November 3 election. Less than two weeks before Election Day, the chief negotiators from both the Democrats and Republicans have still not decided on the amount of stimulus package that will be given.

Although the talks headed by Treasury Secretary Steve Mnuchin and House Speaker Nancy Pelosi could continue until November, an agreement's likelihood is slowly fading. After Senate Majority Leader Mitch McConnel said last week, he would not go about $500 billion for a stimulus package.

Also Read: Are the $1,200 Stimulus Checks Coming? Deal Could be Reached Within 5 days When Congress Returns

Economist Alec Phillips said that some of the most significant issues remain unresolved, like aid for unemployment and checks sent to those who are from low-income communities. It could mean the Congress is far from striking a deal, according to The Washington Post.

Democrats and Republicans are working on their massive differences, with most of the GOP wanting to pass a $1.8 trillion budget and Democrats stating they will not go lower than $2 trillion. It is unlikely that Mnuchin and Pelosi will reach a deal before the election.

Even if the Democrats and Republicans agree, the said deal will take time before it can be passed and distributed. This means it will still happen after Election Day, according to CNBC.

Effects on the stock market

Due to the pending talks of a second stimulus package, the financial markets have risen and fallen over the past few months. The White House and the congressional Democrats have been wrangling over the issue since the CARES Act that was adopted in March ultimately expired in June.

The $2.2 trillion CARES Act was able to help the economy as $1,200 stimulus checks were given to single American taxpayers, $2,400 for married couples, and $500 for eligible dependents. The money had kept most people from filing for unemployment benefits.

And now that the CARES Act has expired, the second round of stimulus checks is needed. Despite the surging needs, Republicans are looking for a smaller deal that would focus more on business loans and payments to eligible individuals, according to Forbes.

Democrats, on the other hand, are pushing for a more encompassing measure that would give funding to state and local governments and reinstitute payments of $600 a week above what workers would normally get in unemployment insurance.

If there will be no bill passed by the election, the result will determine the final aid package. If President Trump defeats Joe Biden, the current bill will get through another session prior to the new Congress is seated in January.

If Joe Biden wins the election and the Democrats take control of both chambers in Congress, there would be less incentive for them to push through a bill now.

There are still no further details on what the Congress will do now that the Democrats have blocked the GOP's "skinny bill."