Some White House economists are questioning whether another coronavirus spending package is needed because its positive effects wouldn’t be felt until after the election, according to people familiar with the matter.
“There’s a new consensus among the economists at the White House that there’s no sense in more coronavirus aid right now,” said Stephen Moore, an outside economic adviser to President Trump.
“It’s too late for that. The money appropriated won’t be felt until after the election. It’s too late to flood the zone with cash to make any difference now,” said Moore, who met with multiple senior White House economists on Monday.
Publicly, the Trump administration and lawmakers of both parties favor enacting more relief. But Congress has struggled to pass legislation. The parties are at odds over the cost of the bill. Republicans are seeking $1 trillion, while Democrats are asking for at least twice that amount.
Some in the White House have shifted because of the economic growth since the $1.7 trillion CARES Act relief package expired at the end of July.
“We went down the line, and all the White House economists said that the economy is picking up pretty well, it doesn’t need training wheels anymore. It’s doing just fine on its own,” said Moore, who is also a contributor to the Washington Examiner.
Multiple former senior administration officials also said that White House economists are increasingly doubtful about whether another package is needed.
“The recent data has been quite good, with aggregate consumer spending up and retail sales very positive. The White House sees that a lack of recovery doesn’t seem to be a problem right now,” said Casey Mulligan, former chief economist for Trump’s Council of Economic Advisers and an economics professor at the University of Chicago.
Mulligan said the narrative among economists at the White House has flipped, in private, over the past few weeks due to Trump’s recent executive orders and the economic growth that is occurring without further government aid. In August, Trump used a series of executive actions to suspend payroll taxes, extend unemployment benefits, slow evictions, and defer student loan payments.
Nevertheless, top administration officials are lobbying Congress for more aid, and the official position is that the administration favors relief.
“We would still like to pass needed relief for working families,” said a senior administration official. “The impediment to a deal isn’t the election but the speaker’s insistence on giving a trillion dollars to state and local governments, among other issues.”
Trump’s top economic adviser, National Economic Council Director Larry Kudlow, said that he would like to see another relief package even if many sectors of the economy are coming back strongly.
“I don’t think the V-shape recovery depends on the package, but I do think a targeted package could be a great help,” Kudlow said on CNBC on Tuesday afternoon.
Treasury Secretary Steven Mnuchin and Federal Reserve Bank Chairman Jerome Powell appeared before the House Financial Services Committee during a hearing on the federal government’s response to the coronavirus on Tuesday. Both said that further aid from Congress was still needed.
“I believe a targeted package is still needed, and the administration is ready to reach a bipartisan agreement,” said Mnuchin.
Mnuchin said that the focus of the aid should be on schools and employers.
“It should be focused on kids and jobs and areas of the country that are still hard-hit, particularly areas such as the travel business and others, restaurants. I think there is broad bipartisan support for extending the [Payroll Protection Program] to businesses that have had revenue drops for a second check. I think small businesses are a large priority in that,” Mnuchin said.
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Original Author: Nihal Krishan
Original Location: White House economists question if another relief package is needed before election