Biden and Congress focus on relief strategy; GameStop grabs attention
Covid Relief
The Democratic leaders in Congress are working with the White House to determine the best strategy to get a big Covid Relief bill through Congress by the target date of March 14. Why March 14? Under the Covid bill passed at the end of last year, extended unemployment and the $300 a week federal supplemental payment expire on March 14, a date that is being referred to in DC as the Unemployment Cliff.
In the Senate a bipartisan group of 16 Senators has meet with senior White House staff in an effort to reach an agreement; but at this point it is not clear if compromise is possible. Democrats have made clear that in 2009, after President Obama’s landslide victory, Democrats spent too much time on both financial crisis relief and immigration negotiating with Republicans. Most Democrats are convinced that because of the fruitless talks they ended up with weaker legislation. Congressional Democrats are committed to not make the same mistake this time even though they are holding weaker cards with paper thin majorities in both the House and the Senate.
Both Schumer and Pelosi have announced that they are going to put the machinery in motion that is needed to approve the Biden Covid package through Reconciliation. Reconciliation is part of the budget process and the first step is the approval of a budget for Fiscal Year 2021. Last year there was no budget resolution due to divisions between the House and the Senate. Both chambers will start the budget resolution process next week but getting it through the Senate with rules allowing for unlimited amendments will be time consuming. However, having started the budget process will give the Democrats some negotiating strength as they sit down with Republicans.
There have been talks behind the scenes that indicate the White House would like to find a bipartisan deal; but it wants the basic blueprint of the programs to remain intact though the dollar amount could be reduced below $1.9T. Read this to say that there is some negotiating room on the size of the proposed $1,400 individual stimulus checks.
Washington’s Reaction GameStop and Robinhood
When talking to students I often make the point that the political spectrum in the US often looks more like a circle than a line; and the issue of GameStop/Robinhood and other exchanges closing down certain trades has demonstrated this fact.
Both liberal and conservatives have called for hearings on the GameStop/Robinhood issue. Making the rounds on Capitol Hill was the story of how AOC tweeted the unfairness of the Robinhood action against small investors, and Senator Ted Cruz Tweeted: “fully agree.” The House and Senate Banking Committees have both announced hearings, and the SEC, as expected with a disrupting market event, has announced they are looking into the issue.
Another tidbit making the rounds in DC is that on Friday Robinhood posted a job for a Manager of Federal Affairs. Robinhood has been represented in DC by an array of firms; but with all the attention of the past week, and the promise of hearings, they decided there was a need for their own person on the scene. Likely more smoke than fire at the hearings but definitely an emerging issue in the new Congress.
