Rescue bill hangs in the balance while Biden is apparent nominee

Tom Block’s Takeaways: Rescue bill hangs in the balance while Biden is apparent nominee

  • Senate failed last night to move on coronavirus Phase 3 bill, McConnell tried to write bill without Speaker Pelosi, strategy failed, hope to pick up pieces today.
  • Secretary of Treasury Mnuchin, again key player, needs to cut deal with Democrats, goal is to get agreement today.
  • House is not in session. Therefore, to pass bill in next few days need to get unanimous consent in House, only way to pass with Members not in DC. Senate is operating with narrow 48 to 47 Republican majority with five Republicans in quarantine.
    Points of contention appear to be operations of $500 billion stabilization fund administered by Treasury, money to state and local hospitals, and funds for hospitals.
  • House will need its own items in legislation, may focus on increased unemployment and small business assistance.
  • With markets looking for action an agreement should come today but no later than Friday.
  • Former Vice President Joe Biden widens delegate lead over Senator Sanders as the Senator looks for exit strategy.

After the Senate passed the Phase 2 coronavirus bill that was exclusively written by the White House and House Democrats, Republican Leader McConnell was determined to write the huge Phase 3 bill in the Senate.  However, with last night’s vote where all Democrats opposed the McConnell bill bipartisanship has slipped despite the growing crisis. In my view McConnell made a serious miscalculation thinking he could write a bill without direct involvement of Speaker Pelosi.  

There is widespread, bipartisan agreement on much of the bill that includes billions for direct checks to Americans earning less than $75,000, expanded unemployment assistance, a massive program for small businesses, and some sort of aid to large businesses most exposed to the virus.  However, it needs to have some specific provisions that Speaker Pelosi and House Democrats can claim credit for and that will be the focus of attention today with the effort led by Treasury Secretary Mnuchin.

There are also some serious rules and procedural issues.  With five Republican Senators in quarantine, Senator McConnell only has a 48 to 47 majority.  Of the five, only one, Senator Rand Paul, has been tested positive for the disease, therefore maybe in protected suits the other four could get to the floor to cast their votes.

More problematic is the fact that the House is not in session, most of the Representatives are back in their districts. With the sharp cutback in air travel it could be days before the House has a majority of its members in DC.

There is only one way to pass a bill in the House without its members there and that is with unanimous consent. Meaning there is not a vote, just a ruling by the chair that there is no objection heard on passing the bill.  The House does this routinely. However, the Republicans have very conservative outliers who often object, but President Trump would likely get their buy-in.  Speaker Pelosi may have a more difficult issue with her most progressive members led by AOC. This is why she will need some signature House accomplishment in the final version of the legislation.

Markets are likely to drive some decision from Congress as early as today, but definitely this week.

2020 race

The race for the Democratic nomination effectively ended last week when Vice President Biden defeated Senator Sanders in all three large states that held primary elections.  Of the 1,991 delegates needed to win the nomination Biden currently has 1,201 to Sanders 896.  But, like all aspects of American life, the Democratic nomination has been thrown off-course by the coronavirus. Many states have now postponed their primaries until June due to the virus.  This means that even though the former Vice President seems on a clear course to win a majority of delegates, he won’t be able to reach the magic number until the summer.  This puts tremendous pressure on Biden and the Democratic leadership to create an exit path for Senator Sanders.

In 2016 the race between Hilary Clinton and Senator Sanders ended in much acrimony that many believe eventually led to Donald Trump’s narrow victory.  Democrats are committed to find a resolution this year that gives a pathway for Sanders’s mostly young supporters, to stay in the process and vote for Biden.  The selection of a Vice Presidential candidate may serve as a way to smooth the transition from primary contest to general election. For further information, please contact sales.

Disclosures (show)