The Democrats in the House of Representatives were expected to pass their $3 trillion partisan aid plan in a House vote Friday as we went to press. Speaker of the House Nancy Pelosi put together a bill that had little if any Republican support, skipping Congressional hearings, and not including the most radical provisions desired by her left-wing progressive Democrats.

Progressives have threatened to oppose the bill, but while on the last relief bill progressives were disappointed nearly all supported the bill. Similarly, some of the more moderate Democrats who come from districts that were key to Democrats gaining control in 2018 have reservations with the scope and price of the bill.

The core provisions of the legislation refund the popular programs in the CARES Act and expands relief to include nearly $1 trillion for aid to state and local governments. The bill calls for another round of $1,200 stimulus checks, extends through January the $600 a week unemployment supplement and in a new provision provides funding for the feds to pay 100% of COBRA health insurance premiums for unemployed workers.

Progressives had wanted to use the crisis to offer Medicare or Medicaid to the unemployed but that seemed a road to far for the Speaker. I think the COVID-19 outbreak has increased support for broader eligibility for a Medicare For All program. Despite the comments in support of more fiscal stimulus from Federal Reserve Chairman Jerome Powell (see page 6), Congressional Republicans and the White House continue to hold their finger on the pause button. Senate Leader Mitch McConnell conceded this week that a fifth coronavirus bill is likely to be needed. However, it is unlikely that a bipartisan consensus can be reached prior to Memorial Day. Another round of individual checks and extension of federal unemployment benefits may well be part of a bipartisan bill; the stumbling block may be how to structure aid to state and local governments and the Republican demand that some sort of liability protection for business be in the next bill.

China Update

President Donald Trump continues to struggle to find the right course for US/China policy. He and other Republicans are focusing their attention of China’s role in the spread of the pandemic. From dangers posed by “wet markets” there to the Wuhan lab where theories had the virus started, China is an easy target to change the subject pushed by critics that the Administration’s delay and failure to address the early days of the virus worsened the spread in the US.

Allies of the President have introduced legislation to grant him more sanction choices if China does not meet certain disclosure and policy requirement; but the President has been silent on it and has reservations about undermining the China Phase 1 trade deal, the signature accomplishment of his first term. Furthermore, agricultural supporters in key states are relying on purchases from China. This points to heightened tension and tough policy decisions in the coming weeks with respect to China/US relations.

Figure: Top Trump Tweets

House Passes $3Tln Aid Bill; Will Likely Be Rejected in Senate 2
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