After months of not talking, Speaker Pelosi and Leader McConnell had a phone call yesterday to move the ball on a relief package. Gone is talk of a $2T COVID-19 Relief Bill. And now the focus is on a smaller package that is likely to end up somewhere between $500B and $900B.

Washington is looking at a deadline of next Friday when Congress must pass a spending bill in order to avoid a government shutdown. The USG has been running of a Continuing Resolution (CR) since October 1 that maintains government spending at FY 2020 levels. Both House and Senate leaders want to have a so-called Omnibus Spending Bill that approves all departments of government in one bill but has the advantage of funding new priorities and changing spending levels to reflect current needs.

Added to the mix is growing optimism that the House, Senate and White House can agree on a COVID Relief package. Key programs are likely to be supplemental unemployment payments, a refunding of the PPP small business lending program, money for vaccine distribution and money to open schools.

The final hurdle is likely to be the insistence by Republicans to provide a liability shield against lawsuits related to the virus, and Democrats pushing for money directed at state and local governments. There appears to be di...

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