By Victor Reklaitis, MarketWatch
As Washington works on its fourth legislative response to the coronavirus crisis, analysts are predicting that the next big spending deal isn’t likely to become a reality for weeks.
The next bill is no longer sparking talk about huge outlays on infrastructure improvements, but rather it looks set to focus on extending programs from the last package.
A bipartisan agreement on a new package costing $1 trillion is possible “between the end of April and the middle of May,” said analysts at Beacon Policy Advisors in a note on Monday.
House Speaker Nancy Pelosi said a conference call Monday afternoon that current aid measures aren’t sufficient, and another $1 trillion is needed in the next package, the Associated Press reported.
In a Saturday letter to her colleagues in the Democratic-led chamber, Pelosi said the next bill should “extend and expand” the measures in Washington’s “Phase 3” bill, which is offering direct payments to Americans and aid to small and large businesses. President Donald Trump signed that $2 trillion measure, known as the CARES Act, into law on March 27.
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“CARES 2 must go further in assisting small businesses including farmers, extending and strengthening unemployment benefits and giving families additional direct payments,” wrote the California Democrat, after pulling back on Friday from her earlier calls to include infrastructure spending in the ”Phase 4” bill.
“We must also provide the desperately needed resources for our state and local governments, hospitals, community health centers, health systems and health workers, first responders and other providers on the front lines of this crisis,” she said in her letter.
Senate Majority Leader Mitch McConnell, for his part, said on Friday that “there will be a next measure” after earlier saying he was taking a wait-and-see approach. The Kentucky Republican also said the upcoming bill “should be more a targeted response to what we got wrong and what we didn’t do enough for — and at the top of the list there would have to be the health care part of it.”
Congress is on recess and slated to get back to work on April 20, though lawmakers could return to Washington, D.C., sooner or later than planned. More legislators have voiced support for remote voting, but operating that way doesn’t look likely in the near term, with a House Rules Committee report recently pouring cold water on the idea.
“I do think we have to come back relatively soon,” said Senate Minority Leader Chuck Schumer in a conference call with reporters on Monday. The New York Democrat also said Congress is “going to definitely need to do” another coronavirus bill.
Schumer and other Senate Democrats on Tuesday called for the next package to include a “ COVID-19 Heroes Fund ” that would give frontline workers up to $25,000 each.
“There will be negotiations similar to the original CARES Act,” Beacon’s analysts said. They also noted that the White House reportedly has expressed support for having the next measure include a payroll-tax cut, a capital-gains tax cut , the creation of 50-year Treasury bonds and a waiver that would clear businesses of liability from employees who get the coronavirus causing COVID-19 while working.
Other analysts also have warned that a fourth virus package won’t happen for several weeks. Such a measure is likely to get passed in mid-May, predicted Henrietta Treyz, director of economic policy research at Veda Partners, in a note on Tuesday. Besides following the $2 trillion package, it also would come after a mid-March bill costing about $100 billion that has targeted paid leave and testing, as well as after an initial $8.3 billion emergency spending plan that came together in early March.
U.S. stocks /zigman2/quotes/210598065/realtime DJIA +0.36% /zigman2/quotes/210599714/realtime SPX +0.45% have been plunging for weeks on coronavirus-related worries but have pared some of their losses thanks in part to hopes surrounding Washington’s aid programs.
This is an updated version of a report first published on April 6, 2020.