Each day more and more is riding on Congress’s latest bill to respond to the coronavirus crisis—the struggling public health system, a cratering economy and, increasingly, President Donald Trump’s sinking chances at a second term.
As lawmakers on Capitol Hill and the White House began initial talks this week about a big-ticket successor to the $2 trillion CARES Act passed in March, presumptive Democratic nominee Joe Biden has opened up what looks like a comfortable lead over Trump, ahead in almost every poll as the president’s own job approval ratings decline.
The emerging legislation is likely to be the last major coronavirus-focused bill to clear Congress before Election Day. If it does even some of what the CARES Act did—direct stimulus checks with Trump’s name on them, extended unemployment insurance, more money for testing and treatment—it could give the president, and his re-election campaign, a much-needed shot in the arm.
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But Senate Republicans aren’t sure how lengthy a legislative lifeline to toss to the president—or even if they should hand one at all. Some lawmakers have a narrow, targeted extension of benefits in mind, while self-described fiscal hawks who are close Trump allies have started to loudly skewer the idea of another trillion-dollar bill, arguing that Trump would be damaged more if he approved such a bill than if he did not.
“I think that the conservative base is tired of spending money we don't have,” said Sen. Rand Paul (R-KY), “and actually exploding the debt by $5 trillion in six months offends a lot of conservatives in the party.”
Another staunch Trump ally in the Senate, Sen. Ron Johnson (R-WI), said it “boggles my mind” that the GOP conference isn’t more united in questioning the need for more spending. Speaking with The Daily Beast off the Senate floor on Thursday, Johnson rattled off figures about the growing federal debt and deficit during the crisis, something he argued should give all lawmakers pause about another package.
“I don’t think it’d be a problem not passing this trillion dollars. Not at all,” said Johnson, when asked if the lack of another coronavirus bill would be a political problem for Trump. “You take a look at what we haven’t spent of the $2.9 trillion [already appropriated] and spend it better.”
Passage of a narrower bill—rather than the broad, $1 trillion package that GOP leaders are eyeing, or even a delayed infusion of funds—could be a political disaster for all involved given the imminent deadlines ahead: extended unemployment insurance expires at the end of July, as does a moratorium on evictions, threatening the livelihoods of tens of millions of Americans made newly vulnerable by the pandemic.
But as Senate Republicans struggled to even get to the starting line to negotiations with Democrats—on Thursday, a draft agreement between GOP lawmakers and the White House was set to be introduced but was then scuttled to Monday—there seemed to be little alarm that falling short in countering the crisis gripping the country would have any kind of negative impact on Trump’s quest for another four years.
“We think the election’s going to be about, you know, public safety, about China, and about who they think is going to help build the economy,” said Sen. Rick Scott (R-FL).
Asked about the stakes of a timely stimulus bill for Trump’s presidency, Sen. John Kennedy (R-LA) said, “I can’t handicap that.”
“You’re naive if you say nobody ever considers the politics,” said Kennedy. “But in this environment, my prediction is, on the politics, that the experts will be wrong. They almost always are anyway.”
In other influential corners of official Washington, there is a whole roster of Trump confidants and associates who, since the dawn of the pandemic and economic crisis, have pushed the administration and Republican Party to smash the brakes on massive injections of federal rescue money. Some have echoed Paul’s warning that it would actually hurt the president’s 2020 prospects if he were to lean heavily on stimulus dollars for the American people and suffering workers.
On Monday, Art Laffer, a longtime conservative economist who informally advises Trump, was patched in via speakerphone to a White House meeting with the president and other top Republicans negotiating the next stage of coronavirus aid. Laffer said in a phone interview with The Daily Beast this week that his inclusion from Trump was “not pre-scheduled” and that the call came “out of the blue”; the president simply wanted Laffer, a giant in right-wing economics and a regular on Fox News and Fox Business, to get on the line to talk to GOP congressional leaders.
Laffer said that after he was patched in by Trump and the White House, he talked to the room about “health care [and] medical transparency,” his views on a payroll tax cut, and his opinions on “the difference between spending programs and tax cut programs”—a view on the right that is increasingly complicating administration officials’ plans to achieve another round of economic stimulus as the U.S. economy keeps crashing.
“If you pay people who aren’t working more [than they’d earn while working], then you’re probably gonna get less people earning,” he said, paraphrasing what he told the president and the other GOP officials present. “What I recommended on taxes is that you should tax people less, and on the spending side…[I said], obviously if you pay them more for not working, fewer of them will work…[It’d be a] bummer for employment.”
For months, other advisers to the president have cautioned the same, trying to nudge Trump away from some of his bigger-spending instincts. Early this month, Stephen Moore, another conservative economist who counsels Trump and administration brass, said he had just sent the White House a study he co-authored, arguing that “you’d see a lot more unemployment” if benefits were extended the way many on Capitol Hill wished. The study alleged that benefits in the first coronavirus-era stimulus package were responsible for keeping the unemployment rate higher than it otherwise might have been.
“If our numbers are accurate, it’s hard to see how Trump can get re-elected with millions and millions of people unemployed,” Moore stressed.
Fueling these conservatives’ concerns—besides sticker shock from a possible price tag—is that there’s still money set aside in the CARES Act that hasn’t been spent. Much of the $500 billion in broader economic relief routed through the Treasury, for example, hasn’t been tapped yet, and there remains several billion dollars in past funding for testing, a sum the White House believes is sufficient.
There’s also bipartisan concern that lawmakers are just beginning to get a sense of how the nearly $3 trillion in prior COVID-19 relief funds was spent, and the mechanisms put in place to provide oversight have been marginalized and overwhelmed from the beginning.
But the sheer scope of the economic pain is driving Congress toward some kind of action. Thursday’s government jobs report showed 1 million new unemployment claims for the 18th week in a row. Some 25 million people are poised to lose new, expanded unemployment benefits if Congress does nothing.
Public sentiment remains strongly behind additional government action to confront the coronavirus crisis: a Pew Research poll in June found that over 70 percent of Americans felt an additional stimulus bill was needed. But, illustrating some of the dynamics playing out within the Senate GOP, Republicans polled were evenly split on whether additional stimulus is needed.
Various Republicans working to re-elect the president are more ambivalent about this ideological debate playing out within Trumpworld this week, though. “Whether there is another major stimulus or more unemployment [benefits] or not, another big stimulus is not going to save [Trump’s] ass,” said one GOP operative close to the White House. “If he wins re-election, it will be because of something else and some other way the president starts taking apart Biden’s lead.”
In the months since the virus started ravaging the country, Trump has—typically—hinted at different policy preferences to different officials and allies, depending on his audience. According to three sources with direct knowledge of these conversations, the president has often expressed sympathy for the positions of his more fiscally conservative advisers when speaking to them behind closed doors. But then days later, when privately discussing the path forward with aides and lawmakers who favor bolder stimulus, Trump has repeatedly complained that he wants to do a bigger stimulus package—but he can’t because he’s too constrained by many of his economically conservative pals on Capitol Hill.
“I have had several conversations with President Trump since the beginning of the coronavirus crisis regarding the U.S. economy,” said Eric Bolling, a Sinclair host and friend of the Trump family. “Trump was, from the beginning, unequivocal in his belief his policy actions, [particularly] stimulus, PPP, tax cuts/delays, etc., would result in a ‘V-shaped’ recovery. It became obvious quickly, as early as April, that several waves of stimulus would be needed and that President Trump [wanted] to deliver them.”
With deadlines to extend unemployment insurance and other lifelines less than two weeks away, Trump’s key lieutenants—White House Chief of Staff Mark Meadows and Treasury Secretary Steven Mnuchin—spent the last week talking with Senate Republicans to get a draft bill that would serve as their opening bid. But they couldn’t get one together, and senators left town for the weekend on Thursday as Senate Majority Leader Mitch McConnell (R-KY) declared there was an agreement in principle among themselves.
Such an agreement would be just the first step of what is poised to be an extended and contentious period of negotiation with Democrats, who are eager to hammer out a bill that they would very much want to look like the $3 trillion Heroes Act that passed the Democratic-controlled House last month. Some rank-and-file Republicans are concerned those talks could produce a problematic bill that they would be forced to swallow by the time it’s done—something many of them have felt about past COVID-19 bills.
“It’s probably better not to get anything at all than to get something bad,” said Sen. Josh Hawley (R-MO). “What’s the public going to do? They’re gonna look at this like, no, wait a minute—does this help me get back to work? Does this help my kids get back to school? Does this give me some security, or is this just like more funding for this, that, and the other special interest?”
The feeling among Republicans that too much has already been spent, or misspent, on COVID-19 relief is coloring how they approach a package that comes in a pivotal moment of Trump’s term and his effort to secure another one. It’s enough to give even optimistic Trump allies some pause about what comes next.
“The President has always said that the cure can’t be worse than the disease. I think there’s some that could argue we’ve created a cure that’s worse than the disease,” said Sen. Kevin Cramer (R-ND).
“When it comes to the election for president it’s a binary choice. There’s plenty for him to negotiate, and there is an expectation we’re going to do something that’s good, and at the very least, something that fights the virus itself, that helps kids get back to school safely, and hopefully more help, targeted help, for the economy, specifically for job creation,” continued Cramer. “I have a hard time believing we’re not going to get to something, but today we’re further apart than I thought we would be.”
