If the reader thinks that meant they offered to cut spending amounts or slow the rate of spending over the duration of the spending deal by a third of their $3 trillion bill, the reader would be mistaken.
As Roll Call reported, the only cuts the Democrats were offering was for how long the programs would last, “by moving up expiration dates of relief programs, not cutting the amount of aid they want to provide.” Buy two thirds now, get the other third later.
It's no surprise, then, that White House Chief of Staff Mark Meadows “dismissed that as a budget gimmick.” Further, Roll Call noted, “It’s unclear even if Republicans had agreed to Democrats’ offer to cut the cost of the package by about $1 trillion if they could do that just by moving around expiration dates.”
The funding sticking points were “on state and local and unemployment.” Democrats are demanding “giving state and local governments $915 billion” and “extending enhanced unemployment benefits at $600 per week.”
Unemployment of an additional $600 per week, on top of existing state unemployment funding, is more than most Americans make while working. Of those who have returned to work, Minority Whip Senator Durbin of Illinois acknowledged, “Seventy percent of them were making more money on unemployment than they made returning to work.” After the additional $600 per week expired at the end of July, insured unemployment dropped by 844,000.
Senator Lankford of Oklahoma made comments on the Senate floor this week about the negotiations, and how the U.S. can refine its continued response to COVID-19. Among several issues, he addressed state funding:
During the CARES Act that passed in March, this body gave the States $150 billion. There was also an allocation for healthcare of $260 billion. There was an allocation for education of $30 billion.
Why do I bring that up? The three most expensive aspects in any State budget are education, public safety, and healthcare. Those are the three most expensive portions from any State budget.
This body allocated $260 billion toward healthcare, $30 billion toward education, $150 billion toward public safety and COVID expenses.
Just to put that in perspective, the total budget for every State in America is $900 billion. Every State's total budget combined spending that they do in a year—$900 billion.
My Democratic colleagues want us to give almost $1 trillion to the States for COVID expenses.
The total budget for every State in the entire country for the entire year is just over $900 billion, and they are going to give $1 trillion to them on top of it.
That is more than replacing every State budget in America.
Now that negotiations are at a standstill, both sides are making calculations as to how things will proceed from here, without additional state funding and lapsed supplemental unemployment funding.
Democrats are assuming things will get worse and the pressure on Congress to spend more will increase.
Republicans are assuming things will get better as people return to work, and schools resume teaching in the fall (one way or another).
Either way, people will adjust as changes take effect.
If people didn't have savings, and continued not to save while making more on unemployment, they will feel the need to return to work. If they do, their unemployment status will lapse, as we've already begun to see with the 844,000.
As school resumes in the fall, more educators return to work. Roll Call noted “state and local government employment in July, with 274,000 jobs gained, mostly in education.”
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