After Senate lawmakers failed to pass a less ambitious economic stimulus package last week, Treasury Secretary Steven Mnuchin warned Monday that there are “clearly” areas of the economy that still need support, so the Fear of increasing the national debt should not prevent Congress from passing another bill similar to the Cares Act.
Speaking to CNBC, Mnuchin also pointed to hotels, small businesses and restaurants as the sectors likely to need the most help from the government.
Until now, the collapse of negotiations for a new economic stimulus bill has focused on its cost.
The Democrats, led by House Speaker Nancy Pelosi, had pushed for more extensive spending, while the White House and the Republican Party, wary of increasing the national debt and the Federal Reserve balance sheet, pushed for a more specific bill.
Mnuchin rejected that conservative position on Monday, saying “now is not the time to worry about reducing the deficit.”
According to the Congressional Budget Office, the federal deficit this year will amount to $ 3.3 trillion ($ 3.3 trillion) as a direct result of historic economic stimulus spending.
If so, financial analysts already acknowledge that, for the first time since World War II, the national debt would exceed the total size of the US economy in the next fiscal year.
According to reports from the Politico electronic media, the White House has already endorsed that $ 1.5 trillion ($ 1.5 trillion, in English) be allocated for a new economic package, a figure that is above the original proposal of $ 1 trillion.
The Democrats, for their part, have reduced their initial proposal figure from $ 3 trillion to $ 2.2 trillion.
If Congress passes legislation or if there is a new executive action to write checks with money from emergency programs for a pandemic, the Secretary of the Treasury anticipated that it would take about a week for the IRS to start sending payments.
But when would it happen?
When the House returns to session next week, it will have 12 business days before the congressional session is interrupted again, prior to the elections. The Senate, for its part, has 22 business days during the current session, before pausing for the elections.
Therefore, several experts predict that the new federal aid will not arrive until after the November elections, if it does arrive.
And while it is still uncertain how the negotiations will evolve, differences between the approved CARES Act and the most viable aid package at this time are beginning to emerge.
For example, the CARES Act approved the remittance of $ 500 for dependents under the age of 16, while the proposed HEALS law – backed by Republicans – would also offer $ 500 for dependents, regardless of their age.
However, the HEROES proposal – backed by Democrats – suggests a $ 1,200 remittance for up to three dependents. If a change is made from what was previously established by the CARES Act, the IRS would have to adjust its accounting system, which could delay some payments, if a new stimulus package is finalized.