- Weekly unemployment claims have spiked to 853,000, their highest numbers since mid-September as job growth falters.
- Economists say that without another stimulus package, the U.S. economy will continue to slow.
- Despite earlier optimism that a $908 billion bipartisan proposal would pass, Congress has reached another impasse, with liability protections for business and funding to states and local governments being the two major sticking points.
- Democrats have accepted Republicans’ demands, agreeing to temporary liability projections. Republicans, meanwhile, have refused to support more funding for states, arguing the money amounts to “blue-state bailouts.”
- However, red states are expected to suffer even more from budget shortfalls plaguing most state and local governments, and unless more is done, there will be major long-term economic damage.
Unemployment Numbers Spike
The U.S. Department of Labor (DOL) reported Thursday that another 853,000 Americans filed new unemployment claims in the first week of December, an increase of 137,000 more claims than the week before and the largest spike since mid-September.
Another 428,000 people filed under the federal joblessness benefits program for freelancers and self-employed workers, a nearly 50% increase from the week before. The increase in claims comes as the U.S. is reporting a sharp decrease in job growth.
Last week, the DOL reported that only 245,000 new jobs were created in November, less than half of the 610,000 jobs that were added to the economy the month before.
As more states and cities continue to impose tightened restrictions on both consumers and businesses in an attempt to curb the staggering increases in COVID-19 cases, economists are worried that layoffs will surge again.
Many experts also say that the economic recovery will just continue to slow if the federal government does not provide more aid for Americans and businesses.
But despite earlier optimism over the $908 billion proposal introduced by a bipartisan group of senators last week, Congress has hit another impasse. While Democratic leadership agreed to compromise and back the framework, top Republicans have refused to do the same.
White House Proposal
In an apparent attempt to bring the two sides together, the White House put forward its own $916 billion proposal Tuesday.
Although the package, which was announced by Treasury Secretary Steven Mnuchin, sought to reach some middle ground on key issues, it also created another set of problems.
While Mnuchin’s plan included another round of one-time stimulus checks worth $600 per person, with another $600 per child, it also proposed huge cuts to unemployment benefits laid out in the bipartisan framework.
Under the initial package, Congress would approve $180 billion in new federal unemployment benefits, which would be enough to both extended existing programs set to expire in about two weeks and add a supplementary $300 a week for jobless Americans.
Despite costing more, the White House plan would slash that number to just $40 billion, and according to people familiar with the proposal, while it would extend the federal benefits, it would not give any federal additional aid to the millions of Americans who are struggling to make ends meet.
Democratic leaders immediately denounced the White House proposal. In a joint statement, House Nancy Pelosi (D-Ca.) and Senate Minority Leader Chuck Schumer (D-Ny.) called the proposed cuts to unemployment “unacceptable.”
On the other side, several key Republicans embraced the framework. House Minority Leader Kevin McCarthy (R-Ca.) said it was “a very good offer,” and even Senate Majority Leader Mitch McConnell, who has refused to reach any kind of compromise with the Democrats on the bipartisan bill, signaled openness to the idea.
However, McConnell also suggested dropping two specific provisions in the White House framework that have been arguably the biggest sticking points for the two parties: the liability protections that prevent businesses from coronavirus-related lawsuits if a customer or employee is infected on-site, and any sort of funding for state and local governments.
Republicans have repeatedly insisted that the next stimulus bill include this liability measure, and McConnells’ remarks represent the only concession he has made in months. The argument Republicans have made for the provision is that it is needed to protect small businesses from the wave of lawsuits related to the pandemic that McConnell has warned about.
Economic data shows that there have been relatively few lawsuits so far, and Democrats, have continuously rejected the idea, which Sen. Bernie Sanders (D-Vt.) called, “a get-out-of-jail-free card to companies that put the lives of their workers and customers at risk.”
Despite those objections, Democratic leadership still agreed to the more limited, temporary version of the liability protections for businesses put forward in the bipartisan proposal. In other words, the only “concession” McConnell has made is on a provision that Democrats have already agreed to compromise on. Meanwhile, he is still demanding that they let go of one of their biggest asks.
State and Local Funding
For months, Democrats have said that they will not move forward on a bill that does not include funding for state and local governments. Republicans have refused to budge on their objections, and branding the effort as a “blue-state bailout.”
But this issue is not something that just affects Democrats or Republicans: states all over the country are struggling with severe budget crises because of the pandemic.
In fact, according to a recent report from Moody’s Analytics, six of the seven states that are expected to suffer the biggest declines in revenue over the next two years are red states led by Republican governors and won by Trump in the election.
Governors and local leaders all across the country have repeatedly begged Congress to give them additional federal aid, and while Congress did give them some money under the CARES Act passed in March, states are still under enormous financial strain.
From the get-go, much of the coronavirus-related spending has fallen on state and local leaders, and the Trump administration has continued to put the bulk of the responsibility in the hands of governors without giving them the tools to do so.
Meanwhile, there has been an increased demand for unemployment benefits and other state-funded social safety-net programs that are either wholly or partially state-funded. However, according to economists, the biggest reason states are losing money is because the economic shutdowns have also significantly decreased tax revenues.
Sales tax revenue, which is the largest source of revenue for the majority of states, has tanked because businesses are shut down and consumers are staying home. Income tax revenue has also tanked as unemployment rates have risen and people collecting those benefits have stopped paying income taxes.
Local businesses, which are also major sources of tax revenue directly and through their employees, are being forced to either fire those employees or shut down entirely. Notably, all of the stimulus proposals would include another round of Paycheck Protection Program (PPP) loans for small businesses, but experts say it likely would not be enough.
Studies have shown that PPP loans have not been effective in helping these local businesses in the long run.
“P.P.P. never really served these kinds of businesses very well. More and more of them are boarding up and closing down, and it’s a real hit to the community, a real hit to the quality of life in these communities,” Laura Tyson, an economist at the University of California, Berkeley, told The New York Times.
Multiple reports have also found that the funds were largely allocated poorly and even improperly at times.
One recent study from The Counter, an independent, food-focused news organization, found that just 1% of PPP borrowers took in a quarter of the loan money, and many of those were large companies.
In fact, the organization also reported that large fast-food franchises alone took in more than $60 billion in PPP funding through a loophole that allowed large companies to be eligible for the loans as long they employed less than 500 people at one location.
“The Counter also found multiple instances where conglomerates appeared to bypass the $10 million cap on loans through the use of subsidiaries,” the study said.
However, these small local businesses that are being thrown under the bus for the Wendy’s and Taco Bell’s of the world are not only important facets of the local economies they serve, they are also essential to the future of the American economy as a whole,
As The Times reports, “If [local businesses] fail in large numbers, it will slow the economic recovery once the pandemic is over.”
Some states have taken action to help out these small businesses, but at large, they are very limited in what they can do. In addition to being generally cash-strapped, unlike the federal government, the vast majority of states cannot deficit spend if they run out of money.
Absent a federal stimulus, the only way for states to get more money would be to raise taxes or make massive budget cuts. Both options would put significant strain on the millions of struggling Americans and have a broader, negative multiplier effect on the already faltering American economy.
See what others are saying: (The New York Times) (The Washington Post) (Forbes)
Mississippi Asks Supreme Court To Overturn Roe v. Wade
The Supreme Court’s decision to consider Mississippi’s restrictive abortion ban already has sweeping implications for the precedents set under the landmark reproductive rights ruling, but now the state is asking the high court to go even further.
Mississippi’s Abortion Case
Mississippi filed a brief Thursday asking the U.S. Supreme Court to overturn Roe v. Wade when it hears the state’s 15-week abortion ban this fall.
After months of deliberation, the high court agreed in May to hear what will be the first abortion case the 6-to-3 conservative majority will decide.
Both a district judge and a panel of the U.S. Court of Appeals for the 5th Circuit had ruled that Mississippi could not enforce the 2018 law that banned nearly all abortions at 15 weeks with exceptions for only “severe fetal abnormality,” but not rape and incest.
If the Supreme Court upholds the Mississippi law, it would undo decades of precedent set under Roe in 1973 and upheld under Planned Parenthood v. Casey in 1992, where the court respectively ruled and reaffirmed that states could not ban abortion before the fetus is “viable” and can live outside the womb, which is generally around 24 to 28 weeks.
When the justices decided to hear the case, they said they would specifically examine the question of whether “all pre-viability prohibitions on elective abortions are unconstitutional.”
Depending on the scope of their decision on the Mississippi law, the court’s ruling could allow other states to pass much more restrictive abortion bans without the risk of lower courts striking down those laws.
As a result, legal experts have said the case will represent the most significant ruling on reproductive rights since Casey nearly three decades ago, and the Thursday brief raises the stakes even more.
When Mississippi asked the justices to take up its case last June, the state’s attorney general, Lynn Fitch (R), explicitly stated that the petition’s questions “do not require the Court to overturn Roe or Casey.”
But that was before the court’s conservatives solidified their supermajority with the appointment of Justice Amy Coney Barrett — who personally opposes abortion — following the death of liberal Justice Ruth Bader Ginsburg.
New Filing Takes Aim at Roe
With the new filing, it appears that Fitch views the high court’s altered makeup as an opportunity to undermine the constitutional framework that has been in place for the better part of the last century.
“The Constitution’s text says nothing about abortion,” Fitch wrote in the brief, arguing that American society has changed so much that the previous rulings need to be reheard.
“Today, adoption is accessible and on a wide scale women attain both professional success and a rich family life, contraceptives are more available and effective, and scientific advances show that an unborn child has taken on the human form and features months before viability,” she added, claiming the power should be left to state lawmakers.
“Roe and Casey shackle states to a view of the facts that is decades out of date,” she continued. “The national fever on abortion can break only when this Court returns abortion policy to the states.”
The Center for Reproductive Rights, which represents Mississippi’s sole abortion provider in the suit against the state’s law, painted Fitch’s effort as one that will have a chilling effect on abortion rights nationwide.
“Mississippi has stunningly asked the Supreme Court to overturn Roe and every other abortion rights decision in the last five decades,” Nancy Northup, the president and CEO of the group said in a statement Thursday. “Today’s brief reveals the extreme and regressive strategy, not just of this law, but of the avalanche of abortion bans and restrictions that are being passed across the country.”
The Supreme Court has not yet said exactly when during its fall term it will hear oral arguments on the Mississippi case, but a decision is expected to come down by next June or July, as is standard.
An anticipated ruling just months before the 2022 midterms will almost certainly position abortion as a top issue at the ballot box.
See what others are saying: (The New York Times) (The Washington Post) (Politico)
Republicans Boycott Jan. 6 Committee After Pelosi Rejects Two of McCarthy’s Picks
The House Minority Leader said that unless House Speaker Pelosi reinstated the two members, Republicans will launch their own investigation into the insurrection.
Pelosi Vetoes Republicans
Republicans are boycotting the select committee to investigate the insurrection after House Speaker Nancy Pelosi (D-Ca.) rejected two of the five GOP members Minority Leader Kevin McCarthy (R-Ca.) picked to serve on the panel Wednesday.
In a statement, Pelosi cited the “statements and actions” of Rep. Jim Jordan (R-Oh.) and Jim Banks (R-In.), whose nominations she said she was opposing “with respect for the integrity of the investigation.”
Jordan and Banks — both staunch allies of former President Donald Trump — have helped propagate the previous leader’s false election claims, opposed efforts to investigate the insurrection, and voted not to certify the election for President Joe Biden.
A senior Democratic aide also specifically told The Washington Post that Democrats did not want Jordan on the panel because he reportedly helped Trump strategized how to overturn the election and due to the fact he spoke to the then-president on Jan. 6, meaning there is a possibility he could be called to testify before the very same committee.
The aide also said that Democrats opposed Banks’ selection because of a statement he issued after McCarthy chose him.
In the statement, the representative compared the insurrection to the racial justice protests last summer, implied that the rioters were just normal American’s expressing their political views, and claimed the committee was a political ploy “to justify the Left’s authoritarian agenda.”
Notably, Pelosi did say she would accept McCarthy’s three other nominees — including Rep. Troy Nehls (R-Wi.), who also voted against certifying Biden’s win.
McCarthy Threatens Separate Investigation
McCarthy, however, refused to select new members, and instead opted to remove all his appointees from the would-be bipartisan committee.
In a statement condemning the move, the minority leader said that Pelosi’s action “represents an egregious abuse of power.”
“Denying the voices of members who have served in the military and law enforcement, as well as leaders of standing committees, has made it undeniable that this panel has lost all legitimacy and credibility and shows the Speaker is more interested in playing politics than seeking the truth,” he said.
“Unless Speaker Pelosi reverses course and seats all five Republican nominees, Republicans will not be party to their sham process and will instead pursue our own investigation of the facts.”
Pelosi defended her decision during a press conference Thursday, where she said that Banks and Jordan were “ridiculous” choices for the panel.
“When statements are ridiculous and fall into the realm of, ‘You must be kidding,’ there’s no way that they’re going to be on the committee,” she added.
See what others are saying: (The Washington Post) (The New York Times) (CNBC)
More Republican Are Pushing COVID Vaccinations, But the Party Remains Divided on Its Messaging
The renewed effort to encourage vaccination comes as the surge in COVID cases caused by the delta variant continues to disproportionately impact Republican-led states with low vaccination rates.
GOP Leaders Ramps Up Vaccination Push
In recent days, more Republican leaders and prominent conservatives have ramped up efforts to encourage members of their party to get vaccinated against COVID-19 as the U.S. continues to see massive surges from the delta variant.
Some, like Senate Minority Leader Mitch McConnell (Ky.), have been pushing Americans to get vaccinated for months — a call he reiterated again on Tuesday. Many others, however, have been reticent to do the same until recently.
Most notable on that list is Rep. Steve Scalise (La.), the no. 2 Republican in House leadership, who just got his first dose over the weekend after resisting vaccination, claiming he had antibodies from previously contracting COVID. Scalise explained he changed his mind because of delta and encouraged others to do the same.
“There shouldn’t be any hesitancy over whether or not it’s safe and effective,” he said.
The top leader is set to continue pushing that advice. Earlier this week, the GOP Doctors Caucus announced that it would hold a news conference Thursday alongside Scalise and the third-ranking House Republican, Rep. Elise Stefanik (N.Y.), to encourage vaccination.
Rank and File Republicans Continue To Cast Doubt, Spread Misinformation
There are still plenty of Republicans working to undermine the renewed push to get their party vaccinated.
While many have painted vaccination as a matter of freedom of choice, others have sought to downplay the virus. Florida Gov. Ron DeSantis, whose state currently accounts for 40% of all new COVID cases, dismissed the spikes as the result of a “seasonal virus” on Monday.
Rep. Barry Loudermilk — who has had COVID twice — echoed that in a statement to reporters on Tuesday, where he argued that COVID is just something everyone has to live with.
“This is something we deal with in our lives on a daily basis; ever since I’ve been born, there’s sicknesses, there’s flu, there’s different diseases,” he said.
Some members of the GOP have used their positions of power to actively fight against vaccination. That includes Sen. Ron Johnson (Wi.), who has openly said he is not vaccinated. He has also been widely condemned for promoting unproven treatments and false information about vaccines during interviews and congressional hearings.
Rep. Marjorie Taylor Greene (Ga.), who has repeatedly refused to share her vaccination status, has also drawn ire for sharing misinformation and continually comparing COVID prevention efforts to the Holocaust.
Greene was temporarily suspended from Twitter earlier this week for sharing false information on Monday, but she continued to utilize her spotlight to spread misinformation about vaccine-related deaths and side effects during a press conference the following day.
While those who downplay the coronavirus and spread false information about vaccinations are certainly not representative of the entire Republican Party, they are some of the most visible.
Greene and many of her counterparts who push anti-vaccine narratives have frequently been accused of acting in inflammatory ways to get more press — a strategy that more often than not tends to work in their favor.
As a result, Republicans who want to encourage people to get the jabs will have their work cut out for them. Even many of those who have not openly expressed skepticism themselves have still let it flourish in the party for so long by not publicly pushing back against claims from members who sow disinformation.
The GOP’s broader failure to unify around a singular message on vaccines shows clearly among the party’s base.
According to a recent Washington Post-ABC News, poll 86% of Democrats have received at least one shot, but just 45% of Republicans have done the same. While just 6% of Democrats say they are not likely to get the vaccine, 47% of Republicans said they probably will not, and 38% said they definitely will not.
Meanwhile, Republican-led states with low vaccination rates are suffering the most from the new spike in cases and the rapid spread of the delta variant.
Arkansas, which has one of the lowest vaccination rates in the country at just 35%, is currently reporting the highest per-capita cases in the U.S. Hospitalizations have gone up 85% in the state in the last two weeks, placing some hospital systems on the brink of collapse — a problem also faced by parts of Missouri, which has the third-highest COVID cases nationwide.