The death of Supreme Court Justice Ruth Bader Ginsburg wasn’t just a political and judicial earthquake—it’s also shaping up to cause real economic consequences.
For months Democratic and Republican leaders have failed to come to terms on the next broad stimulus package. The two parties are still $900 billion apart: Democrats are pushing for a package worth $2.2 trillion, and the White House is at $1.3 trillion.
But with the Republican controlled Senate planning to vote on President Donald Trump’s soon-to-be-announced Supreme Court nominee—and Senate Democrats planning to aggressively fight it—the chances of agreement on a stimulus bill before the election are falling.
If Senate Republicans do put another Trump nominated Supreme Justice on the bench, Senate Minority Leader Chuck Schumer said Saturday that “nothing is off the table next year.” That suggestion comes as some Democrats call for adding Supreme Court seats in 2021, aka “packing the court.” Those calls—and the looming Supreme Court nomination from Trump—are hardly the ideal political environment to pass a 13-figure stimulus package.
Investors on Monday priced down odds of another stimulus package as a result of the Supreme Court fight, says Dan Ives, managing director of equity research at Wedbush Securities. The S&P 500 closed down -1.2% to 3,281 points.
And partisan fighting on Monday had already started to dial up. House Speaker Nancy Pelosi released a stopgap funding bill, which Republicans rejected after learning it did not include farm aid. If a stopgap funding bill isn’t passed by the end of September, the federal government will shut down. And passing a stopgap bill is the first step towards moving onto a much larger broad stimulus bill.
The waning odds of more stimulus is bad news for jobless Americans who are set to see their weekly $300 enhanced unemployment benefits phase out this month as the funds Trump set aside through memorandum are nearing depletion. That loss for out-of-work Americans could be a drag on consumer spending—which is all ready showing signs of slowing.
And failure to pass another stimulus package means Americans wouldn’t see another $1,200 stimulus check this year, nor would there be additional aid for small businesses and state governments. Republican leaders have suggesting trying to pass another PPP as a standalone bill while Democratic leaders believe aid to states is vital to stave off mass public sector layoffs.
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