President Trump signed a $2 trillion coronavirus relief bill into law on Friday — the largest such package in U.S. history. Now, officials are already looking ahead to the next phase of emergency measures — and the cost of those measures could again run into the trillions.
As The Wall Street Journal reported late Sunday:
“Legislators from both parties, administration officials, economists, think tanks and lobbyists are already roughing out the contours of yet another emergency-spending package—perhaps larger than the last—to try to keep the coronavirus crisis from turning into a 21st-century Great Depression. Many expect the debate to begin in earnest by late April.”
Pelosi prioritizing help for states: The legislation passed last week was mostly aimed at minimizing the wreckage from the forced economic shutdown that has choked off business revenue and worker wages. The next step reportedly could involve more economic stimulus while also extending the benefits in the latest legislation and addressing the gaps it left — most notably, more aid to state and local governments whose budgets are sure to face massive shortfalls due to lost tax revenues and emergency spending needs.
“We have to have more resources for state and local government,” House Speaker Nancy Pelosi said in an interview with The New York Times on Monday. Pelosi added that “this isn’t about how fast we can do it, it’s how fast we must do it.”
Partisan differences could quickly reemerge: There’s some disagreement on just how urgent additional action is, though — and some early signs that the unusual speed and cooperation Congress displayed in scrambling to pass the $2 trillion “Phase Three” package could be harder to come by for future legislative steps as ideological differences bubble up again.
“The left is going to want to do infrastructure, welfare payments and food stamps,” Stephen Moore, a fellow at the conservative Heritage Foundation and an outside economic adviser to the Trump administration and some congressional Republicans, told the Journal. “Our side will want to do tax cuts and deregulation.”
Some Republicans also want to tap the brakes before considering additional action, a hesitation fueled in some cases by concerns about a more permanent expansion of government. “I would hope anybody that’s talking about a phase four would pause right now,” House Minority Leader Kevin McCarthy, a California Republican, said Friday on Fox News. “Let’s make sure this is actually working in the process and be smart, get the data back of where—if—we do need more help.”
Travel restrictions and social distancing requirements could also complicate any future legislation.
The bottom line: The state budget crunch is going to be real, and you’ll likely hear more governors raise the issue as we approach July 1, when the fiscal year begins for most states. This could also be an opportunity for the Trump administration and Congress to resurrect the large infrastructure plan all sides seem to want, perhaps with some less pressure than in the past to figure out how to finance it all.