Pelosi: “We Are Not Budging” On Size Of Stimulus Package

US House Speaker Nancy Pelosi (Photo by Lenin Nolly/NurPhoto via Getty Images)

NurPhoto via Getty Images

Speaker of the House Nancy Pelosi has a blunt message for her Republican colleagues on the next stimulus package: take it or leave it.

Here’s what you need to know.

Stimulus Package: $2.2 Trillion Or Nothing

Congress is at a “tragic impasse” for the next stimulus package, says Pelosi, a California Democrat. Pelosi told Republicans that there won’t be further discussions until Republicans agree to a $2.2 trillion stimulus package, which is nearly double the size of the original Republican stimulus proposal known as the Heals Act.

“We have said again and again that we are willing to come down [and] meet them in the middle,” Pelosi said to reporters, referring to Senate Republicans. “That would be $2.2 trillion. When they’re ready to do that, we’ll be ready to discuss and negotiate. I did not get that impression on that call.”

Pelosi: We are not budging

Pelosi is referring to a 25-minute call that she had with White House Chief of Staff Mark Meadows on Thursday. The phone call was the first discussion on the stimulus package between Democrats and Republicans since August 7, when many expected Congress to pass the next stimulus package. The issue is clear: Republicans aren’t interested in doubling the size of the next stimulus package. Republicans proposed the Heals Act, a $1 trillion stimulus package, as the next stimulus package. In contrast, Democrats proposed the Heroes Act, a $3 trillion stimulus bill. While Pelosi wants to meet in the middle, Republicans say they’re concerned about total stimulus spending, which has already exceeded several trillion dollars.

MORE FROMFORBES ADVISOR

How Much Will The Next Stimulus Check Be?

Kelly Anne Smith

Forbes Staff

Second Stimulus Check Calculator: GOP HEALS Act Proposal

Kelly Anne Smith

Forbes Staff

“That could be a very short conversation if they’re not willing to meet in the middle. We’re not budging. They have to move.”

Stimulus Package: 3 Potential Scenarios

Will Senate Republicans meet Pelosi’s ultimatum? Both Meadows and Treasury Secretary Steven Mnuchin have said that Republicans won’t agree to a $2 trillion price tag for the next stimulus. Given this impasse, where do we go from here?

Here are 3 potential scenarios for what could happen next.

1. There is no stimulus deal

It’s possible there simply won’t be another stimulus package. This sounds almost unbelievable, given that Senate Majority Leader Mitch McConnell (R-KY) said last month that a stimulus deal could be finalized in several weeks. Both parties wanted a stimulus deal, even if they hadn’t agreed on funding amounts and policy priorities. With 35 senators and all members of the House of Representatives up for re-election this November, it’s always helpful for elected officials to return to their districts and show concrete financial relief to their constituents. Without a stimulus package, there may not be a second stimulus check or more funding for federal unemployment benefits, school opening, payment protection plan small business loans and Coronavirus testing, for example. For a large, comprehensive stimulus package, McConnell needs bipartisan support. However, if both parties cannot agree on total spending, there won’t be a big stimulus bill.

2. Republicans pass their own stimulus bill

Republicans could pass their own stimulus bill in the Senate—without Democrats. This didn’t seem possible last month because some fiscally conservative Republicans opposed another $1 trillion in federal spending. Sen. Lindsay Graham (R-SC) said then on Fox News that “half of the Republicans are going to vote 'no' on any more aid. That’s just a fact.” Conservatives are focused on limiting federal spending, and note that Congress has approved trillions of dollars in spending for previous stimuli in response to the Covid-19 pandemic. Some conservatives also say that spending more money is not how problems should be addressed.

That said, it’s possible that Senate Republicans pass a smaller stimulus bill, which could appease conservative Republicans. If McConnell can find enough Republican support, he could pass a smaller stimulus bill with more limited bipartisan support. Senate Republicans are working on a $500 billion new stimulus bill that could include funding for:

$300 of weekly unemployment benefits
school funding
small business loans
Coronavirus testing and vaccines
liability protection
$10 billion in funding for the U.S. Post Office

However, the new stimulus bill would not include any second stimulus checks. Similarly, don’t expect any proposals to cancel student loans.

3. Republicans agree to a $2 trillion stimulus deal

Finally, Republicans could agree to $2 trillion stimulus package to appease Pelosi and Senate Minority Leader Chuck Schumer (D-NY). While not impossible, this is highly unlikely. Senate Republicans would be open to a $1 trillion stimulus package, if Democrats agree. So, either Democrats agree to $1 trillion or Republicans agree to $2 trillion (or they compromise on another number). Otherwise, an impasse is likely to continue into September.

Next Steps: Where do we go from here?

Based on Pelosi’s comments, either Republicans have to agree to her proposal or they can pass their own legislation on the Senate floor. Currently, Congress is in recess, although members can return to Washington with 24 hours’ notice. The Senate is in recess until September 8 and the House of Representatives is in recess until September 14. Senate Republicans could introduce a new stimulus bill as early as this week. While it won’t include every Democratic priority, will it be enough to satisfy the American people and provide essential financial relief?