Stimulus update: Why the White House’s $916 billion proposal won’t fly

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For months, members of both parties have pushed for the next stimulus package to include enhanced jobless benefits for the more than 19 million Americans still on state unemployment rolls.

That explains why some Democratic leaders were frustrated Tuesday when Treasury Secretary Steve Mnuchin unveiled the White House’s $916 billion stimulus plan—which did not include weekly enhanced unemployment payments.

While the White House’s new $916 billion proposal includes $160 billion for state and local funding (a key Democrat ask), liability protection for businesses (a Republican wish), and even $600 per person stimulus checks, it notably doesn’t include any enhanced unemployment insurance and provides only $40 billion for extending Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Compensation (PEUC) that are set to expire this year. By contrast, the $908 billion bipartisan deal proposed last week would provide for $300 per week enhanced unemployment benefits.

Though the inclusion of stimulus checks has been gaining in popularity on both sides of the aisle, the White House bill as-is is a nonstarter.

House Speaker Nancy Pelosi quickly dismissed the White House deal, declaring “the President’s proposal starts by cutting the unemployment insurance proposal being discussed by bipartisan Members of the House and Senate from $180 billion to $40 billion. That is unacceptable,” she said in a joint statement with Sen. Chuck Schumer following the release of the White House’s proposal. They added the deal “must not be allowed to obstruct” the current bipartisan talks, and that “cutting unemployment to the extent [Mnuchin] has is…not going to get much support among any Democrats,” Schumer told reporters Wednesday.

The Treasury Department did not respond to Fortune’s request for comment about the White House’s latest offer.

Indeed, while the inclusion of stimulus checks would be welcomed in many corners, when compared to funding for things like enhanced unemployment, such “blanketed” checks are less critical to the economy, some economists and analysts say.

“The first priority is, bottom line, those households who don’t have a job, don’t have any savings,” Mark Zandi, chief economist at Moody’s Analytics, recently told Fortune.

Meanwhile Michelle Meyer, head of U.S. economics at Bank of America, adds, “Unemployment insurance is critical, and not just the dollar amount but the various programs. At the end of the year, the pandemic unemployment programs are set to expire. Those are the ones that expand eligibility to self-employed and gig workers,” she recently told Fortune.

A spokesman for Mitch McConnell did not respond to Fortune‘s request for comment on whether the senator supports the White House deal.

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