Stimulus Gains Renewed Urgency Amid U.S. COVID Surge, Weak Jobs Data

Resolving the long-running debate about the next stimulus package is gaining renewed urgency among lawmakers from both parties as it takes place against a backdrop of the surging pandemic and alarming economic data.

Democrats and Republicans in Congress remain divided over the substance and scale of the next package though there have been moves towards a deal since the election. President-elect Joe Biden is confident an agreement can be reached before the year ends.

It has been more than eight months since President Donald Trump signed the $2.2 trillion CARES Act, which included emergency relief for businesses and checks for individuals. The expanded unemployment payment is also due to end by 2021.

Congress is considering a $900 billion stimulus proposal; less than the Democrats wanted and more than the Republicans pitched for but a compromise that would, if passed, finally funnel more money to those who have urgently needed it these past few months.

The plan is an initiative from a bipartisan group of lawmakers pushing to take action after the leaders of both parties failed to reach an agreement.

"The American people need immediate help now before Congress goes on recess for the holidays," Sen. Mark Warner, a Democrat from Virginia, tweeted Monday. "It would be stupidity on steroids to abandon the American people during this pandemic."

Now, COVID-19 is spiking. The number of new cases, hospitalizations, and deaths are all on the rise and reaching new highs. The Johns Hopkins University (JHU) tracker says the seven-day rolling average of newly confirmed hit its highest level to date on December 6, at 196,233.

As of the same day, 101,487 people were hospitalized with COVID-19, according to The COVID Tracking Project, also a record high.

Moreover, the Centers for Disease Control and Prevention (CDC), citing forecasts from 37 modeling groups, estimates there will be a total of 303,000 to 329,000 COVID-19 deaths reported in the U.S. by the end of December, up from the more than 282,000 to date.

Coinciding with a worsening pandemic is a faltering labor market. Jobs data from the federal government released last Friday was worse than analysts had hoped to see.

While the unemployment rate dropped by 0.2 percent in November to 6.7 percent, the Bureau of Labor Statistics noted that "the pace of improvement in the labor market has moderated in recent months."

Moreover, the headline unemployment number obscures a bleaker reality. The figure excludes those not in the labor force but who currently want a job, and their number is rising.

During the month, such people totaled 7.1 million, an increase of 448,000 on October and 2.2 million higher than in February.

"These individuals were not counted as unemployed because they were not actively looking for work during the last four weeks or were unavailable to take a job," the bureau said.

Rep. Pramila Jayapal, a Washington Democrat, tweeted on Saturday that as COVID-19 cases rise "the economy is failing to recover," highlighting the jobs data—but also the gulf in expectations of what should be in the package that exists between lawmakers.

"We must act now to help people withstand this crisis. It's time for a relief package that sends out stimulus checks, renews expanded unemployment, provides rental relief, and delivers grants to businesses," Jayapal said.

Texas Democrat Rep. Joaquin Castro wrote that the jobs data was "a reminder of the urgent need for Congress to pass COVID-19 relief—including assistance for small businesses, extending unemployment insurance, and direct stimulus checks."

Rep. French Hill, an Arkansas Republican, praised the bipartisan compromise relief bill—which does not include another round of stimulus checks—calling it "common sense."

Another Republican, Rep. Guy Reschenthaler from Pennsylvania, tweeted that "Congress is running out of time to pass stimulus."

"For once in her life, Nancy Pelosi needs to put political posturing aside & realize this isn't about politics, it's about supporting fellow Americans who are in need," he wrote. "Our country can't wait until 2021."

stimulus deal check congress covid jobs unemployment
The U.S. Capitol is shown on October 21, 2020 in Washington, DC. Congress is considering a compromise relief bill that does not include a second stimulus check. Stefani Reynolds/Getty Images