- Markets await today’s Biden pandemic aid proposal
- Senate trial date for Trump is uncertainÂ
- Further evidence expected of stalling labor market
- Fed Chair Powell speaks today and could weigh in on QE tapering debate
Markets await today’s Biden pandemic aid proposal — The markets have returned to their stimulus-watch as President-Elect Biden today is expected to announce his proposal for a new pandemic aid bill. Mr. Biden last week said his stimulus proposal would involve “trillions” of dollars. However, he is now reportedly planning to tone down his plan in an attempt to get some Republicans on board for a broader package, passed through the regular legislative process.
Senate Democrats could use the budget reconciliation process to jam a bill through the Senate with only a majority vote. However, the budget reconciliation process cannot include all the aid items that Democrats want to include, such as aid to state and local governments.
The Washington Post reports that Mr. Biden will lay out a two-track plan with the first effort focused on a bipartisan pandemic aid program totaling more than $1 trillion. Mr. Biden will later push for a second stimulus package that includes infrastructure spending and other priorities.
Democratic Senate Leader Schumer is pushing Mr. Biden for a $1.3 trillion pandemic aid package that includes many of the items that were in the Democrat’s original $2.2 trillion proposal but didn’t get into the final bipartisan $900 billion aid bill, according to reporting by Bloomberg. Democrats want to boost stimulus checks to $2,000, extend unemployment aid beyond the current expiration date of March, and get at least $160 billion in aid to state and local governments, among many other items.
The question will be whether Leader Schumer can get enough Republicans to sign onto that package to reach a two-thirds cloture vote. If not, Senate Democrats will be forced to pass a narrower package with the budget reconciliation process.
Senate trial date for Trump is uncertain — The House on Wednesday impeached President Trump again, this time with support from ten Republicans. However, there appears to be no chance that Mr. Trump will be convicted in the Senate and removed from office before his term is over next Wednesday at noon.
Senate Majority Leader McConnell yesterday refused to bring the Senate back from recess to hold a trial. That means that the Senate will not begin a trial before next Wednesday, even if the House goes ahead with an immediate referral of the impeachment to the Senate. Speaker Pelosi has not said when she will send the referral to the Senate, but House Majority Leader Steny Hoyer on Wednesday said he expects the House to send the impeachment referral to the Senate as soon as it is ready.
The Senate is obligated by the Constitution to hold a trial promptly once an impeachment referral has been sent to the Senate. However, there are some legal scholars who believe that a former president cannot be put on trial by the Senate after leaving office because the Constitution implies that only incumbent presidents can be impeached and removed from office.
The counter-argument is that a trial after a president leaves office would be necessary if the alleged offense occurred close to the end of a term and Congress wanted to impose the punishment of disqualifying a former president from ever holding federal office again. The Supreme Court might first have to resolve the issue about whether a Senate trial for Mr. Trump would even be allowable under the Constitution. Mr. Trump’s impeachment lawyers will undoubtedly raise that issue as a defense.
Senate Democrats next week mainly want to get President-Elect Biden’s cabinet members approved very quickly so the administration is ready to deal with any new domestic or foreign crises. Also, Mr. Biden wants to get another pandemic aid bill approved as quickly as possible.
In order to address those priorities, Senate Democrats may ask the House to delay the referral of the impeachment. Alternatively, the Senate might be able to dispatch the trial in a short period of time, considering that the impeachment took only a day in the House and involves a narrow set of facts.
Further evidence expected of stalling labor market — Today’s U.S. unemployment claims report is expected to show further evidence of the stalling labor market. Today’s initial unemployment claims report is expected to show a +2,000 increase following last week’s small decline of -3,000. Initial unemployment claims are still 570,000 above February’s pre-pandemic level, illustrating that there are still many people who are still being laid off due to pandemic-related business disruptions. Last Friday’s Dec payroll report showed a disappointing -140,000 job loss.
Meanwhile, today’s continuing claims report is expected to show a decline of -72,000 to 5.000 million, adding to last week’s -126,000 decline to 5.072 million. Continuing claims are still 3.4 million above February’s pre-pandemic level, illustrating that there are still many people who have yet to find new jobs in the pandemic-impaired economy.
Fed Chair Powell speaks today and could weigh in on QE tapering debate — Fed Chair Powell today will take part in a Princeton Webinar, and he might weigh in on the recent controversy about QE tapering. Several Fed officials in the past week have brought up the idea of QE tapering, which was a factor behind the surge in the 10-year T-note yield to Tuesday’s 10-month high of 1.19%. Since early Tuesday, however, other Fed officials have tried to cool things down, saying it is far too early to even talk about QE tapering given that the pandemic is raging at record levels.
