Congress is back in session with no clear path ahead for the next stimulus package

  • Congress is back in session but there's no clear path ahead on another economic relief package to shore up the economy two months out from the next presidential election.
  • Senate Republicans are aiming to introduce a new, slimmer relief plan that would revive federal unemployment benefits and include small business aid.
  • The stage is being set for a high-stakes clash as Democrats seek a broader stimulus plan with $2.2 trillion in additional spending.
  • Millions of Americans are still unemployed and many experts warn of a recovery that leaves lower-income people behind.
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Senators are returning to Capitol Hill on Tuesday after a three-week recess — and Republicans and Democrats remain far apart on coronavirus relief measures to include in the next stimulus package.

Senate Republicans are aiming to rally GOP support around a scaled-back economic package, which could be introduced as early as Tuesday. The price tag would be smaller than the $1 trillion plan they unveiled in late July, ranging from $500 billion to $700 billion, The New York Times reported.

The proposal would revive federal unemployment benefits at $300 per week on top of state unemployment insurance, parcel out $105 billion for education, and inject another round of small business aid among other provisions. 

"It does not contain every idea our party likes," Senate Majority Leader Mitch McConnell said in a statement. "I am confident Democrats will feel the same. Yet Republicans believe the many serious differences between our two parties should not stand in the way of agreeing where we can agree and making law that helps our nation."

Read more: MORGAN STANLEY: The government's recession response has the stock market heading for a massive upheaval. Here's your best strategy to capitalize on the shift.

The stage is being set for another high-stakes political clash only two months before the presidential election. Over 29 million Americans are still on unemployment benefits and experts say the economic recovery is increasingly leaving behind lower-income people that have disproportionately lost their jobs and income compared to wealthier ones.

Coronavirus relief negotiations between the White House and top congressional Democrats fell apart after two weeks of fruitless talks last month with fierce disagreements on the spending necessary to keep the economy afloat. Democrats say at least $2.2 trillion in additional spending is needed.

Democrats are seeking to restore the $600 federal supplement to state unemployment insurance. Meanwhile, Republicans are seeking to cut it at a lower amount. Democrats also seeking much heftier aid to states. They argue that nearly $1 trillion is needed, while the White House offered $150 billion in additional assistance.

Republicans never coalesced around their stimulus plan last month since many senators opposed implementing another package, citing the mounting national debt.

The timeline for the next relief bill is highly uncertain, given heightened partisanship as the election draws nearer. It's also unclear whether the GOP plan would draw at least 51 Republican votes, but Democrats are likely to block it.

Last week, McConnell said in Kentucky: "I don't know if there will be another package in the next few weeks or not … It's harder to do now because we've moved closer and closer to an election."

President Donald Trump hasn't taken a central role in the stimulus talks up to now. Instead, he's appeared to leave it up to Treasury Secretary Steven Mnuchin and White House chief of staff Mark Meadows to determine whether a deal can be struck with Democrats.

On Monday, Trump charged Democrats with not wanting to reach a deal out of political opportunism, Bloomberg reported.

"They think if the country does as badly as possible, even though a lot of people are being hurt, that's good for the Democrats," Trump said at a Monday press conference.

However, White House Chief of Staff Mark Meadows tried striking an optimistic tone on Tuesday, telling Fox Business he was hopeful a deal could be reached in the next two weeks. The GOP plan, however, has already triggered significant criticism from Democrats.

"Republicans may call their proposal 'skinny,' but it would be more appropriate to call it 'emaciated,'" Senate Minority Leader Chuck Schumer wrote to Democrats on Thursday. "Their proposal appears to be completely inadequate and, by every measure, fails to meet the needs of the American people."

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