Happy Friday and welcome back to On The Money. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.
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THE BIG DEAL—Kudlow confident that Trump can ’round up’ Senate GOP behind coronavirus relief deal: President Trump’s top economic adviser on Friday expressed confidence that the White House could convince enough Senate Republicans to back a potential coronavirus relief deal with House Democrats despite their open objections to another $1 trillion-plus stimulus bill.
National Economic Council Director Larry Kudlow said Friday that he thinks Trump could get a sufficient number of GOP senators to support an agreement forged between Treasury Secretary Steven Mnuchin and Speaker Nancy Pelosi (D-Calif.) if they’re able to strike a deal before Election Day.
“The president wants a deal. Secretary Mnuchin is negotiating a deal. If Speaker Pelosi wanted a deal, I think we could round up enough Senate Republicans to get a deal,” Kudlow told Fox Business’s Stuart Varney in a Friday interview.
Kudlow’s optimistic prediction comes amid a dispute between Trump and Senate Majority Leader Mitch McConnell (R-Ky.) over whether the Senate will take up another massive economic rescue bill. I break it down here.
The state of play:
- McConnell on Thursday raised doubts about whether the Senate would hold a vote on a deal between $1.8 trillion and $2.2 trillion, the price tag range between the administration’s offer to Pelosi and her counteroffer to the White House.
- The leader said he would instead take up a smaller $500 billion measure next week that’s more closely aligned with the preferences of debt-wary GOP senators.
- But Trump, who said Thursday he’d be willing to go higher than $1.8 trillion, waived off McConnell’s reluctance during a NBC News town hall later that evening.
LEADING THE DAY
US deficit spikes to record $3.1 trillion in 2020 amid pandemic spending: The federal deficit surged to a record $3.1 trillion in fiscal 2020, according to Treasury Department figures released Friday.
- That figure is more than 2 1/2 times the previous record, which came in at $1.4 trillion in 2009 during the height of the Great Recession.
- The deficit was already on track to surpass $1 trillion for the first time in eight years before the COVID-19 pandemic hit, prompting a gargantuan fiscal response from Congress to prop up the economy.
Economists largely agree that deficit spending is crucial in times of crisis to stave off deeper and longer downturns, but say that debt must be tackled when the economy recovers.
“We should be borrowing now, but once the economy recovers, our debt cannot continue to grow faster than the economy forever,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a budget watchdog group.
The Hill’s Niv Elis breaks down the numbers here.
Top Democrat calls for tax credit expansions in next coronavirus relief package: House Ways and Means Committee Chairman Richard Neal (D-Mass.) on Friday said that expansions of the earned income tax credit (EITC) and child tax credit (CTC) — two tax credits aimed at helping low- and middle-income households — must be included in the next coronavirus relief package.
- Neal’s comments come amid discussions between House Speaker Nancy Pelosi (D-Calif.) and Treasury Secretary Steven Mnuchin on legislation.
- The White House did not include expansions of the credits in the proposal it offered last week, which Democrats have cited as a key flaw with the offer.
“The decision to exclude these provisions – including Democrats’ proposal to make some of the benefits available immediately – means that workers and families will miss out on thousands of dollars they need to get back on their feet in the coming months,” Neal said in a statement. “Along with an extension of emergency unemployment compensation into 2021, these anti-poverty tax measures must be in the next stimulus package.”
The Hill’s Naomi Jagoda tells us more about the conflict here.
GOOD TO KNOW
- Retail sales rose 1.9 percent in September, according to data the Census Bureau released Friday, beating expectations and rebounding after four consecutive months of slowing gains.
- Sixty-six percent of Americans don’t expect work to ever go back to its pre-pandemic normal, according to a new survey from Prudential Financial.
- The Washington Post: “Nearly three decades after George Floyd first left Cuney Homes, another generation tries to make it out of Houston’s oldest housing project.”
- ProPublica: “Trump’s trade representative joined the administration with one mission: Bring factory jobs back from overseas. The results so far? Endless trade wars, alienated allies, and a manufacturing recession.”
ODDS AND ENDS
- Robert Smith, the billionaire who went viral last year for paying off the debt of students at Morehouse College, admitted to an illegal scheme to conceal income and evade taxes by using offshore trusts and bank accounts for 15 years.
- Progressive Democrats on Friday called on Senate leadership to oppose the confirmation of any nominee to an executive branch position who is a lobbyist or former lobbyist for any corporate client or who is a C-suite officer for a private corporation.
Recap the week with On The Money:
- Monday: Trump faces unusual barrier to COVID-19 aid in GOP allies | Advocates plead for housing aid as eviction cliff looms
- Tuesday: Pelosi, citing ‘leverage’ over Trump, holds strong to $2.2T in COVID-19 aid | McConnell to force vote on ‘targeted’ relief bill next week | Trump again asks court to shield tax records
- Wednesday: Mnuchin says COVID-19 relief before election ‘would be difficult’ | Gender employment gap widens with start of virtual school year | Warren rips Disney over layoffs, executive pay
- Thursday: McConnell shoots down $1.8 trillion coronavirus deal, breaking with Trump | Pelosi cites progress on testing provisions | Jobless claims spike to 898K