The gap between the Republican and Democrat stimulus plans has not closed during the House recess. The two parties’ proposed packages are trillions apart, and hope for a settlement remains low.
Republicans forced a vote last week in the Senate on a $650 billion package. Senate Majority Leader Mitch McConnell put forward the measure. Democrats ultimately blocked the bill.
Democrats, for their part, are demanding at least $2.2 trillion in a bill created by Speaker Nancy Pelosi. The bill includes an additional $1 trillion in funding for cities impacted by the COVID-19 crisis.
For his part, Treasury Secretary Steven Mnuchin has requested that a bill be passed. In the meantime, however, he has come to an agreement with Pelosi for a continuing resolution, or CR, that will keep the government open after October 1.
The potential for a future stimulus bill remains bleak, however, and Mnuchin’s comments at the September 1 House hearing have not changed. There he said that targeted aid in certain sectors was urgent for economic stability.
The Secretary has also made clear that the stimulus is likely the cause of the economic rebound that has occurred in recent months. He famously said that markets were ‘addicted’ to the stimulus at this point.
Stimulus, the Dollar, and Bitcoin
The main concern for Republicans is that additional stimulus spending will only increase the already burgeoning Federal deficit. Growing debt and increasing liquidity have led to concerns that the dollar would likely lose its status as the international currency of choice.
Recent trading has seen the dollar recover ground, but Monday’s news of a stalemate in Congress sent the currency down. In response, gold rose more than 1%, and bitcoin saw a substantial jump to over $10,600.