Stimulus update: McConnell and Schumer discuss averting a shutdown and economic aid

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Staff for House Speaker Nancy Pelosi, Senate Minority Leader Chuck Schumer, Senate Majority Leader Mitch McConnell, and House Minority Leader Kevin McCarthy met on Thursday to discuss more COVID-19 relief and a spending bill to avert a federal government shutdown. The measures were discussed separately, a senior Democratic aide tells Fortune.

The most pressing matter is the government spending bill—something that is needed by December 11 in order to avert a federal government shutdown. But Capitol Hill is also under increased pressure to pass more stimulus, especially as COVID-19 cases soar and Pandemic Unemployment Assistance benefits expire at the end of the year.

“There’s been a little bit of a breakthrough in that McConnell’s folks are finally sitting down and talking to us,” Schumer told reporters on Thursday.

A senior Democratic aide tells Fortune the party hopes to continue these talks. On Friday, Treasury Secretary Steven Mnuchin told CNBC that top Republican leadership will “come up with a plan to sit down with Pelosi and Schumer and try to get a targeted bill done for the people that really need it.”

But while the two sides reportedly discussed programs that were part of the initial package like enhanced unemployment and small business loans on Thursday, they did not talk about details for a massive stimulus package, Politico reported.

And just because they’re talking, doesn’t mean Congress is any closer to a deal. Indeed, following Schumer’s Thursday remarks both Democratic and Republican Congressional aides told NBC News that Schumer may have exaggerated the latest development in the talks.

The reason for pessimism? These talks will struggle to translate into a deal until control of Congress is figured out in January when a pair of Republican Georgia Senate seats hold runoffs. If Republicans hold one Georgia seat, they retain the chamber. But if Democrats take both, they’d have power of the 50–50 spilt chamber through the tie-breaking vote the Constitution grants the Vice President (Vice President-elect Kamala Harris).

Following the election, McConnell reaffirmed his support for a stimulus package under $1 trillion, adding that a “highly targeted” bill is more appropriate. And if Republicans retain control of the chamber, McConnell would have the power to pressure Democrats into lowering their asking price.

But if Democrats take the Senate, they’d have the power to use budget reconciliation to move forward with a potentially massive stimulus package like the revised $2.2 trillion HEROES Act that House Democrats have proposed—a package that Biden said this week he supports. Unlike Senate Republican’s $500 billion ‘skinny’ package, the HEROES Act would send Americans another $1,200 stimulus check.

More must-read finance coverage from Fortune:

  • Hyped for years, hydrogen is finally having its moment
  • The cashless economy: How fintech is approaching the future of finance
  • “Challenger banks” are on track for a record year even as business model remains uncertain
  • “We were making it up as we went.” Kohl’s CEO on weathering the COVID storm
  • What businesses slammed by the pandemic can learn from America’s champion car salesman

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