Analyst ed it’s good to have you on today, um. You know there’s, obviously not a lot of specifics in the proposal today, given that it’s sort of an overview of where republicans want to start what stood out to you, akiko um, what stood out is that the recognition that there’s needs to be more done, i think, Is a very big message to the market that this is going to get done? Uh. The real question is what size and how long it’s going to take my base case has been that it gets done by the end of the month. Uh republicans are, i think, going to start the opening bid at an additional one trillion dollars of fiscal relief for the economy, um and if kind of mcconnell is starting by saying these are givens uh. I think there has to be an assumption that the price tag goes up as negotiations play out to your point ed. The question is how big the republicans are willing to go and whether the democrats are willing to meet them at that. But the big question mark here right now seems to be about the stimulus checks, especially given that the extra unemployment benefits are running out at the end of the month.

There’S concerns about sort of this fiscal cliff that a lot of americans are likely to face at the end of the month, um there’s been some proposal about lowering the cap. If you will for those who actually receive those checks, how important is it you think when you look at the overall macro picture for republicans to to get that right? Well, i would look to the comments last week by uh former fed chair, janet yellen, who said it would be devastating uh if the six hundred dollars were to completely go away uh, and that kind of you hear economists saying that we need these individuals to be Spending to benefit the economy uh.

The simple fact of the matter is is that there are tens of millions of americans an unemployment rate that is arguably kind of when you add in the self employed who are getting some of the unemployment benefits that are not always calculated in the official results. You know where it looks like it’s closer to 20 percent uh. You have a lot of folks out of work without a single. You know we don’t have tens of millions of job openings right now, uh. So the way i think about this is that to continue the 600 a week is about 15 billion dollars a week, uh that would be about 350 billion dollars between now and the end of the year. If you were to reduce it that’s a way in which you can kind of have these negotiations and stick to the dollar amount, i do think that it’s going to be probably in that three to four hundred dollar a week um when all things are said and Done there will be kind of some extra, as we add on this fiscal stimulus check, so the consumer is still front and center in the negotiations in dc, but the total dollar amount is still up in the year.

What about what needs to be done in terms of support for small businesses? There’S been some discussion here about the extension of the ppp program, but we’ve already seen these small businesses who did receive those loans.

You know two and a half months later saying. Essentially it wasn’t enough and that, even as they were able to reopen their business because of the restrictions that were in place tied directly to concerns about the virus, they just weren’t able to get the business back up and running what needs to change or what needs To be tweaked about this program to be able to provide support for these businesses, akiko that’s a great question. So when we go back to the cares act in the creation of the ppp uh, it was about getting money to small businesses, so they can pay their employees uh. That was only support for eight weeks uh. We are three months since the passage of the cures act so that money, uh by definition, should have run out by now uh. What the conversation in dc right now is is there’s about 130 billion dollars left of funding that has been appropriated to cover that eight weeks, uh plus some additional kind of rent utility uh payments. Maybe add to that. I think it’s, probably in that two to two hundred fifty billion dollar range and make sure that the next round goes to the hardest hit. Businesses secretary mnuchin on friday highlighted that any additional relief should have a revenue test.

We want to see that the revenues of the businesses have come down that we help rather than supporting a business that is just humming along that is technically eligible.

If you have that revenue test, if you do that second round that’s the way of supporting small businesses as they get um, you know kind of reopening in transition between kind of the current economy and a post covet economy, one of the areas or points of contention. Um that are likely to merge is how much funding there should be set aside for cities and we’ve already seen. Cities across the country start to implement drastic cuts in place because of the significant losses in revenue. How big do you think that congress needs to go in order to provide provide meaningful support to these cities that are hurting akiko? I think there’s a bipartisan support at or around 500 billion dollars um. You look at different estimates and you would you could easily argue that a trillion dollars has been lost at the state and local level um. I do kind of always tell folks, when you’re looking at money to state and local governments recognize that money is somewhat fungible, and so you might not see as much of a direct payments to states that some of the state, leaders or kind of local leaders would Want, but when we look at funding for schools, additional health care funding additional, you know funding for testing all these different ways in which the federal government sends money to the state and local level.

When that gets added up, i think that’s going to give some relief to cities and states it’s not going to cover everything.

But what we see in dc is that at the beginning of this conversation, a lot of the impacted areas were disproportionately areas represented from democrats. So there was an opposition. There was almost a partisan feel to this uh. Now as we’ve seen kind of the virus spread throughout the country, it is impacting kind of democratic in republican areas almost equally, so my hope is. We can get that bipartisan compromise and get at least 500 billion dollars in this next aid package to state and local governments to help them out. You know question a lot of mayors are hoping for the same as well as we continue to watch the debate over the latest stimulus play out in washington, ed mills uh washington policy analyst for raymond james thanks.

https://www.youtube.com/watch?v=d9DDtEzDgcg