Pelosi cites Fed's Powell in latest push for coronavirus relief deal
Powell said the economy's recovery has moderated in recent month and will 'likely' need more fiscal support
House Speaker Nancy Pelosi cited Federal Reserve Chairman Jerome Powell on Tuesday in her latest push for a coronavirus relief deal, echoing the central bank chief's comments that more fiscal support is needed to sustain the economy's nascent recovery.
“Chairman Powell’s warning could not be more clear: robust action is immediately needed to avert economic catastrophe from the devastation of the coronavirus pandemic," Pelosi said shortly after the conclusion of Powell's remarks to a virtual gathering of the National Association for Business Economics.
During his speech, Powell said the economic rebound that began in May was buoyed in large part by the $2.2 trillion aid package that Congress passed at the end of March, which included sweetened unemployment benefits, a one-time stimulus check and targeted aid for small businesses.
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But the recovery has moderated in recent months, he said, and there is a risk the rapid initial gains may transition to a "longer-than-expected slog back to full recovery as some segments struggle with the pandemic's continued fallout."
As unemployment remains above pre-crisis levels -- the nation's jobless rate is at 7.9%, well above the half-century low it sat at before the pandemic began -- Powell said there is "likely" a need for further support.
“Even if policy actions ultimately prove to be greater than needed, they will not go to waste," Powell said. "The recovery will be stronger and move faster if monetary policy and fiscal policy continue to work side by side to provide support to the economy until it is clearly out of the woods."
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Powell's comments come amid a high-stakes impasse between the two parties over another coronavirus relief deal.
Pelosi and Treasury Secretary Steven Mnuchin spoke multiple times last week, including meeting in person Wednesday, and over the weekend but failed to reach an agreement on another round of fiscal stimulus for American workers and families still reeling from the coronavirus-induced crisis.
Although Democrats and Republicans broadly agree that another bill is necessary to aid the economy's recovery, they sharply disagree over the size and scope of it.
House Democrats passed a $2.2 trillion package last week that includes extended federal unemployment benefits at $600 a week, a fresh round of $1,200 stimulus checks and additional funding for state and local governments.
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But the White House and Republican leaders want to keep the price tag lower amid growing concerns among some lawmakers over the nation's ballooning deficit, which is projected to hit a record-shattering $3.3 trillion this year, according to the Congressional Budget Office.
Mnuchin countered Pelosi's proposal with a $1.6 trillion relief bill, including $400 in weekly jobless benefits. Pelosi rejected the offer as inadequate.
“More than 210,000 Americans have died, over 7.5 million have been infected and countless millions have lost jobs and financial security," she said in her Tuesday statement. "It is long overdue for Republicans to join us in passing a bill that meets the needs of the American people by protecting our heroes, crushing the virus and putting money in the pockets of workers.”