Striking a stimulus deal shouldn’t be that hard

Follow Us Get the newsletter Among the oddities of the current negotiations over the next big pandemic relief and economic stimulus bill is that there really don't appear to be any obvious obstacles to a deal — as long as both sides want one. Yes, their opening positions seemed far apart, with Republicans vowing not to spend more than $1 trillion while Democrats had passed a $3.4 trillion bill back in March — and have found new things they want to spend money on since then. But there's actually less disagreement on the broad categories of spending; most of the things that Democrats want to fund were either in the Republican plan at lower levels, or at least in one of the bills passed with support from both parties back in March. Differences in spending levels, even very large differences, are basically the easiest thing for politicians to cut deals on. The hardest compromises are when two sides want completely different policy directions. There's really nothing like that here. At best, there are asks from both sides (Donald Trump's tax deductions for entertainment; the Democrats' attempt to restore the deduction for state and local taxes) that I suspect will disappear rapidly once the real negotiations begin. Or, perhaps, they have already disappeared, since it does seem that the negotiators are cautiously optimistic for now. Which is not to say that a deal is certain. On the Democratic side, if they can't get a deal they believe will significantly help the nation and their constituencies, then there must be at least some temptation to walk away and hope that voters take it out on the incumbent party. From everything I've seen it appears that Democrats want a good deal over no deal, but it's still not clear where a mediocre deal falls for them. On the Republican side? It's a lot more complicated, because they are not nearly as united as the Democrats. Some appear to want a deal — most notably, all those senators with competitive elections coming up in three months. Some, perhaps a dozen to 20 in the Senate and at least a few dozen in the House, aren't even willing to support the $1 trillion Republican plan and will be happy to oppose the final deal. And then there are those Republicans who prefer a deal when it comes to policy, but are terrified of being on the wrong side of party politics. For them, the key is waiting on Trump, since siding with him is a potential defense against claims they are RINOs — except that they also know Trump is notoriously unreliable, and perfectly capable of condemning not only a deal he agrees to but those who supported it for forcing his hand. And then on top of that, the White House and the executive branch are typically full of factions and policy fiefdoms, with plenty of people willing to defend their turf with an ill-timed leak or, even worse, by convincing the president to support whatever they want. Whether the threat of the upcoming elections in the midst of economic collapse is sufficient to smooth over all those divisions is going to be unclear right up to the point where a deal actually passes. Still, most of the signs from the actual negotiating room have turned positive. And again: This should be the kind of deal that gets done, despite all the obvious traps that still need to be avoided.   1. Cristina Bodea and Christian Houle at the Monkey Cage on the pandemic and democracy. 2. Dan Drezner on Trump's foreign policy. 3. Maggie Koerth and Amelia Thomson-DeVeaux on crime statistics. 4. I think Ross Douthat is suffering from foolish optimism here (in the brief bit of the column that's not filled with bleak pessimism), but perhaps he's correct that some Republicans are looking for a new way forward. I think the pessimistic view is probably more accurate. 5. And my Bloomberg Opinion colleague Faye Flam on the dangers of in-person voting. Yup. Some Republicans have suddenly noticed that the mass shift to absentee voting this year will cause real problems (as opposed to the tiny threat of fraud that Donald Trump has been talking about), but that shift isn't part of some Democratic plot. It's the natural consequence of holding elections during a pandemic. The solution isn't to push people back to in-person voting; it's to throw money at the problem in order to make all of the options — early voting, mail-in ballots, curbside drop-off, and in-person election day voting — as safe and as smooth-running as possible.   Before it's here, it's on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can't find anywhere else. Learn more.   You received this message because you are subscribed to Bloomberg's Early Returns newsletter. Unsubscribe | Bloomberg.com | Contact Us Bloomberg L.P. 731 Lexington, New York, NY, 10022