Kevin Hassett, Donald Trump’s economic adviser, said yesterday in an interview with the Wall Street Journal that it is highly likely that there will be one more round of coronavirus economic stimulus, and that it will probably happen before Congress begins its August recess.
The interview comes after some Republican lawmakers looked to be cooling to the idea that any more stimulus was needed in light of last Friday's Nonfarm Payroll numbers, which unexpectedly came with a drop in unemployment (it was expected to rise 6% to 19%). Hassett expects another 3.5 to 4 million jobs to be added to the economy in June, however, still sees the need for more stimulus.
Hassett, who is chairman of the Council of Economic Advisers, told the Journal ‘There are a lot of things that really are necessary to make sure that once we open up that we actually lift off’ adding ‘The odds of a Phase Four deal is something we talked with the president about last week. We even had a small group meeting this morning to talk about it. The odds of a Phase Four deal are very, very high’. Mitch McConnell, Senate Majority Leader, who is on record saying he believes there is no hurry to pass any more stimulus legislation, does acknowledge that another round is likely, however vowed it would be the last.
Local governments and States have already said they need more help to plug the huge hole in revenue that the pandemic has caused. Scott Stringer, the New York City Comptroller, warned that the Big Apple was facing an additional USD3bn in cuts, while Lori Lightfoot, the Chicago Mayor, said the loss of revenue has blown a USD700mln hole in the city’s budget. However, these are small numbers compared to California, where Governor Gavin Newsom is trying to get his fellow Democrats to agree to a USD14bn cut in state spending.