News & Politics

White House Economic Advisor Says Additional Stimulus May Not Be Necessary

FILE - In this Dec. 6, 2012, file photo, Kevin Hassett, senior fellow and director of Economic Policy at the American Enterprise Institute (AEI), gestures as he testifies on Capitol Hill in Washington before the Joint Economic Committee hearing entitled: "Fiscal Cliff: How to Protect the Middle Class, Sustain Long-Term Economic Growth, and Reduce the Federal Deficit." The analysis by Hassett, President Donald Trump’s chief economist, estimated Monday, Oct. 16, 2017, that the administration's plan to cut corporate tax rates will cause average household incomes to jump $4,000 a year - a stunning 5 percent increase that could be met with skepticism among tax experts and Democratic lawmakers. (AP Photo/ Evan Vucci, File)

Former White House economic advisor Kevin Hassett said on Fox News that with states reopening their economies, another stimulus bill from Congress may not be necessary.

“I think right now because there’s been good news really, that the opening up is starting to happen faster than we expected, appears to be doing so safely, then there is a chance that we won’t really need a phase four,” said Hassett.

As of now, congressional Democrats are hard at work to create another coronavirus relief bill, this time for the states and local governments whose budgets have been slammed by the shutdown, Senate Majority Leader Mitch McConnell wants to slow the gravy train down and wait to see what impact the previous three stimulus bills have on the people and their economy.

Donald Trump agrees with him.

CNN:

Speaking to reporters after his interview on Fox News, Hassett said that a potential phase four deal might be geared toward “growth and taking off and recovering, rather than just building a bridge to recovery.”

President Donald Trump said earlier in the week that he would consider funding for states in a potential “phase four” stimulus package, but that “we want to take a little bit of a pause” before passing such a package.

He argued that Republicans are in a much better negotiating position on funding for states, and if they agree to it, Republicans “have to get something for it.”

But this sort of logic and common sense is lost on Democrats who are fearful that the end of the crisis means that the House and Senate can’t be panicked into passing legislation unrelated to virus relief.

And now the shoe is on the other foot and Republicans want to use any funding bill for states to pass immigration measures, including the elimination of sanctuary cities.

But Hassett is thinking longer-term.

On prospects of the US economy reopening, Hassett predicted that “almost every state will be mostly open economically” likely by the end of May.

He said that economic numbers over the next few months will be “as bad as you’ve ever seen” and repeated some of his dire predictions about the economic impact of Covid-19 that he has made in the past week.

Hassett said that unemployment might reach 19% and GDP loss for the second quarter could be as high as 40%.

Those gloomy numbers could mean that another taxpayer stimulus bill would be considered necessary by both parties.

One unknown factor is how committed governors are to reopening their economies if there is going to be a spike in positive tests and an increase in deaths. Everyone in the media, as well as Democrats, is going to be telling them they jumped the gun and opened their states too soon. There will be a lot of political pressure to shut down again.

But waiting until there are zero infections and deaths is ludicrous. Anything short of that will bring a political attack on Republicans “not caring” about people’s lives, so GOP governors may as well open now. They have little to lose.

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