Lack of COVID stimulus money threatens to spark double recession: economist

VALLEJO, Calif. - Congressional Democrats and Republicans remain miles apart on how much to put into a new stimulus bill and what it will pay for. It's a moving target that could change at any time.

But, what happens will be decided back east, not in the nation's capitol, but 900 miles south. 

The best chance for any kind of another COVID-era stimulus, if any, will be found in what is currently a $1.4 trillion omnibus or "catch-all" federal bill. That bill contains a basket of funding requests, some for COVID issues, but also from the Defense Department and others, as well as a roster of judicial appointments.

But, to get any of that done, Congress must also pass a bill to keep the government funded past December 11.

"The Democrats and Republicans are on polar opposites of the spectrum on how to handle issues and what to do about them," said Vacaville resident Irene Anderson.

Though Democrats and Republicans say they want a stimulus bill, that have yet to make a deal. That leaves local governments, as well as businesses and people essentially abandoned.

On December 26, 14 million people will lose unemployment benefits as two federal pandemic relief programs expire. On top of that, protections for homeowners, renters, and student loan borrowers will also expire, figuratively and literally leaving them very much out in the cold.

"It's a serious threat of a double recession," said former Golden Gate University Business School dean and former Wall Street lawyer, Terry Connelly, who knows the legislation and the forces behind them.

"That's where the politics come in [and] enters in between the Democrats and Republicans of which side thinks it's in their interests politically to do something about this now," said Connelly.

So, what may or may not get into a stimulus package, the real political interest are the perceptions of Georgia's voters where two Senate seats will be decided on January 5, more than a month from now.

"How does each side see that playing in the Georgia election?" asked Connelly.

Could a stimulus bill still be a month away or never happen?

"Absolutely. It's always been possible because these guys play hardball," said Connelly.

"It's too bad because by the time they do get it passed, assuming they get it passed this year, you know it will be too late for a lot of businesses," said John Silva owner of the Rockville Bike Shop in Solano County.

Vallejo's mayor laments and sees what goes on in his town. "I know some folks personally, that if it weren't for the faith community that they belong to, they would out of a place to live. They would not be eating," said Mayor Bob Sampayan.

A group of 10 Democrat and Republican Senators are holding meetings to come up with a solution to extend the benefits attached to a must pass bill such as keeping the government open.

But, if Republican Senate Majority Leader Mitch McConnell says no, that slim ray of hope will also go dark.