A chief economist says Mitch McConnell expects Trump to lose the election — and breaks down why that means there will be no stimulus money until February

Mitch McConnell
Senate Majority leader, Mitch McConnell.
  • Mitch McConnell will not risk his Senate leadership by forcing fellow Republicans to back a big stimulus bill, as he expects Donald Trump to lose in November, Pantheon Macroeconomics chief economist Ian Shepherdson said on Thursday.
  • "McConnell expects Trump to lose, and therefore for him to spend political capital to support Trump by forcing through a bill which would put his own leadership position at risk after the election, to me, doesn't make any sense," Shepherdson said at a webinar.
  • The Senate Majority leader will not persuade his own party to vote for a big relief spending bill because "splitting the party is death to the leader," Shepherdson said.
  • The economist expects a multi-trillion dollar bill to pass by the end of January, after the inauguration, which means there won't be any money flowing into the economy until February.
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Senate Majority Leader Mitch McConnell won't risk his position by forcing through a stimulus bill now, because he expects Donald Trump to lose next month's presidential election, Ian Shepherdson, chief economist at Pantheon Macroeconomics, said in a webinar this week.

"I think McConnell expects Trump to lose, and therefore for him to spend political capital to support Trump by forcing through a bill which would put his own leadership position at risk after the election, to me, doesn't make any sense," Shepherdson said on Thursday.

"It's always wise to do things from McConnell's personal perspective, because that's how things operate in the Senate. He has enormous personal power, and he wants to be leader again — even if he has to be a leader in the minority," he said, referring to the potential for the Democrats to win a majority in the Senate next month.

House Democrats have put forward a $2.2 trillion stimulus plan, but McConnell has described it as "outlandish" and said this amount was too high.

On Thursday, he signalled his limits stand at $500 billion. "My members think what we laid out, a half a trillion dollars, highly targeted, is the best way to go. So that's what I'm gonna put on the floor," he said.

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In order for the House to pass a big relief bill, Shepherdson said, McConnell would end up dividing his own party, since about 15-20 Republicans are against a deal at, or above, $1.5 trillion.

But he will not push his fellow Republicans to agree, because "splitting the party is death to the leader," Shepherdson said.

He cited examples of John Boehner and Paul Ryan, who also faced contentious splits within the GOP.

"There will be no bill of any size, until after the inauguration. Here we are in mid-October, looking at money not flowing until mid-February. That means a real void for the economy, it means potentially some very nasty growth numbers."

Market volatility around the rising, or falling, chances of a new stimulus bill have been "an accident waiting to happen," Shepherdson said.

He expects a mult-trillion dollar bill to pass by the end of January, after the inauguration of the next president.

"The bill that I think will pass in February will be enormous. It will be $2 trillion plus, it might even be the $3.3 trillion that the Democratic majority passed in May which was then ignored by the Senate," he said.

He does not expect the two chambers of Congress to work together before then. "That means leaving something positive for Biden to start with, and that's not the mindset of Republicans in the Senate," Shepherdson said.

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