Congress eyes more spending amid virus recession

WASHINGTON — There is a growing recognition across party lines that Congress will need to spend more money, soon, to continue to prop up the U.S. economy during the coronavirus recession.

But there is little consensus on what that next aid package will look like and how quickly it will arrive before the end of summer, and there is a sense among Republicans and Democrats that the next bill will spend far less to help people and businesses than the nearly $3 trillion that Congress approved in March in a series of rapid-fire bills.

Some economists say lawmakers are risking further damage to an already fragile recovery by not moving more quickly. The unemployment rate has dropped from its April peak but was still at 11.1 percent in June. Forecasters at the Congressional Budget Office said Thursday that they expect the economy to shrink by 5.9 percent this year, a contraction that would be more than twice as large as the one the United States experienced during the Great Recession in 2009.

Federal Reserve officials are worried that a possible “second wave” of the pandemic would further depress economic growth in a way that would be “more severe and protracted” than the current forecast, according to minutes from their most recent meeting.

Senators were expected to leave Washington on Thursday after making only incremental progress toward an agreement to extend further relief to businesses and laid-off workers who are about to lose or have already exhausted federal assistance.

Congress this week unanimously agreed to extend an aid program for small businesses through August, a move that small business groups called a good but insufficient step to help prevent bankruptcies. But the Senate’s Republican majority rejected a Democratic attempt to extend supplemental benefits for the unemployed until the economy has more fully recovered.