A surprise gain in jobs reported on Friday is likely to slow momentum for another round of major fiscal relief from Congress.
Stephen Moore, an outside adviser to President Trump and a contributor to the Washington Examiner, said that Friday’s jobs report should lead Congress not to pursue further relief.
“After the jobs report this morning, I think the White House and Congress are going to really reconsider the need for any kind of spending and probably kills the idea of the ‘blue state bailout,'” Moore told the Washington Examiner.
Chuck Grassley, the Republican chairman of the Senate Finance Committee, downplayed the urgency of enacting the kind of massive stimulus measure sought by congressional Democrats.
“The jobs report underscores why Congress should take a thoughtful approach and not rush to pass expensive legislation paid for with more debt before gaining a better understanding of the economic condition of the country,” said Michael Zona, a spokesman for the Iowa senator.
The Labor Department reported on Friday that the economy gained 2.5 million jobs in May, lowering the unemployment rate to 13.3%. Forecasters expected job losses of 8 million and an unemployment rate of about 20%.
Conservatives cited the job gains as a reason for caution about further relief.
“Congress should slow down, learn from past stimulus failures, and fix policy mistakes that discourage work and economic recovery,” said Rachel Greszler, a research fellow in economics at the right-leaning Heritage Foundation.
She noted that “many workers haven’t been permanently separated from their jobs” and that parts of the economy are restarting.
House Democrats last month approved a $3 trillion relief package. The bill includes nearly $1 trillion in aid to state and local governments, which cut nearly 600,000 jobs in May, Friday’s report showed.
Many Republicans, though, are concerned that state and local governments might use the money for nonvirus issues, such as shoring up pension funds.
Trump, however, endorsed the idea of more relief. “We’re set up to do more if we want. I think we should because we are dominant,” he said at the White House on Friday.
Vice President Mike Pence said on Friday that the White House is open to providing aid to state and local governments in the next relief package as long as the funding goes to coronavirus-related expenses.
“We are open to help states with coronavirus-related costs,” he told CNBC, adding, “Make no mistake about it, the president has expressed a strong openness to another relief bill. … The governors around this country know that President Trump and I are ready, willing, and able to work with them.”
Stan Veuger, a resident scholar at the right-leaning American Enterprise Institute, said that Congress better include state and local funding in the next relief bill.
“State and local governments, which have to run balanced operating budgets and are generally approaching the end of their fiscal year, need support from the federal government to avoid unnecessary job losses there. I do not believe Congress and the administration do, in fact, want to defund the police,” he stated via email.
The Senate is not expected to take up the House-passed bill. Senate Majority Leader Mitch McConnell, a Republican from Kentucky, said last week that the next coronavirus aid package will be written in the Senate and negotiated with the White House.
McConnell said the next measure the Senate will negotiate would be “narrowly tailored” and would include “narrowly crafted liability protections” for businesses, healthcare facilities and professionals, and universities. It may also include “additional assistance” for small businesses, healthcare, and the unemployed, he said.
More money for state and local governments “is possible and certainly worth considering,” he said, but he added that the federal government has already allocated $150 billion in federal aid to the states.
He said a decision would be made about whether to take up another relief bill in “about a month.”
