[Kevin Hassett, Cnn Economic Commentator:] Going to address the problems you were talking about.
[Poppy Harlow, Cnn Anchor:] But, Kevin but, Kevin, these this
[Hassett:] I agree that it's it stinks that the stuff expired. You go ahead.
[Harlow:] It's you and I don't rely on $600 in additional aid a week to pay our rent or feed our family. That's not our situation. But for millions of Americans, it is. And they stopped getting those checks on Friday. And that's why I don't think it's too far to say that it's a failure because for my I mean it was back in May that the House proposed legislation. And I get that the Republican-led Senate didn't doesn't agree with it, but they've known that Friday was coming for months and negotiation didn't really start until it was about to run out.
[Hassett:] You know right. You know you know what, it's it's the negotiation that's been going on and on and on. When I was still in the White House, Secretary Scalia and I were working with every state's UI program to try to think about a way that we could fix the thing so that we weren't paying people a lot more not to go to work than to go to work. And the thing is something that the White House worked on throughout. And they have a very strong position about how they want to do it. The House has their strong position. And what's going on, as always happens with legislation, is that they're arguing right up to the very end. But when the bill passed, I think the people who didn't get their checks, and who need that money I think they can fully expect that the money will be back filled in this sort of week where they're not covered will be filled in when the bill happens.
[Harlow:] I'm let's hope so. Let's hope so.
[Hassett:] It will be, yes.
[Harlow:] The moratorium on evictions also lapsing. So the question is, what happens to those folks? What would you what would you advise, Kevin, because you saw Moody's analysis that if the additional aid were brought down to $200 per week for unemployed people, nearly a million jobs could be lost to the end of the year and unemployment could be 0.6 percent higher. Do you think that's what will happen?
[Hassett:] Yes, I don't think look, the Moody's analysis, it's so Mark Zandi's team, you know, Mark is a big supporter of Nancy Pelosi. They put out analysis that I don't really trust sometimes. Sometimes they put out great stuff. But on this, if you pay people a lot more to stay home than to go to work, then the idea that there are going to be more people going to work, it just doesn't add up. And so I think that what Republicans are trying to do is fix the
[Harlow:] Well, but that's not true. The Yale you saw the Yale study from July.
[Hassett:] No
[Harlow:] I mean you saw the Yale study from just a few weeks ago.
[Hassett:] The Yale study was early data.
[Harlow:] And I'm just going to can I quote can I quote from it? Quote, we find no evidence that more generous benefits disincentivize work either at the onset or the expansion as firms look to return to business over time. It's wrong?
[Hassett:] Right. Well, that's based on no, that yes, it is wrong. And when we get the full data, that result is almost surely going to be reversed. But think about it, Poppy. Just think about the logic of it. If if I pay you so if you take a typical median family say in Tennessee, that if they don't go to work under the $600 plan, then they get about $90,000 a year. And if they do go to work, they get about $50,000 a year. And so the assertion that staying home and getting $90,000 or going to work and getting $50,000, that that's not going to have an effect on your decision, it just doesn't add up. It's not economics.
[Harlow:] Well, that's not true because
[Hassett:] And so, you know, I wonder you know, I haven't played with their data yet, but I really, really don't believe that study.
[Harlow:] All right, I believe and have heard from so many Americans that they that they want to go back to work and they want to go back to work and they want to feel safe.
[Hassett:] Sure.
[Harlow:] Even the University of Chicago numbers shows it's about one in five that are doing what you're saying. But let's move on. Larry Kudlow made this prediction about the economy just last week. And this was just before we saw those numbers that showed that in the second quarter economic growth in the U.S. contracted by almost 33 percent. Here's what he says is coming.
[Larry Kudlow, White House Economic Adviser:] I don't think the economy is going south. I think it's going north.
[Jake Tapper, Cnn Anchor:] Yes.
[Kudlow:] And I still think, Jake, there's going to be 20 percent growth rate in the third and fourth quarters.
[Harlow:] Should Americans, you know, prepare themselves for that, Kevin, 20 to 30 percent growth in the next two quarters or is that too rosy?
[Hassett:] Right. No, I think that Larry's about right, that's about what the consensus is. And, in fact, I think, Poppy, just because everything gets put through a political lens but not when you and I talk, of course, one of things that's going to happen is that you're going to see a third quarter that's about a 20 percent growth rate. So it's going to be about the biggest growth rate in U.S. history in the third quarter and President Trump's team is going to argue it's because of their sound policies. I kind of lean towards that argument. And President Biden's supporters are going to say, oh, no, no, it's going to happen anyway. But you could already see that people that support Vice President Biden, they're kind of getting out ahead of the really, really big third quarter number by sort of arguing that it isn't anything that the president did.
[Harlow:] But given
[Hassett:] But for sure I think everybody agrees the third quarter is going to be just a whopping number. Because if you turn an economy off and then you turn it back on, then it goes down a lot, then it goes up a lot. And that's something that is
[Harlow:] Well, the problem is
[Hassett:] You know, would have happened anyway
[Harlow:] The problem is, if you have to turn it off again. And this pandemic is just getting worse in many states, as you know, Kevin. You told me this spring, if we have another wave, that's going to mean another hit for the economy for sure.
[Hassett:] Sure.
[Harlow:] Listen to this from a Republican. This is from Neel Kashkari, who, as you know, is now the president of the Federal Reserve Bank in Minnesota.
[Hassett:] Oh, sure.
[Harlow:] He said that the U.S. economy will benefit only if we have a stringent nationwide lockdown for four to six weeks. Listen to this.
[Neel Kashkari, President, Minnesota Federal Reserve Bank:] If we don't do that and we just have this raging virus spreading throughout the country with flare-ups and local lockdowns for the next year and two, which is entirely possible, we're going to see many, many more business bankruptcies. That's going to be a much slower recovery for all of us.
[Harlow:] Is he right?
[Hassett:] Well, he's absolutely right that the recovery would be much faster if we control this thing and that the numbers for the economy have surprised on the upside really. Look at the jobs numbers and the unemployment rate and the numbers on the disease side have surprised really, really negatively. And the thing that surprised me really, Poppy, compared to the conversations we had even before I went back to the White House, is just that because you know, there is a second wave going on. And there really hasn't been much change to economic policy. And that's the thing that's surprises me. I think that what Neel is saying, you know, it's something that in pockets of the country absolutely might make sense
[Harlow:] OK.
[Hassett:] Because there are places
[Harlow:] That
[Hassett:] Where the positivity rate for the test is above 20 percent, where the cases are expanding quickly, you know, where basically everything that you saw in New York, you know, way back in March is happening. And so for me it does feel like there's some places that are too open.
[Harlow:] OK. Well, that's a that's a really big deal because you were senior adviser to the president. You lead the you know, the CEA and you're saying it might make sense to close down at least parts of this country for four to six weeks and that we are in a second wave, which the White House is not saying. Are you worried, Kevin, that they're not facing the reality here?
[Hassett:] If you look at the data if you no, they're they're getting the real numbers every day. And I think that, you know, there's like a heuristic question about what's a second wave. But if you look at the numbers, they kind of went up, they went down, they went up again and so, for me, yes, I would say that definitely in pockets of the country there's a second wave, or really I guess the see, here's the argument. The places that are having the waves now didn't really have a first wave. The places that had a first wave aren't really having a second wave. And so I think that that's the kind of thing the epidemiologists are talking about, about whether really it's a second wave or not. But if you look at the aggregate numbers for the U.S., there are two waves. It's right there in the data.
[Harlow:] Kevin, good to have you. We're out of time. We'll have you back very soon. Thanks so much.
[Hassett:] Thanks, Poppy.
[Harlow:] OK. We'll be right back.