The lack of a new stimulus bill may have contributed to surging virus cases amid reopening pressures, experts say

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• The US is breaking coronavirus infection records, causing some states and cities to consider imposing new lockdowns or reimposing them again.
• The gridlock on a new stimulus bill is causing some economists to partly attribute the worsening outbreak to the lack of new health and testing funding.
• Democrats and Republicans are still far apart on the size and scope of another coronavirus relief bill, and experts are fearful of what that could mean for the economy as winter approaches.
• Visit Business Insider's homepage for more stories.

The United States is experiencing a huge surge of coronavirus cases unlike any other in its nine-month battle against the pandemic. With the virus tearing through every state, the nation has shattered infection records the last four days. More than 165,000 new cases were reported on Friday.

The staggering caseloads are prompting some states to either impose or consider imposing restrictions to curb the virus's spread similar to March. Oregon and New Mexico are moving ahead with lockdowns. New York, Ohio, and Utah are enacting measures to limit private gatherings. 

A summer wave of virus infections followed after states lifted restrictions and businesses reopened. The latest surge of cases comes as winter weather starts moving people indoors where the virus is easily transmissible and pandemic fatigue weighs on many Americans.

All the while, Congress remains gridlocked on a coronavirus relief package and both parties are fiercely disagree on the size and scope of another government rescue effort. Democrats are assailing Republicans for insisting on a slimmer $500 billion relief plan. Instead, they are pressing for at least $2 trillion in additional spending. President Donald Trump has tuned out of the negotiations so far while he attempts to fight the election results.

The paralysis on stimulus has led some economists to partly attribute the worsening outbreak to the absence of an aid bill.

"A stimulus package would have included funds for public health and for testing and tracing. It would have provided funds for schools to reopen," Ernie Tedeschi, a policy economist at Evercore ISI, told Business Insider. "I think there has been some public health consequence from a lack of a stimulus bill."

Jason Furman, a former top economic advisor to President Barack Obama, recently said an federal rescue package can help choke off the pathogen's spread.

"Money spent limiting the virus has the greatest economic bang-for-the-buck of anything we can do," Furman wrote in a Wall Street Journal op-ed published Wednesday. "Given how quickly the virus spreads, every day that passes without this funding is especially costly, in jobs and lives."

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'The most difficult of Decembers'

The US has regained around half of the 22 million jobs lost from February through April, when the pandemic slammed into the economy. But those consequences fell disproportionately on low-income workers, given they are employed at higher rates in the battered retail and hospitality industries. The largest hotel group said in September two in three hotels in the US would not survive another six months without a federal rescue package.

"The rise in infections that have been going on worldwide may jolt people back into a sense of fear that people had in the spring," Tedeschi said. "That could have devastating consequences on the economy at a time when the environment for the virus will be the most dangerous anyway." 

Joe Brusuelas, chief economist at RSM, told Business Insider: "The lack of more fiscal aid is going to expose the poor and working-class to the most difficult of Decembers."

Some experts said a nationwide lockdown may be needed to keep the virus's spread in check. Dr. Michael Osterholm, a public health advisor to President-elect Joe Biden, suggested in a recent Yahoo Finance interview a large stimulus package subsidizing every part of the economy could help stave off severe losses among individuals and businesses.

"We could pay for a package right now to cover all of the wages, lost wages for individual workers, for losses to small companies, to medium-sized companies or city, state, county governments. We could do all of that," he said. "If we did that, then we could lock down for four to six weeks."

The head of Biden's coronavirus task force shot down the possibility of another lockdown in an ABC News interview on Friday, saying it wasn't an option that's currently being considered.

The stalemate on Capitol Hill shows no signs of breaking anytime soon as coronavirus cases and hospitalizations reach new highs. The unemployment rate remains elevated at 6.9%. It dropped from nearly 15% in April as employers started recalling furloughed workers or hiring new ones.

Democrats are ripping Republicans for refusing to acknowledge Biden won the election, arguing it is thwarting the country's ability to fight the pandemic and keep people afloat with the economic recovery slowing down.

"The longer Senate Republicans are playing this sad game is the longer they are denying families much needed relief from the covid health and economic crisis," Senate minority leader Chuck Schumer said on Thursday.

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