And plenty of gaps could open up by summer if the GOP sticks to its current approach.

The Paycheck Protection Program, intended to help small businesses stay afloat, has been beset by problems from the start and already ran out of money once. It may do so again this week.

Economists suggest there is only a limited chance that most who lost jobs during the initial wave of the crisis — largely lower-paid service industry workers — will be reemployed by the summer. The jobless rate is likely to remain well into the double digits into the fall.

If the added benefits are not extended and more money is not pushed into the small business program, dreams that the economy could snap back to rapid growth heading into the November elections could be vaporized.

“There is a time and place to have these discussions about spending and debt, but now is certainly not the time,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. “I do think Republicans will have to relent here because the number of unemployed we are seeing is just horrendous. A lot of businesses have already gone under and more will follow.”

Farooqi added that “the unemployment rate is going to stay high through the end of the year. We will need extended help and it’s inappropriate to be having these discussions and saying things like states should be allowed to go bankrupt.”

McConnell brought up the state bankruptcy possibility last week on conservative commentator Hugh Hewitt’s radio show. “I would certainly be in favor of allowing states to use the bankruptcy route,” he said. “My guess is their first choice would be for the federal government to borrow money from future generations to send it down to them now so they don’t have to do that. That’s not something I’m going to be in favor of.”

The comments drew howls of rebuke from Democratic governors like New York’s Andrew Cuomo, who noted that his state pays far more into federal coffers each year than it takes out. Some Republicans, including Maryland governor Larry Hogan, also slammed McConnell’s remarks.

In an interview last week with POLITICO, McConnell also staked out a hardline position on another stimulus package. He expressed little appetite for adding much more to a federal deficit that the Congressional Budget Office now says could nearly quadruple this year to nearly $4 trillion. And he is leery of the federal government bailing out state pension funds. Any further aid to states is likely to feature the same restrictions included in the CARES Act that the money only go to offset losses directly attributable to the virus.

“You’ve seen the talk from both sides about acting, but my goal from the beginning of this, given the extraordinary numbers that we’re racking up to the national debt, is that we need to be as cautious as we can be,” McConnell told POLITICO last week. “We need to see how things are working, see what needs to be corrected, and I do think that the next time we pass a coronavirus rescue bill, we need to have everyone here and everyone engaged.”

Trump weighed in on the aid to states argument on Twitter Monday, basically echoing McConnell’s approach. “Why should the people and taxpayers of America be bailing out poorly run states (like Illinois, as example) and cities, in all cases Democrat run and managed, when most of the other states are not looking for bailout help?” Trump wrote.

Many economists, meanwhile, argue that it is not yet time to be “cautious” when considering further economic assistance for individuals, small businesses and cash-strapped state and local governments that have seen tax receipts crash. State and local governments employ around 13 percent of the American workforce. And huge layoffs in the sector helped worsen the 2008-09 recession and slowed the recovery, according to some analysts.

There may not be enough time to see if current federal assistance is working — as McConnell wants to do — before Congress needs to act again. It takes significant time for fiscal stimulus, including direct payments to individuals and businesses, to show up in economic data.

While the deficit is breaching historic levels, interest rates remain close to zero, meaning the cost of borrowing is historically low. And the old economic consensus that debt begins to get dangerous when it outstrips the overall size of a country’s economy, as is likely to happen to the U.S. this year, no longer really holds, especially for such a large nation that controls the most widely used currency in the world.

“In the next year or two, the more they do in terms of fiscal stimulus, the quicker the economy will recover. This is a very big whole the economy has to dig out of,” said Jim O’Sullivan, chief U.S. macro strategist at TD Securities. “There is going to have to be more aid for states.”

“One caveat to all this would be if markets get spooked by deficits and interest rates rise,” he said. “But we just aren’t seeing any of that at this point. I’m not saying something like that couldn’t happen in 10 years’ time, but right now, it’s pretty clear the U.S. needs more fiscal help.”

Burgess Everett contributed to this report.

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