December 3, 2020

COVID Relief Bill

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“A bipartisan group of lawmakers announced a new stimulus proposal Tuesday in an attempt to resuscitate failed coronavirus aid talks… the plan—which is not finalized and could change—includes $300 weekly enhanced federal unemployment benefits for four more months, $160 billion in state and local aid, and liability protections for businesses in the short term, but it will likely exclude a second round of stimulus checks to keep the cost of the bill down…

“The agreement would also provide for another $288 billion for small businesses, including for the popular Paycheck Protection Program of forgivable loans, $45 billion for transportation, $25 billion for rental assistance and $35 billion for healthcare providers, according to the lawmakers.” Forbes

“House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer on Wednesday urged Senate Majority Leader Mitch McConnell to use [the] $908 billion bipartisan coronavirus stimulus plan as the basis for relief talks as Congress scrambles to send aid to Americans before the end of the year… McConnell quickly shot down the bipartisan plan after its release Tuesday. He has endorsed only about $500 billion in spending in a new package.” CNBC

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From the Left

The left sees the bipartisan plan as better than failing to pass a bill altogether, though they’re critical of the corporate liability shield.

“On just about every item, the appropriation is inadequate to the level of need. Democrats should certainly push for better terms (extending the enhanced unemployment benefits beyond four months, or tying them to some objective measure of labor-market conditions such as the unemployment rate, seems like an especially worthwhile place to push). But it’s not clear to me how Democrats end up with a much better deal than this

“If they do not sweep the Georgia Senate election runoffs in January, then Mitch McConnell will still control the Senate when Biden takes office, while Nancy Pelosi will preside over a much slimmer House majority than she does now. I see little basis for believing that Democrats will be able to get better terms from this new Congress than they have from the current one…

“More important, America’s most vulnerable cannot wait two months for aid. And from a macroeconomic perspective, an ounce of recession prevention is worth a pound of cure. If America enters a recessionary spiral — with job losses leading to lower consumer spending, leading to more job losses — the fiscal cost of helping every constituency that Democrats wish to aid will rise substantially.”
Eric Levitz, New York Magazine

“Probably the most controversial aspect of the proposal is its omission of another round of direct payments to households, though this is defensible given its inclusion of $26 billion in additional nutritional aid for low-income families… Imperfect as it is, the bipartisan proposal merits support both in substantive terms and political ones

“Substantively, it is better — much better — than nothing, which is what the 10 million who remain jobless, and the 26 million facing food insecurity, are getting now. Politically, it shows the way to yes for the negotiators, Mr. Mnuchin and House Speaker Nancy Pelosi (D-Calif.), and puts pressure on them to get there. Things might have been easier if Ms. Pelosi had shown more flexibility before the election; they’d be easier now if Mr. McConnell would budge from his maximum of $500 billion and if Mr. Trump would press for legislation instead of ranting about vote fraud. Cooler heads must prevail lest eight months of hard-won economic progress be allowed to unravel.”
Editorial Board, Washington Post

Critics of the bill, however, posit that “Unable to pass [the] federal liability shield legislation on its own, lawmakers from both parties have now come together in a grand show of post-election bipartisan unity to help their corporate donors create a hostage situation that’s something out of a dystopian sci-fi movie. Their proposal predicates long overdue and desperately needed unemployment assistance on the condition that corporations are given a get-out-of-jail-free card… corporate managers were allegedly betting on the number of COVID deaths that would happen at a meatpacking plant…

“With liability shields, those same employers will know that they can get away with all kinds of cost-slashing and corner-cutting that endangers workers and denies them access to basic protective gear. In other words, corporations will know they can drive the COVID body count ever higher, and they won’t even have to worry about being called into a courtroom to answer for their crimes…

“[The shield] would strip frontline workers of their last remaining legal tool to protect themselves in the workplace — at the same that time the unemployment system is designed to financially punish those workers if they refuse to return to unsafe workplaces during the pandemic.”
David Sirota and Julia Rock, Jacobin Magazine

“Coming in at just over $900 billion, [the bipartisan proposal] moved substantially away from what Democrats want (around $2 trillion) and a whole lot closer to what Sen. Mitch McConnell (R-Ky.) has pushed for (around $500 billion). Naturally, the Senate majority leader responded to this dramatic move in his direction by immediately announcing that this compromise is a non-starter…

“By reaching this agreement with Republicans, a group of Democratic senators made it easier for McConnell to demand that they move still further in his direction once he tries to jam them with his proposal in the upcoming funding bill. Now the ‘compromise’ position has moved to a point between $900 billion and $500 billion. Which raises a question: Is there any serious utility at all in Democratic senators seeking compromise with Republicans, even ones who appear to be acting in good faith, if there’s simply no chance that it will meaningfully influence McConnell, and if it’s preordained that McConnell will simply seize on this to his tactical advantage?”
Greg Sargent, Washington Post

From the Right

The right is generally supportive of the bipartisan plan, though they argue for the addition of stimulus checks.

The right is generally supportive of the bipartisan plan, though they argue for the addition of stimulus checks.

“More than 10 million Americans soon face the loss of unemployment benefits and health insurance. Millions of others face the threat of eviction from their homes in the new year. Some 26 million Americans reported not having enough to eat during the past week. In cities across the nation, lines stretch at food banks struggling to find the resources and volunteers to meet the demand…

“Even with widespread public cooperation, vaccinating a critical mass of Americans will take months. Meanwhile, there is much to do that could mitigate the effects of the crisis. Elected officials can build a financial bridge to a post-pandemic world and help tens of millions of Americans keep food on the table, a roof over their heads, their businesses in operation, and essential services functioning until the middle of 2021, when mass distribution of vaccines will finally begin to end this scourge…

“None of this is—or should be—controversial. Elected officials came together across party lines to do all these things less than nine months ago. Yes, it cost an eye-popping amount of money. But most Americans believe it was worth it. According to a recent survey, 74% of Americans, including 56% of Republicans, want Washington to do more.”
William A. Galston, Wall Street Journal

“Small and medium-size businesses and their employees would benefit immediately from reauthorizing the highly successful Paycheck Protection Program. This $669 billion program provided forgivable loans to more than five million businesses to support payroll costs. Recent estimates suggest PPP, with an average loan size of only $101,000, may have supported as many as 51 million jobs, and saved as many as 13.6 million…

“[In addition to what’s in the proposed $908 billion bill] President Trump has proposed additional support to households similar to what was offered in [the CARES Act]. Single tax filers received a $1,200 rebate; married couples filing jointly received twice that; and every child added $500 to the rebate total. Unemployed workers also received a significant supplement to unemployment insurance…

“By targeting income replacement for the most vulnerable households, such household support would help ensure that consumer spending—70% of U.S. output—is resilient to potential labor market weakness in coming months.”
Tyler Goodspeed and Peter Navarro, Wall Street Journal

It’s absurd to push a relief bill without direct stimulus as a component. For one thing, all sides agree on the need for it, and for another, selling spending like this without giving direct aid to voters is political malpractice…

“Pelosi and Schumer have now signaled that they will come down significantly from their earlier demands, which has been the biggest obstacle to the passage of a Phase 4 relief bill. Republicans need to wrap this up as quickly as possible to get funding in place for vaccine distribution, and everyone can go home for the Christmas holiday with a small win in their pocket after all.”
Ed Morrissey, Hot Air

Some, however, argue, “This new $908 billion compromise is ‘only’ 40 percent of the size of the Heroes Act, but it is still disconnected from what is happening in the real world. It is renewing many problematic programs fueled by the belief, I am sure, that the economy can stay on ice for months as long as it is sustained by government spending. I am sure the restaurants that benefited from PPP but have closed permanently have a different perspective on this issue…

“State revenues fell less than feared and are going up again… What’s more, since 1975, the unemployment rate has averaged 6.3 percent — it is forecast to be 6.8 percent for November. I am sorry, but extending and expanding UI — at a scale that is out of whack with past expansions — when the unemployment rate is close to the historical average is simply wrong…

“[Lastly] 1.7 percent of this bill — or $16 billion according to the COVID Framework document presented this morning — is specifically about manufacturing vaccines, distribution, and testing… If spending bills are a reflection of politicians’ priorities, Americans are getting a clear signal that these politicians have incredibly messed-up priorities with very little focus on what should matter the most right now. This compromise is about business as usual. It’s about spending money on the stuff politicians always want to spend money on. The fact that some Democrats are willing to spend less than they wanted and that Republicans are willing to spend more than they should is not noble. It’s politics.”
Veronique De Rugy, National Review

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