COVID-19 recovery would be a bargain at $3 trillion
WASHINGTON — Until now, President Trump and the Republicans could at least try to argue the nation’s economic collapse was the result of a pandemic over which they had no control. And they could point to relief packages totaling $2.8 trillion. It’s already a very tough case to make. Trump’s failure to take the crisis seriously early on and his refusal to organize a national strategy for testing, contact tracing and the production of needed health equipment made everything much worse. Polls suggest the botched response is costing Trump and his party.
But the stakes, both substantive and political, became much higher when House Democrats released a plan, broadly supported by Senate Democrats, to inject $3 trillion more into the economy, largely directed toward those suffering most. The House was debating the package Friday night.
The Democrats’ emphasis is not on more business bailouts but on helping people going hungry, losing their health care and having trouble paying the rent or student loans. They would also funnel close to a trillion dollars to state and local governments facing mass layoffs as their revenues collapse.
And House Speaker Nancy Pelosi, D-Calif., got an unexpected boost for her aggressive approach Wednesday from Federal Reserve Chairman Jerome Powell. “The scope and speed of this downturn are without modern precedent, significantly worse than any recession since World War II,” Powell said in a speech delivered online.
In a direct endorsement of bold action, Powell, who was named by Trump, added: “Additional fiscal support could be costly but worth it if it helps avoid long-term economic damage and leaves us with a stronger recovery.” Powell underscored the need to focus on the most vulnerable by noting “the burden” of the economic collapse “has fallen most heavily on those least able to bear it.”
Contrast this with Monday’s statement from Senate Majority Leader Mitch McConnell, R-Ky.: “We have not yet felt the urgency of acting immediately.” Those 10 words already seemed out of touch at a moment when some 36 million Americans are out of work, and they look even more tone-deaf in the wake of Powell’s intervention.
Senate Minority Leader Chuck Schumer, D-N.Y., is not letting a day go by without offering a comparison of Trump and the Republicans to Herbert Hoover, the Depression Era president who was routed by Franklin D. Roosevelt in 1932. Through inaction, Schumer tweeted on Monday, Trump and McConnell “could lead us into a Second Great Depression.”
This is why Republicans won’t get very far with their favorite talking point that Pelosi’s package is just a “liberal wish list,” a phrase invoked as if it were an exorcism.
For one thing, the package doesn’t go far enough for many liberals in Pelosi’s caucus. Reps. Pramila Jayapal, D-Wash., and Mark Pocan, D-Wisc., of the House Progressive Caucus wrote the House leadership to ask for a delay in a vote on the proposal. Jayapal is pushing for federally funding business payrolls, an idea that has also been advanced by Virginia’s moderate Democratic Sen. Mark Warner.
But the larger problem is that vague “liberal wish list” rhetoric is a name-calling exercise designed to avoid taking a stand on specific proposals that appeal well beyond those who call themselves “liberal.”
The GOP will have to explain why it’s a bad idea for the federal government to pick up the tab for those who lost their health insurance when they lost their jobs. Republican state and local officials want and need fiscal relief no less than their Democratic counterparts. Extending unemployment benefits is a direct response to projections of high rates of joblessness well into 2021. With hunger on the rise, isn’t a food stamp increase the most efficient — and, yes, market-oriented — form of relief?
And if your slogan is to “get the country back to work,” can you really argue against financing a testing, tracing and treatment program to restore confidence among Americans who remain, in large numbers, petrified of a virus still out of control?
Sure, the sticker shock of a $3 trillion package will become another convenient line of attack for those who don’t want to address its specifics. “It’s a lot of money,” Pelosi herself observed dryly on “Morning Joe” Wednesday.
Yet its size is also its advantage, not only as an opening bargaining position for the House against a recalcitrant Senate GOP, but also as a measure of what Powell called “a level of pain that is hard to capture in words.”
Powell is right: The choice is to act forcefully now or to sink into long-term stagnation. You don’t need to be a student of Herbert Hoover’s travails to know which is the better path.