Does coronavirus economic stimulus do enough for the 99%?
This editorial page was quite clear earlier this month when word of a federal COVID-19 relief package began trickling out of Washington: “We better spend it right. That means getting most of that money straight into the hands of the working people and small businesses who have been hardest hit.”
At that time, we prepared you for the government to distribute “$1 trillion or more.” But on Friday, the House of Representatives approved — and President Donald Trump quickly signed into law — a colossal $2 trillion emergency relief bill, which shows just how much economic damage the pandemic has caused.
Our early read is that this stimulus could have been crafted to do more for average Americans and small businesses rocked by layoffs, shutdowns and lost commerce. That said, there are a lot of elements we won’t be able to judge until the money starts flowing.
So we’ll give Congress and the president this: The bipartisan package is at least a start toward helping those who have lost their livelihoods. Let’s break it down.
The mixed bag
The biggest bailout in U.S. history provides a direct, one-time $1,200 payment for individual workers making up to $75,000 a year. Families will get an additional $500 per child. Is that enough aid for an out-ofwork person or family? In our view, clearly not, especially given that the average U.S. mortgage is $1,500 and the typical renter pays $1,000 a month or more.
There’s also an expansion of unemployment insurance, but it’s unclear whether this will be enough to help the record 3,283,000 Americans — including 114,663 Illinoisans — who filed for unemployment just last week.
Then, there are $367 billion worth of federally guaranteed loans for the nation’s 30 million small businesses — companies with fewer than 500 employees — through a so-called Paycheck Protection Program. Workplaces that continue to pay employees until the crisis ends would have the principal on those loans forgiven, effectively making them government grants, according to financial publication Fast Company. This sounds extremely promising, but the devil is in the details.
Small businesses make up 99% of the nation’s employers. But the larger corporations — the 1% — appear to be in line for better goodies, including a piece of a $425 billion Federal Reserve loan fund. Airlines and hotels, industries that already have access to tremendous amounts of credit and capital, nonetheless could apply for a share of an additional $75 billion loan pool set aside by the stimulus package.
Where the bill gets it right
Unemployment benefits will be expanded to include workers in the gig economy, such as freelancers, ride-hailing drivers and the like.
The nation’s 6,000 hospitals and health care systems are in line for $100 billion to increase staff, buy protective equipment and cover other costs brought on by the pandemic. That help cannot come quickly enough, as cities are facing severe shortages of masks, ventilators and other equipment.
FEMA’s Disaster Relief Fund is set to get a $45 billion boost to help the agency provide help to state and local governments.
We also like that food banks will get $450 million. And with the November elections on the horizon, the $400 million to increase voting by mail, online voter registration, poll workers and additional polling locations is also welcome.
In addition, the bill supports the appointment of an inspector general and an oversight committee to monitor corporate spending.
And given the mindset of the White House these days, we’re especially glad to see a provision that bars businesses owned by Trump or his immediate family from getting stimulus loans. The vice president, Congress and federal department heads also are prohibited.
Next steps
Even so, Congress cannot rest. “This, however, cannot be the end. Congress must do everything in its power to continue helping struggling hospitals & working families,” Sen. Dick Durbin tweeted on Friday.
Lawmakers immediately should begin assessing what works and what doesn’t in this stimulus — and brace for the next one — all with an eye toward putting working families ahead of corporate boardrooms.
Senate Majority Leader Mitch McConnell called the package “a wartime level of investment in our nation,” and he’s correct. The global war against the coronavirus is likely to be costly and protracted.
Congress and the president have taken a critical first step toward eventual victory. But there are many battles to come.