Before the U.S. Senate gets back in their seats next week, the House has already approved a $3 trillion, 1,800-page relief bill, providing about $1 trillion in relief funding to states, counties and cities strapped for cash in the coronavirus AKA SARS CoV-2 or Covid-19 crisis. Plunging the U.S. into another Great Recession, the 2020 coronavirus crisis has pushed the U.S. economy into a severe recession, with the unemployment rate spiraling out-of-control, now at 14.7% with 30 million unemployed nationwide. Federal Reserve Board Chairman Jerome Powell predicts the unemployment rate could top 20% before it starts to level off. While the coronavirus curve flattens, the unemployment curve heads straight up with no end in sight. Democrats $3 trillion relief package provides a wish list for progressive causes, something not welcomed in the Republican-controlled Senate.
Democrats want to expand cash to families, upping the $500 dependent credit to $1,200, including proving credits for adult dependents at the same rate. Extending more benefits emergency family and medical leave, doubling the $105 billion CARES Act benefit. Putting $3.6 billion to protect federal elections, $25 billion to support the cash-strapped U.S. Postal Service, $100 billion in low-income support, $75 billion for homeowners assistance and $100 million for Violence Against Women Prevention and Prosecution programs, rounds out the Democrat wish list. Democrats won’t find Senate Republicans too receptive to bailing out the Post Office. Of all the provisions in Democrats’ relief bill, providing $1 trillion in relief to states, counties and cities makes the most sense. Instead of providing $200 billion to essential workers in pandemic hazard pay, the money should got to local, county or state governments.
Sen. Majority Leader Mitch McConnell (R-Ky.) expressed concern about the spiraling national debt. Rep. Alexandria Ocasio-Cortez (D-N.Y.) said if Republicans were worried about the national debt they should rescind their 2017 tax cut which cost the national debt $2.289 trillion. McConnell and Senate Democrats don’t like to admit that the loss of government revenue to the 2017 Tax Cut and Jobs Act actually backfired, increasing federal budget deficits now running about $4 trillion, according to the nonpartisan Congressional Budget Office [CBO]. “We must think big for the people now, because if we don’t, it will cost more lives and livelihood later,” 80-year-old House Speaker Nancy Pelosi said introducing what she called the “Heroes Act.” Pelosi said the Heroes Act would help get the country back to work by extending unemployment benefits to January 2021.
Republicans were quick to slam Pelosi’s wish list and nothing more than an Election Year gimmick to try to win Democrat votes. “This is nothing more than a messaging exercise from House Democrats,” said Sen. John Thune (R-S.D.). “It is an effort to try to create talking points for the 2020 election. It’s not going anywhere and we know that.” Thune and other Senate Republicans can’t evaluate the effect of the first $2.2 trillion CARES Act, where IRS payments are still trickling in to households around the country. Spending money on pandemic hazard pay sounds good but should be left to city, county and state governments managing hospitals or clinics treating Covid-19 patients. Spending money on protecting federal elections or the Violence Against Women Act have no place in a Covid-19 relief bill. Local, county and state governments are strapped for cash.
Expanding payments to families, dependent children and adults makes no sense when it’s impossible to evaluate the effect the first CARES Act yet. Democrats want more money for childcare, something that makes sense for working single mothers, who’ve been hard hit because schools are closed. No one knows yet whether local school districts will reopen in the late summer or fall, taking the child care burden off single mothers. Whatever money goes toward expanded childcare, it should go from state governments, distributed like education funding to city and county governments. Democrats plan to provide at least $1 trillion to states, counties and cities makes sense, more than expanding more cash for low-income rent-support. Money for federal elections has no place in a Covid-19 relief bill, designed to make up massive tax shortfalls from shutting down the economy.
Before Republicans reject out-of-hand Democrats proposal, they need to look at the big picture from the widespread economic shutdowns. With tax revenues devastated, the next CARES Act, whatever its name, needs to make states, counties and cities whole again from lost tax revenues. At the same time, states, counties and cities must be put on notice that they cannot arbitrarily keep businesses closed and expect the federal government to provide financial relief. Whatever the risks of the coronavirus, state, county and local governments can no longer afford to lock ordinary citizens out of their businesses. Public health experts can no longer dictate, in perfect world, to keep businesses shuttered. Federal and State governments can put seniors or people with medical conditions on notice that they return to work at their own risk. But the bulk of Americans must get back to work.