Missing the $1,200 payments to individuals, $2,400 to couples or up to $3,,400 for families, the new “bipartisan” stimulus legislation is a classic half-measure, designed to do something for the millions of U.S. citizens and businesses struggling in the Covid-19 era. House Democrats proposed a more ambitious stimulus bill called the $ 3.4 trillion HEROES Act May 25, only to watch it die on the vine in Congress over the last six months. Now that the situation is far more dire for average citizens, Congress continues to play games with peoples’ lives. Whatever’s discussed today, the $908 billion stimulus bill backed by Senate Majority Leader Mitch McConnell (R-Ky.) doesn’t do enough to make a dent on dire economic circumstances that has 68-year-old Federal Reserve Board Chairman Jerome Powell begging for more stimulus McConnell says he’s worried about federal budget deficits.
Allianz SE’s 62-year-old chief economist Mohamed El-Erian says Congress lacks the will today for appropriate stimulus but could see things changing after Jan. 20, 2021, when President-elect Joe Biden arrives at the White House. But if there were ever a call to defeat the two GOP candidates in Georgia and turn the Senate to Democrats, it’s the dithering going on in the GOP-controlled U.S. Senate. What doesn’t McConnell get about the state of the U.S. economy, prompting Powell to maintain zero interest rates because of the protracted Covid recession? Only Wall Street, that’s disconnected from Main Street, continues to rally on possible future trends that could see improvement in the economy sometime in a murky future. For the rest of the street-economy in the U.S., widespread Covid shutdowns in the nation’s biggest cities are driving more ordinary people into unemployment, insolvency and homelessness.
Any stimulus package agreed to by Democrats and Republicans must include the same $1,200 payments to individuals seen in the $2.2 trillion March 25 CARES Act, that gave citizens some resources to pay their bills. Without direct payments to citizens like the CARES Act, small businesses will not see the bump needed to lift the U.S. economy out of the current recession. McConnell’s proposal included $180 billion for expanded unemployment benefits, $160 billion for state and local governments and $288 billion for small businesses, all is fine but not enough to help the man-in-the-street. Talk about penny-wise-and-pound foolish, the $908 billion proposal doesn’t go far enough where it’s important, putting cash into consumers’ pockets to pay bills and spend into the consumer economy. Congress must go back to the drawing board and figure in enough cash to make direct payments to consumers.
When considering a new stimulus bill, 74-year-old President Donald Trump objected to Democrats paying state and local government before ordinary citizens struggling in the Covid-hobbled economy. McConnell needs to listen to economists like El-Erian that says the longer stimulus is delayed the longer the recession will last. When it comes to federal budget deficits or Continuing Budget Resolutions [CBRs], there’s no end in sight to the deficit spending unless the economy can generate more jobs. Only by reducing unemployment can the government collect enough tax revenues to reduce exploding federal budge deficits now approaching $4 trillion. McConnell and other Republican don’t like hearing Rep. Rashida Tlaib (D-Mich.), part of Rep. Alexandria Ocasio-Cortez’s “ the squad,” telling Congress that they must include direct $1,200 payments to taxpayers.
McConnell needs to pony up the new stimulus bill $290 billion to include direct payments to citizens currently unable to meet basic obligations including mortgages, rent, food and utilities. Studying how the CARES’s Act cash was spent by U.S. citizens, the Federal Reserve Board found it went to pay down debt and add to savings. “Unless policymakers act quickly to respond to the crisis at the scale necessary we risk the damage to the economy last much longer than necessary, particularly for those at the bottom who have been hit the hardest,” said the Economic Security project, a group of 127 economists. Sending out direct payments would have a “disproportionately positive impact on the overall economy,” said Jason Furman, former President Barack Obama’s chair of Council of Economic Advisors. McConnell’s failure at a equitable stimulus bill could lead to his demise.
With the Jan. 6 runoff elections in Georgia, McConnell’s dithering on a reasonable stimulus that includes direct payments like the CARSE’s act could wind up doing him in. Voters are more fed up that ever with out-of-touch politicians who took stimulus cash for his wife, Elaine Chow’s family shipping business. McConnell’s original $553 billion stimulus bill was an insult to the hardworking men-and-women now suffering under the Covid-19 economic crisis. Without going back to the May 25 $2.2 trillion Democrat-backed HEROES Act, McConnell and his GOP cronies would only have to add $290 billion more to cover direct payments just like the $3.2 trillions CARES Act. Without the direct payments, McConnell faces losing his job as Senate Majority Leader. If the Nov. 3 showed anything, it’s the Democrats in swing states have momentum to change the Senate.
