While the coronavirus pandemic has been a public health disaster for this nation since March, killing more than 145,000 people and sickening more than 4 million, it has not been an unmitigated financial catastrophe.
There has been considerable monetary pain for individuals and businesses, to be sure. Jobs have been lost, stock markets roiled and companies closed, mostly temporarily, sometimes permanently. But the country has not plunged into economic depression, even with 30 million Americans collecting unemployment benefits and many sectors of the economy stilled.
The economy is holding up thanks to $3 trillion in quick, aggressive aid from the federal government. Putting money in people’s and businesses’ pockets stopped the bleeding in two ways: The CARES Act passed in April kept consumers spending, and kept Americans confident that Washington would act as needed to prevent a collapse.
Aid running out
Now that batch of aid has nearly run out. The additional $600 a week in unemployment insurance being tacked on to state allotments will end in many states by July 25 and everywhere by July 31. The $1,200 per person the federal government sent out this spring to most households is long gone. Funds sufficient to help schools through site cleaning, and masking, distancing, transporting and teaching children, at home or school, have not been allotted. The nation’s public transportation systems are hemorrhaging money.
And states, counties and municipalities, if not granted enough aid to make up for lost sales tax and other revenue, will soon have no choice but to begin slashing payroll, which will mean cutting services.
These government employees perform crucial tasks at decent wages. Significant cuts to public payrolls would create a double whammy of economic stagnation and critical tasks left undone.
President Donald Trump, who failed to lead in many ways during this crisis, now seems likely to agree to any bill Congress sends him to keep the nation afloat. As the negotiations intensify, this necessarily expansive and regrettably expensive stimulus bill must include:
- An extension of expanded federal unemployment benefits. The argument offered up by Sen. Ted Cruz and other Republicans that the help keeps people unwilling to return to work is weak, as employees who can return to their old jobs but refuse to lose benefits eligibility and new openings aren’t plentiful. The argument that it pays the unemployed more than they made working is often untrue, and petty, too. Many state unemployment systems are too antiquated to allow partial or scaled payments, and giving workers $600 is less worrisome than leaving workers, and the economy, in the lurch. This is also a far higher priority than the stimulus checks Trump and GOP congressional leaders are pushing that would go, in many cases, to people who have suffered no hardship.
- Aid to states and municipalities, enough to keep employees working and safe. New York and other blue states may have the biggest budget holes (so far), but they’re also our strongest economic engines. Republicans who think they can let blue locales suffer without crashing the national economy don’t understand the nation or the economy.
- Aid to schools. What they’re being asked to do, remotely and on campus, is expensive and unprecedented. Not funding these efforts means setting up our schools, and our children, to fail, and unleashing more layoffs.
- Aid to transit agencies, starting with the Metropolitan Transportation Authority. They are a crucial ingredient in a dynamic economy. Supporting them is costly, but letting them languish would be far more expensive.
- Funding for all necessary testing and tracing of the coronavirus and for the Centers for Disease Control and Prevention. There is no justification for skimping on science or medical needs in a pandemic.
- A lifting of the $10,000 cap on the federal deduction for state and local taxes enacted with the 2017 tax reforms. Republicans got huge retroactive tax cuts they craved in the CARES Act, including the retroactive lifting of limits imposed on pass-through business losses. Now the SALT cap has to be lifted to restore fairness, and keep the economies in suburbs like Long Island afloat.
Making a deal
Much of this was in the Democrat-controlled House’s admittedly inflated $3 trillion bill passed in May.
Republicans’ biggest demand is immunity for employers from liability lawsuits related to the coronavirus. That’s reasonable, going forward, but only in the case of employers who can show they took proper, federally mandated health precautions. The GOP also wants more Paycheck Protection Program loans and other aid to businesses. Both are needed and neither is opposed by Democrats, though the sides differ on the details.
Republicans have left town for the weekend without putting a deal on the table, showing the same lack of urgency they’ve exhibited for months. But Americans want and need plentiful help, now, to restore their finances and the nation’s confidence. Democrats have a plan to provide that aid and Republicans, where they cannot beat their foes quickly, must join them.
—The editorial board