Washington must avert an economic collapse

With new coronavirus infections being reported in the United States at an unprecedented rate, the nation’s economy is about to fall ill again, too. How severe that economic malady becomes depends on how quickly lawmakers respond.

There is a head-in-the sand reluctance to continue to fund the fight against economic collapse from both GOP congressional leaders and President Donald Trump that borders on monetary malpractice. Expirations of the programs that have helped most loom, with enhanced unemployment running out July 31 and the Payroll Protection Program shuttering at the end of the month. Another federal rescue package is badly needed for states and municipalities to continue to provide services and avoid massive layoffs of public workers.

The prognosis for the nation’s financial health is poor, as each day’s news makes more clear. Texas was one of the first states to reopen, and its GOP governor, Greg Abbott, has refused to back down, slow down, and recognize the reality: a daily case count that’s quadrupled to more than 6,500 in four weeks and emergency rooms about to be overrun. Thursday though, Texas paused its reopening and four counties stopped elective hospital procedures to make room for coronavirus cases.

California, Florida and Arizona are in just as bad a crisis, and about half the nation’s states are headed there. The chilling accompaniment to the medical numbers are new layoffs, closures and bankruptcies.

Universal Studios in Orlando announced broad layoffs Wednesday. Macy’s, with hopes of quick reopenings dashed, laid off nearly 4,000 workers Thursday. ATT says it will close 250 stores and dump 4,700 workers. Banking giant HSBC says it will lay off 35,000 workers, and Hilton will lay off 2,100. 

And New York City Mayor Bill de Blasio says a $7.5 billion revenue shortfall over this year and next could mean 22,000 layoffs. A study by Moody’s Analytics concludes that if the federal government does not bail out states and municipalities, the result will be 4 million jobs lost and a 3% reduction in gross domestic product.

Congress is set for a two-week 4th of July recess, and GOP leaders led by Senate Majority Leader Mitch McConnell say they are waiting to see the June jobs report next Thursday, and will consider it over vacation. The economy does show signs of life, but 1.5 million jobs a week are still being lost and increased infections and the resulting closures will reinforce the devastation of the job market.

Before recessing, Congress must extend the enhanced unemployment benefit of $600 a week that’s keeping families fed and spending, extend the Protection Paycheck Program keeping companies solvent and approve the $500 billion over five years Moody’s and other nonpartisan experts say state and municipal governments need. That’s far less than the $1 trillion Democrats in the House passed. Whatever Congress approves must include the $3.9 billion needed to keep the Metropolitan Transportation Authority operating.

This economy’s frail recovery could end in relapse and disaster without immediate treatment. Trump and the GOP need to stand behind their prioritization of prosperity and apply the needed medicine.

— The editorial board