Congress is finally wising up to the scale of the coronavirus disaster — with 1 big exception
Since late February, Congress and President Trump have passed three bills in response to the coronavirus pandemic: A modest $8.3 billion investment in the public health response, then about $100 billion to beef up food stamps, state Medicaid budgets, unemployment benefits, and provide some limited paid leave. The third package, the CARES Act, was a whopping $2.2 trillion in aid that threw gobs of money at American households and businesses alike.
Now Congress is discussing a fourth bill — "CARES 2" as House Speaker Nancy Pelosi (D-Cali.) is calling it — that could "easily" clear $1 trillion. This is good news: As gargantuan as the third phase was, it's already proving itself to be grossly inadequate. And the ideas both parties are throwing out for the fourth iteration are surprisingly reasonable. Up to a point, anyway.
As of Monday, Democrats were pushing for a number of items: A further increase in unemployment benefits and more direct cash aid to American households. There weren't hard numbers yet, but those policies will need to be in the hundreds of billions. Democrats are also looking at about $250 billion to help out budgets for smaller city and town governments. These measures would all repeat aspects of the CARES Act, which sent a one-time payment of $1,200 to millions of Americans, added an additional $600 per week to unemployment benefits for the next four months (while opening unemployment benefits up to gig workers and independent contractors) and gave $130 billion to hospital systems as well as $150 billion for state and local budgets.
The thing is, the crisis has come so hard and fast that these moves, as admirable as they were, are already inadequate. Between March 14 and 28, almost 10 million Americans filed for jobless claims. State unemployment insurance systems have been overwhelmed, and former Federal Reserve Chair Janet Yellen reportedly told Pelosi the true unemployment rate (that government statistics just haven't caught up to yet) is likely 13 percent — higher than the Great Recession's peak of 10 percent. State and local budgets, which cannot deficit spend the way the federal government can, are already looking at massive spending cuts to offset the tax revenue losses. A one-time cash stipend will not be enough — it will need to be repeated several times — and America's unemployment insurance systems will need to provide more help longer as well. As for state and local governments, they spend about $3.7 trillion a year in total, so a $400 billion infusion between the two packages seems like the bare minimum.
Along with those repeats of the CARES Act, Democrats reportedly also want additions like mandated hazard pay for health workers and other Americans in essential employment, and strengthened workplace safety regulations to protect them. Though it's less obvious they'll be able to get those passed GOP opposition.
Speaking of the Republican Party, they'd like more money to go into the Paycheck Protection Program (PPP) — the $350 billion the CARES Act devoted to helping small businesses afford rent and bills and keep workers on payroll while the nation-wide quarantines have effectively turned off economic activity. It's a critical policy for making sure America's social fabric and civic life is still largely intact and able to function once the coronavirus pandemic has passed.
Unfortunately, the PPP got off to a very rocky start last week, and it seems pretty clear that $350 billion will not be nearly enough to do what the program set out to do. Republicans like Florida Sen. Marco Rubio have already called for another $200 billion to add to the pot. Though it's worth noting the PPP actually provides its aid via loans that will ultimately be forgiven, and the Federal Reserve has already said it will start buying that debt to get it off the books of the lending banks. That commitment should technically render additional money from Congress redundant — Republicans could simply call for legislative language making it clear the Fed is expected to backstop all lending done by the PPP, effectively removing any dollar cap on the aid.
If it's not already obvious, all of these are worthwhile and necessary proposals both sides should be comfortable with — though Lord knows it took some doing to get the GOP on board with the unemployment benefits boost and direct cash aid. This all should provide a pretty clear path to a deal on a fourth package, and both Pelosi and Senate Majority Leader Mitch McConnell (R-Ky.) sound like they think an agreement is well within reach.
Interestingly, Democrats in particular have evolved a lot in their requests for a fourth package over the last few weeks. Originally, they were talking about doing a big infrastructure bill to jumpstart the economy — something President Trump was enthusiastic about, but not Senate Republicans. It's a complicated question of details and timing: A massive infrastructure investment is a great idea once the pandemic is over and the economy needs to be driven back to full employment as fast as possible. But it isn't really viable while workers need to remain under quarantine. Yet Pelosi is also right that certain infrastructure needs — "clean water, more broadband, the rest of that" — arguably need to be fixed right now while the pandemic is ongoing.
The Democratic Party leadership apparently backed off the idea of an infrastructure push once the scale of the economic catastrophe became apparent. Which is to their credit, but also suggests they've been overly rosy about the nature of the crisis and the needed response. It also sounds like Pelosi retreated out of a desire to maintain bipartisan comity: "Right now, I think that we have a good model," she told reporters on Friday. "It was bipartisan, it was signed by the president."
That last part is unsettling. Pelosi's other ideas — hazard pay, worker safety regulations, water and broadband infrastructure — are all worthy things Democrats should be willing to fight for. (Food stamps could use another boost as well.) But an overeager desire for bipartisanship could wind up leaving them on the cutting room floor.
And this applies in spades to the question of vote-by-mail efforts: The coronavirus pandemic could wreak havoc on Americans' ability to participate in the November election if voting by mail isn't an option nationally, and several billion will be needed to make that happen. But Republican politicians are ferociously opposed, and more or less openly admit that they win more with lower voter turnout.
It's great that we may be able to pass another big aid package with relatively little partisan rancor. But that doesn't mean bipartisanship is a worthy goal for its own sake.
In the case of the vote-by-mail issue, the legitimacy of American democracy is genuinely at risk. And the only leverage that House Democrats have here is their willingness to hold up the fourth aid package until the GOP caves on these more politically touchy questions. It's admirable that Pelosi and the Democratic leadership are uncomfortable with mimicking Republican intransigence, but sometimes hardball tactics are entirely justified.