A $2 trillion rescue plan for the U.S. economy
The White House and both parties in Congress rushed to save a cratering American economy this week, coming to terms on the largest federal stimulus and rescue plan in U.S. history. The sprawling $2 trillion package is designed to counteract an economic contraction unprecedented in U.S. history, with projections of 3 million new unemployment claims this week alone—five times the number in the worst week of the Great Recession—and an economy shrinking by 30 percent. Senate Democrats and Republicans agreed on $1,200 direct payments to working- and-middle-class adults. The deal, subject to a House vote and President Trump’s approval, also includes $130 billion for hospitals, as well as $350 billion in loans for small businesses and $500 billion for loans to large companies. The Federal Reserve pledged to keep credit flowing to businesses otherwise facing bankruptcy or mass layoffs (see Business).
The rescue bill bars the Trump family’s businesses and those of top government officials or their families from receiving assistance. Democrats had fought vigorously against a proposal to leave loan decisions in the hands of Treasury Secretary Steven Mnuchin, with the identity of the recipients kept secret for six months. “We’re not here to create a slush fund for Donald Trump and his family,” said Sen. Elizabeth Warren (D-Mass.). For their part, as the deal moved to a vote in the House, Republicans were still haggling over a weekly $600 increase in unemployment benefits that Sen. Lindsey Graham (R.-S.C.) complained “pays you more not to work than if you were working.”
What the editorials said
Undoubtedly, the pandemic is a “public health crisis” that demands a robust federal response, said the Chicago Tribune. But “manage the fallout shouldn’t mean abandon self-control.” Lawmakers would have done better to focus on “vulnerable Americans” such as gig workers and small businesses that lack big companies’ access to credit. Large corporate bailouts and “the scattershot distribution of checks” to individual Americans aren’t going to help anyone but will assuredly present a hefty burden when the bill comes due. It’s hard to stomach Democrats’ carping about protecting the interests of workers over business during the negotiations, said The Wall Street Journal. Who do they think is going to re-employ everyone once the crisis passes? Or have they already decided that we’ll all spend “years on the dole” until the ship is righted? Republicans were right to champion the role of corporations in ensuring that Americans have jobs to return to once the all-clear finally sounds.
What the columnists said
“Three cheers for Congress,” said Jonathan Bernstein in Bloomberg.com. Both parties overcame a partisan divide and made compromises in the interest of saving the economy. Conventional wisdom says democracy moves slowly and is chaotic. In the clutch, democracy proved the conventional wisdom wrong.
This package, though, is probably not nearly enough, said Jim Tankersley in The New York Times. Despite Trump’s calls for the economy to reopen by Easter, public health experts say the best-case scenario is more like “a few months.” If so, Americans will need another round of “survival payments” to weather the storm.
To get to this deal, said Kaylee McGhee in the Washington Examiner, Senate Republicans fought off a raft of “ideological” add-ons from Democrats, like student loan forgiveness, early voting, and a postal service bailout. That’s a win for the GOP. But it’s also a “gamble” for the party, said Robert Costa and Philip Rucker in The Washington Post. After the Wall Street bank bailouts of the 2008 financial crisis, fury among the party’s rank-and-file spawned the Tea Party revolt and loss of seats by Republican centrists. That the president and many of his allies came to power on the back of that “grass-roots movement” makes this moment ironic.
If this enormous stimulus actually works, it “could alter politics for a generation,” said David Siders in Politico.com, “rewiring” how the U.S. approaches ambitious ideas. The ability of the two parties to come together on a massive federal response now could leave an opening for projects that were previously unthinkable: the Green New Deal, paid sick leave, or even a national guaranteed income. ■