Big bucks for the coronavirus crisis
Reader feedback at end
When we went to press last week, a massive economic relief bill was being drafted in response to the coronavirus crisis. Less than a week later, this legislation (dubbed the CARES Act) had been passed by the Senate (96-0), passed by the House (voice vote), and signed into law. Remarks by the president on signing H.R. 748, 3/27/20.
This is a very important day. I’ll sign the single-biggest economic relief package in American history and, I must say, or any other package, by the way. It’s twice as large as any relief ever signed. It’s $2.2 billion, but it actually goes up to 6.2 — potentially — billion dollars — trillion dollars. So you’re talking about 6.2 trillion-dollar bill. Nothing like that. And this will deliver urgently needed relief to our nation’s families, workers, and businesses. And that’s what this is all about.
So here was evidence that our nation’s leaders can unify in times of crisis? And maybe, just maybe, SAFE has been overstating the deficiencies of the US political system (notably in our 3/2/20 and 3/9/20 blog entries)?
Well, no! If anything, recent developments have underscored the need for an overhaul of the US political system. Let’s take a closer look.
I. Substance – There doesn’t seem to be an updated summary of H.R. 748 available, but here’s the legislative history and text for reference.
If anyone has priced out the bill on an element-by-element basis, we haven’t seen their analysis. In fact, one of the reports stated that $2.2 trillion is merely an estimate of what the outlays will be.
It does seem fair to say, however, that the package includes something for just about everyone. See, e.g., White House and Senate finally reach agreement on unprecedented $2 trillion coronavirus bill, westernjournal.com, 3/25/20.
•Direct payments to citizens: $1,200 per adult, $500 per child, phased out for those with annual income of over $75K ($150K for couples); IRS will be responsible for implementation; it will predictably take months to ensure that all eligible persons get paid without duplicate payments;
•$500B for guaranteed, subsidized loans to larger industries (e.g., airlines, hotels and cruise lines), which would serve as Treasury Department’s equity for approximately ten times that amount of Federal Reserve liquidity loans;
•$600 per week supplement to unemployment benefits that states would normally pay to furloughed workers;
•$367B for small businesses to keep meeting payroll while workers are forced to stay home, whether due to illness or shutdown orders;
•$50B for employee retention tax credit (overlaps previous item?);
•”A huge cash infusion" for hospitals;
•”Tens of billions of dollars for additional relief to be delivered through the Federal Emergency Management Commission.”
As an inducement to support the bill, Democrats demanded a raft of provisions with little obvious connection to fighting the pandemic or providing emergency economic relief. Dems using COVID to change America, Ben Marquis, westernjournal.com, 3/23/20.
Rural internet coverage - infrastructure spending - expanded Social Security benefits – national requirements to allow voting by mail and same day registration – emission reduction requirements for airplanes – conditions for “bailouts” of large corporations, such as instituting a $15 minimum wage - unionized labor demands, e.g., bailout of multiemployer pension plans – enhanced funding for Planned Parenthood.
Most of these demands were dropped in the face of strong resistance, but it was clearly indicated that they would be renewed if the pandemic lingered and there was a second round of economic relief. Little of Pelosi’s wish list [survived], GianCarlo Canaparo, dailysignal.com, 3/27/20.
Even before this relief package becomes law, politicians on both sides of the aisle were already calling for another one to follow, so expect Pelosi and the progressives to try again.
II. Rhetoric – The political conversation about the pandemic and how to react to it has been downright ugly at times.
Questioning the handling of the pandemic is fair game, but critics also worked tirelessly to discredit the president motives and imply that he didn’t know what he was talking about. Let’s call it Trumpvirus; If you’re feeling awful, you know who to blame, Gail Collins, New York Times, 2/26/20.
“I think the financial markets are very upset when they look at the Democrat candidates standing on that stage making fools out of themselves,” Trump told reporters.
Plus that virus thing is … not necessarily a big deal. What really “shocked” him, Trump said, was his discovery that “the flu in our country kills 25,000 people to 69,000 people a year.”
So the problems are the Democrats and the flu. The answers are Mike Pence and … reminding the public once again that Nancy Pelosi’s district has a big homeless problem.
Suggestions that the government should be concerned with preserving the US economy as well as combatting the pandemic seemed reasonable to conservatives, but were attacked as callous or misinformed. The truth isn’t exciting enough for Trump’s critics, Hugo Gurdon, Washington Examiner, 3/25/20.
It is a shabby pretense to argue or imply that the economy can or should be shuttered indefinitely. Checking the pandemic and saving the nation and individuals from financial ruin are both massively important goals. Mentioning and planning for the latter is not tantamount to dismissing the former.
Drafting of the CARES Act began with several days of preliminary work by Republican senators, followed by bipartisan efforts to craft a version that could be constructively debated on the Senate floor. Senate Majority Leader Mitch McConnell was planning a procedural vote at 3:00 PM on Sunday afternoon to get the ball rolling.
This vote was postponed, however, after a rash of Democratic objections surfaced and House Democrats announced they were writing their own bill. The normally unflappable McConnell was “visibly angry” about the delay. Democrats block advancement of critical economic relief package, Susan Ferrechio, Washington Examiner, 3/22/20.
We'll have this ... vote again at some point of my choosing, and hopefully, some adults will show up on the other side of the room and understand the gravity of the situation and the need to act before the markets go down further and the American people become even more depressed about our lack of ability to come together under the most extraordinary of circumstances.
The key players in the ensuing negotiations were Treasury Secretary Steven Mnuchin and Senate Minority Leader Chuck Schumer. Despite many suggestions that Democrats had overplayed their hand, matters continued to move slowly. The Pelosi-Schumer coronavirus contagion, Wall Street Journal, 3/23/20.
Democrats are trying to jam Mr. McConnell and President Trump to accept in a crisis what the left couldn’t pass in normal times. By our deadline Tuesday, Mr. Schumer had still refused to compromise. If Democrats refuse, they deserve to be held responsible for the damage to markets and the economy from putting partisanship above the national interest.
An understanding was reached in the early morning hours on Wednesday (March 25). White House and Senate finally reach agreement, op. cit.
The Senate vote (96-0) took place later that day, followed by House approval and the president’s signature on Friday (March 27).
Although her involvement had accomplished little other than to delay enactment of the CARES Act, Speaker Pelosi bragged on Twitter that she had succeeded in turning the Senate Republican’s bill “upside down.” Little of Pelosi’s wish list [survived], op. cit.
Once the bill had been enacted, moreover, Pelosi quickly shifted to downplaying it. As Congress passes historic relief bill, Pelosi already undermining its importance, westernjournal.com, 3/28/20.
“The legislation that we passed today is a very big down payment, but we have much more to do,” the California Democrat told MSNBC’s Rachel Madow Friday. “When they talk about this as $2 trillion and all that it does for America’s workers and families, it’s the least we could do. And we have much more to do.”
III. An intriguing query – We previously speculated that divided government is fostering partisan gridlock, which in turn is one of the causes for institutional decline of Congress and Executive Branch overreach. Impeachment push is symptom of underlying problems, Part 4, 12/2/19.
This isn’t how we saw things when Republicans regained control of the House of Representatives in 2011, during the hey-day of the Tea Party movement, but subsequent developments led to second thoughts.
House Republicans lost much of their conservative fervor over the ensuing six years, and most of the conservative legislation they did pass was blocked in the Senate (until 2015) or vetoed. Meanwhile, President Obama continued to pursue his agenda through administrative action (“I’ve got a pen and a phone.”) So there wasn’t an opening for conservative legislation until 2017, when Republicans had control of both houses of Congress and the White House.
Divided government resumed in 2019, with Democrats regaining control of the House, and this time it was even murkier what the public had in mind. The very notion that voters cast their ballots based on the anticipated policies of the candidates should be viewed with caution, because election results often suggest otherwise. Democracy for realists, Christopher Achen & Larry Bartels, Princeton University Press, 2016.
Most people lack definite ideas about government policy, according to numerous studies, and are not well informed about what is actually going on. They tend to choose parties/candidates that are welcoming to the groups they identify with, and then adopt/rationalize/support the policy positions that said parties/candidates happen to be espousing, rather than searching out parties/candidates whose views come closest to their own policy preferences.
Perhaps voters wanted to encourage the president to tone down his “tweets” and public statements, as suggested by his reported slippage with suburban women, but if so they didn’t get the results they wanted and inflicted a lot of collateral damage to boot.
The current session of Congress has been one of the most dismal we can remember. Nonstop House investigations – botched impeachment process, motivated by political payback – continuing failure to address the fiscal problem, stop illegal immigration, fix government healthcare programs, etc. – and now sloppy handling of the coronavirus crisis with the only notable congressional contribution being to throw money at the problem.
IV. Path forward – Work is continuing on SAFE proposals for overhauling the US government in an effort to improve its effectiveness. Look for highlights of the draft plan in the SAFE newsletter, which will be mailed tomorrow and also posted online. Browser path: Secure America’s Future Economy – Administrative – Newsletters – 97. Feedback would be greatly appreciated; please direct it to email@example.com.
Some may see our plan as a hopeless undertaking, but maybe not. While things often go worse than expected, the reverse is also possible. Here’s an example that most people didn’t see coming (your faithful scribe included). Nervous? Nope, Patrick Mahomes predicted the Chiefs' Super Bowl comeback, Dan Wetzel, yahoo.com, 2/3/20.
The Chiefs were getting the ball back on their own 17, with less than nine minutes to play, trailing by double digits and not having scored a point in the last 33 minutes of game time. If there was sagging confidence or growing nerves, their quarterback didn’t show it. Instead Patrick Mahomes gathered his offense and offered up a prediction. “They are going to talk about this,” he said, “for a long time.”
Bam, Mahomes and the Chiefs delivered 21 unanswered points to capture the franchise’s first Super Bowl in half a century.
Moral: Never underestimate the power of positive thinking!
Our cover note for this week’s blog entry raised an additional topic, namely the productive use of one’s time while grounded by the pandemic. “Innovate from your couch,” Andy Kessler, Wall Street Journal, 3/29/20.
By now you may have read about how Isaac Newton, while sheltering in place during the 1665 closure of the University of Cambridge for the bubonic plague, used his free time to discover gravity and invent calculus And how during the closing of London theaters due to plague in 1606, William Shakespeare had nothing better to do and wrote “King Lear” and “Macbeth.” Those guys didn’t even have Wi-Fi. You do, plus extra time. Be productive.
“This week’s entry ends,” we added, “by noting that the upcoming SAFE newsletter will outline a plan (working away from ideas suggested in two recent blog entries) for making the government function better than it has in recent years. That’s a project deserving attention, don’t you think?”
Several readers responded to this topic, as follows:
#Hope that all of you are well – I can see that you have been productive! – Family connection
#While "sheltering in place," I'm working on a formula to convert government baloney into something useful. I'll let you know when I've got it. – Retired judge
#I planted my foundation beds, tilled a 500 square foot garden 4 times, built a 120 square foot paver patio (with help), and reseeded my one acre lawn All while taking care of my wife, the dogs, and sundry household chores. I feel great not thinking about much of anything. I plan to do more of it. – SAFE director