Trump and Congress finally have a good idea to prop up the economy, but they need to move WAY faster

Image
Treasury Secretary Steven Mnuchin, right, with President Donald Trump at a press briefing with the coronavirus task force at the White House on Tuesday. Evan Vucci/AP Images
  • There are a few plans floating around Washington for sending direct payments to Americans during the coronavirus pandemic. Finally, a good idea that could actually help people!
  • The problem is, everyone is moving too slowly. Treasury Secretary Mnuchin is talking about getting payments out April 30.
  • The holdup is that legislators want to means test the money to make sure the wealthy don’t get money they don’t need.
  • Normally that would be fine, but we don’t have time for that right now. People need to make rent April 1.
  • Visit Business Insider’s homepage for more stories.

Finally, Washington is embracing a good idea for how to help Americans and the economy during the coronavirus pandemic: Send everyone a check.

The problem is no one is talking about moving fast enough. The end of March is approaching, and Americans will have bills due April 1. Missing those will make coming back out of this economic crisis much more onerous when the novel coronavirus subsides.

The White House has a plan for direct payments as part of a roughly $US850 billion to $US1 trillion stimulus package. That plan reportedly includes $US1,000 payments to Americans at a combined cost of about $US250 billion.

While Treasury Secretary Steve Mnuchin said at a press conference on Tuesday that the White House wanted to get those checks out within two weeks, he later reportedly told Senate Republicans the government could get checks out by the end of April. The holdup, it seems, is that Mnuchin wants to means test the money to ensure only the people who need it get it.

Whatever the reason, his plan is just not good enough. It’s not fast enough, and if the pandemic persists, it may require him to go back to Congress and ask for more money. That takes up precious time no one has.

Senate Democrats, including Corey Booker from New Jersey, Michael Bennett from Colorado, and Sherrod Brown of Ohio, have another plan. It’s more generous, sending $US2,000 to all Americans in the first wave. Then payments of $US1,500 and $US1,000 if the pandemic persists. This is more like it.

But the Senate Democrats’ would also means test all the payments – meaning they would phase out for higher incomes. This slows down administration and adding paperwork or technical hurdles could result in some Americans who should get the payments falling through the cracks. Politicians need to recognise that we don’t have time to dither in getting Americans money. They need cash now. This means testing has to go, at least for the first payment.

Everyone is going to need money anyway – big business, small business, community organisations and individual families. We shouldn’t *discriminate.

On Tuesday I wrote about what coronavirus did to China’s economy, and the big takeaway is the economy has to keep going in any way, shape or form during extreme social distancing. That means allowing families and companies to make debt payments, and pay for anything they need while people aren’t working.

Once the economy is turned back on there’s going to be a demand crisis. That’s what China is experiencing now. If we keep money in people’s pockets we’ll start that off on much better footing. And when Americans are ready to engage in human interaction, they will be able to put money right back into the economy again.

If Republicans and Democrats come together to send Americans direct payments, I will believe that we’ve perhaps learned something from the financial crisis. And it will give me some hope that in the face of desperate times, Republicans can let go of their ideologically driven impulses for the greater, immediate good.

I’m not putting any bets on it though.

*I do think we should attach some strings to bailouts of some industries. The airline industry has been making travel miserable for customers while blowing money on expensive stock buybacks for years now. They should have to make some concessions to get cash.)