- The GOP is set to open negotiations for another coronavirus aid package with a bill based on the fantasy that the coronavirus is going away soon.
- It’s not. And without legislation that takes a long view of this crisis, the US economy will still be grappling with significant uncertainty.
- The GOP reportedly plans to scale down the extra $US600 in unemployment benefits. Its plan would not give cash-starved states relief. It would not do anything for frontline workers.
- A bill may, however, include a tax cut that largely benefits the wealthy, so at least the GOP is staying true to its brand.
- This is an opinion column. The thoughts expressed are those of the author.
- Visit Business Insider’s homepage for more stories.
If its latest attempt at coronavirus aid legislation is any indication (and it is), the GOP is living in a fantasy world.
It’s a fantasy world where the country isn’t seeing record coronavirus case numbers nearly every day, hobbling economic activity in huge states like Texas and California. A world where states no longer desperately need more money to keep services going and people employed. A world where more than 1 million Americans every week are not applying for unemployment benefits and record numbers of people are not late on mortgage payments.
In summation, it’s a nice world, but it’s not the one we’re living in. The GOP’s next aid package is expected to come in at about $US1 trillion total, way short of the $US3 trillion proposed by Democrats and the roughly $US2 trillion included in the previous relief bill, the CARES Act.
The GOP plan would allocate money to states for reopening schools; there’s been no mention of extra benefits for frontline workers. And Republicans want to make the $US600 weekly boost to unemployment benefits that has been keeping our economy together for months much less generous – if they keep it at all.
Yes, some Americans could expect a check in the mail (though potentially a smaller one than the $US1,200 check they received months ago), and there would be increased funding for coronavirus testing. But aside from that, the only real winners here are rich Americans who would benefit most from a payroll-tax cut and employers who would no longer have to worry about liability if they open their businesses too early and get their employees sick.
The US is logging about 65,000 coronavirus cases a day, and this bill would be less generous than the bill the GOP put forward in March when the country was logging about 12,000 a day. It’s as if Senate Majority Leader Mitch McConnell believes the coronavirus pandemic is over. But if the states that are on the verge of shutting down are any indication, our trial is still in its beginnings.
If you, like me, occasionally find yourself watching the captains of American business on television waxing philosophical about the economy, you’ll know they often use the word “uncertainty” to describe unstable political or economic conditions.
Usually this word is used to complain about potential tax increases or something equally banal compared with our current situation. But there is no uncertainty like the uncertainty the coronavirus brings – the kind of uncertainty that means one day a major economic centre could be open and the next it could be shut down.
The GOP bill would do nothing to mitigate this huge problem for our economy. In fact, it would just inject more uncertainty into the picture.
If you’re part of a family in, say, California who has been depending on that extra $US600 in an unemployment check to keep things together, you’re about to find yourself in a dire situation. Without more funding from the federal government, your locked-down state can’t help you either – not by offering you a new job or through public services.
This is why Democratic proposals that tie aid to the unemployment rate would be so much more beneficial to the economy. They would ensure that Americans are kept afloat for as long as this crisis persists and give people the type of certainty that could stabilise the economy. People wouldn’t have to worry about paying their bills and feeding their families on top of worrying about social distancing and keeping vulnerable people safe.
Instead, the only people who would find relief in the GOP’s bill are employers, especially those big enough to feel the effects of a payroll tax cut. It would also give them a pool of desperate workers looking for jobs and make sure they wouldn’t be liable for getting them sick, since Republicans plan to include measures to prevent employees who get COVID-19 on the job from suing their employer.
If this sounds ludicrous to you, that’s because it is. If this sounds like an abdication of responsibility, that’s because it is. For the economy to hum along smoothly for the duration of this crisis – for people to pay their bills and keep spending money normally – Americans need to be certain that their government has their back. Instead, the GOP plan so far is a slap in the face.
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