Senate Republicans Propose Budget Stimulus Bill
It just got a lot easier to understand how far apart the opposing stimulus views of the two parties are. Democrats want $3 trillion, while Republicans only want to spend a trillion.
The first time around, back when the economy was placed in quarantine, it wasn’t so easy to get the Democrats and Republicans to agree on a bailout. The only real reason why this got done was because not doing it was so terrible, and in the ensuing arm wrestle, the Republicans had to cave into the Democrats bloating up the bill so much, with the country being held hostage.
We will see which side ends up caving this time, but the story behind this has changed notably. While some of the provisions of the original $2 trillion CARES Act are about to expire at the end of the month, like the additional payout that people on unemployment are getting that has them making more money staying home than returning to their jobs, things are mostly back open now.
We are certainly not out of the woods here, and it will take quite a while to repair the damage that this has all caused to our economy, one in great health before this but now in the hospital, but there’s simply much less at stake now, much less to cause ransoms of two trillion to be even seriously considered.
The trillion-dollar proposal by Senate Republicans is by no means chump change, and this in itself is the total amount of today’s annual deficits in years where the economy is not under siege. We’ve had a few of these years spent already in 2020, and adding another one is not exactly a small burden upon us.
We are mortgaging our children’s future already, to an alarming degree, and we’ve already gone crazy with this thus far. A trillion dollars is a lot of money. An extra two trillion is three times as bad. We clearly have had a need to try to flatten the economic curve more, and while we may question the wisdom of choosing to harm ourselves as much as we have, the mess does still have to be cleaned up.
This always needs to be subject to some sort of cost benefit analysis, not necessarily working things out in detail but at least have higher level oversight of this that seeks to make sense of what we do. We need to at least be mindful of the costs involved, and the first and most important step in the process is to realize that these things do create real debt with real consequences, instead of ignoring these things and end up in a whole lot more trouble than we should have been.
There are two sides to this blade, the economic damage from the lockdown, and the fiscal damage from the economic response. At the very least, our objectives in trying to fix things need to be aligned with present needs and not be sought to be used to serve other political agendas, such as wanting to use this to promote things like “social justice” by paying people even more than they earn at their jobs which are waiting for them if they would only come back, to both elevate their wages and keep them out of the workforce at a time where unemployment is still disturbingly high.
This also needs to not be about other agendas like immigration reform, or anything else on the political wish list of politicians who wish to use the need for helping people who may not have enough to eat as leverage to coerce the other side to meet these other demands. This also needs to not be about things like indemnifying states from fiscal irresponsibility by burdening the country as a whole when they bite off more than they can chew, like kids coming to parents when they mess up.
The fact that 70% of those who are receiving these federally funded unemployment benefits that the CARES Act conveyed are earning more from this than they normally make at their jobs is simply ridiculous. Perhaps the Democrats believe that everyone should make at least $600 per week, but letting them make that much without even needing to work goes too far and shows how much we have actually lost our mind over this, but you can’t tell when you’ve lost yours.
The goal of this bill is to provide stimulus, not make fiscal reparations, and not surprisingly, these reparations have been left out of the Senate bill, part of the extra $2 trillion that the House has included in their version. Debt has been bloated at both the federal and state level, and especially at the federal level since they have been footing the bill for most of this, and the constitution splits this up explicitly to allow states more power in administrating these things.
The federal government does have the power to help out with these things but this is not anything that pertains to the purpose or need of this or any other stimulus bill, and like the idea of paying people $600 a week of federally funded welfare payments, anything in excess of the purpose can and needs to be dealt separately, and not be used as a means of blackmail to hold up intervention that actually is on purpose.
Secretary of Labor Eugene Scalia, in an interview on Tuesday, stepped up and showed the hand of the administration on these issues, where he still sees a need for us to do more but also recognizes how far we have come since March, where the response now needs to be more measured. The proposed Senate bill does provide this additional help, in this measured way, and the tables have indeed turned where the Republicans are dealing more from a position of strength this time, where the country does not have a gun to its head like it did then, due to this progress.
The goal here isn’t to restore everyone to the point where the impacts of the economic downturn can be equalized, as we would seek in a lawsuit, where there was a contract in place that was breached and the goal of justice is to compensate parties for their losses, this is instead about looking to reasonably flatten the economic curve to a level of tolerable pain. It just isn’t possible to fix it all but to provide a reasonable amount of help, with the goal at the federal level to balance the costs to future taxpayers with the needs of current ones, within their means.
Keeping These Bills On Purpose is the Biggest Challenge
Unemployment benefits are completely given over to states to manage, and this isn’t even an area that the federal government has any interest in, and this unemployment welfare money that they have been dishing out has only been necessary due to the limited capacity of unemployment insurance schemes to bear the tremendous weight that shutting down their economies has laid on their doorsteps.
People have paid into this insurance and it serves its purpose to manage the normal swings in unemployment that they see, but when states themselves create it, this does convey an additional responsibly upon government as a whole, and if they can’t manage it, using federal funds to substitute for this and to allow unemployment benefits paid out on the scale that is needed is not unreasonable and perhaps even wise, even though it may only be wise due to its need to rectify unwise choices that have been made.
There does come a point though that this need subsides, when economies are reopened and the solution serves another purpose, to not compensate them for losing their jobs but to instead serve to incentivize them to remain unemployed.
On top of this, the intent here, at best, should be to replace their lost wages, at a time where they may not have an opportunity to replace them if the state government refuses to let them go back to work. It should never have been to have people profit from this crisis by being paid even more than they make, where they receive not compensation but a windfall out of the deal.
Neither the administration nor Senate Republicans are willing to continue this ridiculousness. The absence of a bill providing additional federal aid for unemployment benefits would leave states to fend for themselves, to reach into their own pockets and borrow against their own future instead of expecting the federal government, who normally have no part in any of this and have been helping out of the goodness of their hearts, to continue this nonsense, it is not that the Republicans want them going cold turkey.
The Senate bill allows for funding to continue for this to the tune of $200 per week per claimant through September, provided that their proposed cap of 70% of the wages that these unemployment benefits are replacing is respected, with a cap of $500 on the state’s portion of these benefits.
They are also ready to roll out another $1,200 stimulus check to all taxpayers, plus extra for dependents, like the last one. The $500 per child will also extend to adult dependents this time. Both of these ideas serve the purpose of the bill, to stimulate the economy as well as to cushion the blow with those who have been harmed by the actions of their states, as unfortunate as they may have been, seeking to turn a country so famous for its freedoms into authoritarian dictatorships, which continues on to some degree today.
Only one state refused to denigrate their use of legal power this way, South Dakota, which has always been regarded as a bastion of the principles that this country was founded upon and have allowed it to flourish as much as it has, managed to walk the walk on an issue that had everyone else look away from this to some degree anyway.
In spite of this, the effect of the pandemic upon the people of South Dakota has been unremarkable, and even muted. When we look at the ravages elsewhere, particularly in the Democratic run big states where the death toll has been much worse, it should be clear to anyone what the difference has been, and it’s that South Dakota chose to protect the vulnerable more while states like New York and others locked everyone down but sent massive numbers of infected people to nursing homes, a mistake which cost many lives.
The death rate in New York thus far is more than ten times higher than South Dakota’s, and at the very least, this should give us pause when we look back and assess how successful lockdowns have actually been, what we actually got from costing ourselves all these trillions, what we still need to address with this proposed second stimulus bill.
The Democrats don’t want to cut these unemployment benefits at all, and the Republicans are insisting on it, so this issue alone could serve to be contentious enough to make a deal very difficult, if not impossible. There does not seem to be much if any wiggle room on this issue on the Senate side, and their bill could actually be close to a take it or leave it proposal. The not rewarding people for being out of work or provide benefits so close to their original wages that they may choose to refuse to return to work is definitely important to the Republicans, and the two sides remain far apart on this one.
The extra stimulus money surely won’t be an issue, but to show how distant the two sides are, the Democrats are even taking issue with the Republicans’ plan to provide tax deductions for people eating in restaurants. This is designed to help restaurant businesses survive, but this is upsetting some on the other side of the aisle who see this as benefiting those better off and want the tax money collected given to the poor instead.
The Republicans are seeking to remain true to the purpose of this bill, while the Democrats clearly have other objectives, and seem to be more interested in frying their own fish, increasing welfare payments, helping out illegal immigrants, bailing out their prodigal friends who run Democrat states, and other issues that have no real logical connection to a stimulus bill and should be vetted in separate bills that actually are addressed to these particular issues.
It’s Hard to Reason with Madness
Their wish list includes a lot of things that a Republican Senate would just give the thumbs down on though, and they did manage to twist enough arms the last time out to get some of these things included, but this time around they are the more eager of the two parties to get something done and that places them more in a position of weakness where the Republicans aren’t too worried and can wait out their opponent if needed.
The new bill also includes some new payroll protection loans, this time targeted to those who really need it and not having it become the free for all that it was last time, where all sorts of businesses helped themselves to these loans whether they needed them or not. This time, businesses have to show that their revenues are down 50% or more from last year to qualify.
There are also legal immunity provisions in this bill, which seeks to indemnify schools and businesses from lawsuits “deemed unwarranted” that result from their being open. Senate majority leader Mitch McConnell has clearly stated that the inclusion of this provision in the bill is non-negotiable, although the Democrats may still object as they presumably would prefer that those who commit such evil deeds as letting people voluntary choose these things pay dearly for this.
There are a few other goodies thrown in, such as continuing the deferral on student loans past the current deadline of Oct 1, as well as making it easier for students to manage repayments. There’s also $16 billion for COVID testing, $25 billion set aside for hospitals, and $15 billion to help people with child care expenses.
The two parties are so apart right now that it will take some real doing to get a deal done, as this is far from just meeting halfway. If we do get this bill passed, there simply isn’t much room for negotiation on these issues as well as with all the other $2 trillion that the Democrats want packed in. This will not be a pork party and the Republicans may be willing to throw in a little but nothing even close to what is being asked.
The stock market surely would rally if we do get a second bill passed, or even if we start getting pretty close, but hasn’t been too bothered by the gridlock that we are in with this. Given that the Democrats are trying to blame the Republicans for the violence in not only Portland but throughout the country, where the very threat of federal help is supposed to be inciting it, and federal officers trying to protect federal property are somehow to blame when they are attacked by mobs, with the rioters held blameless, we can’t get our hopes up too much when the other side is on a mission to abandon their senses this much, with this much success.
This is the biggest reason why we have been so skeptical about a second stimulus bill, and so afraid if this party does get to rule Washington completely as they might soon. Watching the vicious attack that Attorney General Barr was just subject to, as how dare he not allow rioters to burn down federal courthouses unopposed, how dare he have his people try to intervene even though they are under a legal duty to do so, tells us how much these people have actually lost their minds, where reasonable negotiation seems so completely beyond this party’s aptitude.
If a bill does not get passed, there surely will be a lot of finger pointing, and this will surely be all the Republicans’ fault, just like the Portland riots. They even went as far as to accuse Barr of causing the violence that his agents have been subject to, including several officers probably losing their sight from this, and suggesting that this is part of a conspiracy to discredit Democrats. They need no help from anyone though.
Barr is also now considered a murderer by this party, as they are blaming him for people dying of COVID, as if he has any say in these things. No one is sure of even the logical connection here, but that only matters if logic is required. This is like accusing the police of causing violence when they get injured trying to stop someone’s house from being burned down by arsonists, and more, being also accused of murdering one of the perpetrator’s kids that died of natural causes which the police had no hand in. This is even beyond what we would expect from the clinically insane off their meds.
We would hope that the majority of Americans would fight back all the media brainwashing that they have been subject to and at least be able to see through something this absurd, but sadly, this may only be a dream. Having them know where to point the fingers of blame if the Democrats hunker down and reject this proposal when it means that people will suffer is a much loftier dream though.
The worst thing about all this is that the Democrats may refuse to do anything in order to score political points, and the worst part isn’t just their doing this, it is the fact that this will work, using the power of stupidity to force a political coup and seeing it work so marvelously.
When a major political party so vehemently defends the supposed right for people to commit violent crimes unopposed, wholeheartedly supporting them while wanting to impeach the Attorney General of the United States over his trying to interfere, this is not a right that the Founding Fathers had in mind, to say the least. Welcome to the New American Revolutionary War, where the American people are the enemy this time around but do not even have the presence of mind to realize it.
Editor, MarketReview.com
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