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The Senate gave final legislative approval Wednesday afternoon to the $100 billion Families First Coronavirus Response Act and President Trump is expected to quickly sign it into law. But the cost of this bill pales in comparison to emergency economic assistance legislation that could cost $1 trillion or more.
The bill passed by the Senate Wednesday provides jobless benefits, sick leave, free coronavirus testing and food and medical assistance to people affected by the pandemic and business closures.
The legislation includes a provision for paid family and medical leave – a dream of Sen. Bernie Sanders, I-Vt. and Rep. Alexandria Ocasio-Cortez, D-N.Y. – that will undoubtedly hurt employees of small businesses operating on tight profit margins
The much larger $1 trillion economic assistance legislation being drafted by the Trump administration and congressional leaders would provide loans to business and direct payments to families to help ease the financial burdens imposed by closures and restrictions on business activity and travel caused by the coronavirus pandemic.
This pandemic is the third crisis I have lived through in Washington. Congress and presidents have always had the same reaction: spend enormous sums of taxpayer dollars to deal with the problem, adding to our already huge national debt that now exceeds $23 trillion. Where is this money going to come from? That important question always gets pushed aside.
No one should underestimate the health threat and economic damage of the coronavirus. I have elderly parents in Ohio and family members who work in the restaurant industry. But I also came to Washington to be part of the solution to our out-of-control spending problem.
We will get through coronavirus. But the debt and deficit will remain an existential threat to our nation. It is foolhardy to keep running up the national credit card without worrying about how to pay it off.
We need to make an important distinction between spending to fight the disease COVID-19 that is spread by the coronavirus and spending on economic assistance programs.
We can’t limit spending to help fight the spread of the coronavirus. This is, quite literally, a matter of life and death. I’m all for opening up the taps on emergency medical services, providing all the medical equipment and protective clothing needed, expanding testing, developing vaccines, supporting our elderly and getting hospitals more beds and supplies.
However, we can’t afford to write a blank check for spending on enormously costly economic assistance programs like sending thousands of dollars to every American. This becomes a contest between lawmakers and the White House seeking to outdo each other in adding program after program to express their concern for Americans impacted by the coronavirus pandemic. However well-intentioned, such huge deficit spending will wind up doing more harm than good to our economy in the long run.
Importantly, no one knows the extent of the pandemic. Will COVID-19 stay with us through the summer or follow normal flu patterns and become a much less serious problem as the weather warms? Will the pandemic then worsen again with the arrival of fall and winter? Even the experts aren’t sure.
So will the $1 trillion economic assistance bill be followed by $1 trillion more in a few months or weeks? And then more and more spending, virtually without limit?
Much like the Sept. 11, 2001 terrorist attacks and the Wall Street bailout in 2008, we don’t really understand the problem, but politicians instinctively have a need to “do something.” No stasis, constant movement, regardless of whether it's in the right or wrong direction.
We’ve all seen how these bills work. Congressional leadership orders spending legislation crafted in backrooms by a handful of people, and the resulting very lengthy bill is given to members without adequate time to review it and little or no opportunity to offer amendments. How soon will it be before Congress has to come back to the well for another economic assistance package before the first one proves not to work?
There’s no doubt the airlines will need support, but $50 billion seems like a convenient round number. And $50 billion is just a guess.
Will a stimulus package help increase consumption if people are stuck at home? At the moment, there are no clear answers to these questions.
Congress should stay in session, slow down, and debate smaller, more targeted bills to address the chronic needs. The $1 trillion cannon shot of a stimulus package might not even be aimed at the right problem and offer the right solutions. No one should make decisions under duress. Yes, we are in a time of uncertainty, but a $1 trillion relief package may be a massive overreaction and far too broad. Given that the economic problems we are facing are caused by the lack of consumption because many Americans are practicing social distancing, businesses need liquidity right now.
There are better ways to provide liquidity. One way to do that is to suspend the payroll tax. Another way to do it is to increase the Small Business Administration’s disaster loan limits to allow businesses to have access to cash until the COVID-19 threat has been mitigated.
The government is not going to negate all the inconvenience caused by the coronavirus. It’s important to keep this in perspective. The economy goes up and down. Wars and viral outbreaks have been part of our shared human experience throughout history.
The government can’t save us from all adversity, and it can only take incremental steps to improve our lives if we hold it accountable. Dramatically increasing $23 trillion national debt is not accountability.
What may be more dangerous is the fact that half of the United States population does not have $500 saved in the bank.
Scientists around the world are working to develop a vaccine and treatments for COVID-19 as quickly as possible. But nothing will make immunize us against a national debt that climbs to $24 trillion and beyond with no end in sight.