The coronavirus pandemic has forced us to recognize, once again and with fresh eyes, that the American project has been living paycheck to paycheck. If that money suddenly stops flowing, in particular, to small businesses, manufacturers, and the service and hospitality industries, the entire country would go into arrest. And as is the nature of capitalism, economic inequality would go on steroids.
Unfortunately, the very thing we’ve been told will help will likely only make things worse in the long term. The House of Representatives, controlled by Democrats, just passed the Senate’s $2 trillion relief bill, the largest such package in American history. However, we should not mistake ambition for competency, nor extravagance for generosity. Rather than push for a better bill and, yes, taking the risk of accelerating economic decline, House Speaker Nancy Pelosi settled on this bit of incremental progress. But at what price? This is legislation that is awesome in its inadequacy to meet the needs of the moment. Even as it jump-starts industry, the bill promises to exacerbate wealth gaps along racial lines while repeating mistakes that the nation should have learned from.
The legislation ignores quite a bit of American reality, old and new. The 2008 bank bailout gave a lot of money to very few people, relatively, when it was lower-income folks losing their jobs and homes. If low-wage workers don’t live in Washington, D.C., or one of the 23 states that increased their minimum wage last year, wage growth — thanks in part to successful union-busting efforts by Republicans — hasn’t kept pace with exploding salaries and stock profits of the top 1 percent. However, despite this coronavirus relief bill providing about $350 billion each for health care needs and for small businesses, large corporations and their shareholders will have the most security. And it repeats the key mistake of the 2008 bill: placing more money in the hands of the elite few rather than prioritizing the many Americans who are in most desperate need.
Trump is eager to sign a bill that gives Treasury Secretary Steven Mnuchin the keys to what is, ostensibly, a $500 billion fund to bail out big industries affected by the spread of the virus. Mnuchin casually dismissed this week’s record 3.3 million applications for unemployment benefits, announced the same day that the Dow Jones had its best day in 87 years, as “not relevant” because he presumes that “small businesses hopefully will be able to hire back a lot of those people” who were laid off. That is a lot of hoping and wishing for the guy who the bill gives sole control over that much money to invest in big industry, without supervision or accountability. As Zach Carter reported in his blistering assessment of the relief package, the Federal Reserve can leverage the $500 billion fund 10 times over, making its value someone around $4.5 trillion. This is what Democrats are rushing to pass in the House that they control.
Where does that leave workers in an economy that now promises to serve the needs of plutocrats over plebeians more than ever? The “better than nothing” adage may apply, as the bill is not without its short-term wins. Federal student-loan borrowers get six months of relief. The small business fund will help the industries in the most jeopardy, such as restaurants, though industry leaders are pushing for “business interruption coverage” that the relief package doesn’t include. Tens of millions could possibly be unemployed in the coming months, driving the rate into the double digits. Even though both Trump and Democratic proposals called for higher amounts, the maximum any American will get in an emergency payment is $1,200 for individuals and $2,4000 for families, which will be variable by income reported on individual or family returns for either 2018 or 2019. That means if someone who is unemployed hasn’t filed a return for the last two years, they must do so in order to have a shot at benefits — which can be costly in both time and possibly money, if a preparer is needed.
However, though the crumbs that this bill brushes down onto lower-income Americans may nourish some in the midst of this crisis, it won’t do so for long enough to withstand the potential effects of the pandemic. Regular unemployment benefits would be extended by 13 weeks to a maximum of 39 total, with those who are newly laid off being possibly eligible for double that. The benefit itself, now an average of only $372 per week, would have an additional $600 placed on top for up to four months. What this bill needed, urgently, was the kind of rent freezes and mortgage relief that we’ve seen proposed and even enacted in states like California.
The bill’s shortcomings also project a foolish optimism about America’s ability to mitigate the coronavirus pandemic. Were this new legislation to go into effect immediately, 13 weeks would help many Americans in need — but only until about July. By then, various reports project both “a deep recession” and for COVID-19 to have killed 81,000 Americans. New York Mayor Bill de Blasio joined Gov. Andrew Cuomo in slamming the bill, deeming its insufficient aid to the heavily stricken city and state “immoral.” Things could get even worse if Trump foolishly begins relaxing physical-distancing guidelines in the upcoming weeks, as he has indicated. His eagerness for an Easter deadline for our self-quarantines to end may ensure that many sick folks feeling pressure to go to work now may re-enter the workforce too soon, and the pandemic could metastasize even further.
As inadequate as this package is, Republicans wanted to make it worse. Several GOP senators threatened to hold it up because they thought the package overextended unemployment benefits. Another, Republican Tom Massie of Kentucky, hoped to delay passage by forcing the House to have a recorded, in-person vote for the bill, for a variety of reasons. And the administration seemed unable to stop itself from attacking the social safety net, even as the pandemic further revealed its weaknesses. Low-income workers, disproportionately black and Hispanic, are suffering from layoffs or the inability to work. However, despite the relief bill including $25 billion for nutrition assistance, Trump’s USDA wants to keep trying to cut about 700,000 people from food stamps. It plans to appeal a judge’s ruling last week that it would be “arbitrary and capricious” to move forward with the USDA’s plan to bar states from waiving the already arbitrary and capricious work requirement to receive the benefits.
But as heartless as the administration and his party have been, Democrats, with few exceptions, have been just as fainthearted. Rather than continuing to push for a stronger bill that sends the most benefits to the people who most urgently need them, or one that exerts more (or any) control over the beneficence that Washington extends to Wall Street, Pelosi and her cohorts were ready to back a bill that, one day soon, they should regret passing. Every crisis is an opportunity, and so far, Democrats have allowed Republicans to seize it.
There will be more rescue bills in the weeks and months ahead, and Democrats need to be ready. But for now, look forward to those crumbs, America. The plutocrats will still be eating gourmet.