Our country is suffering through the worst health crisis since the 1918 Spanish flu pandemic, and the worst economic crisis since the 1929 crash and subsequent Great Depression. Under a federal government emergency program dubbed Warp Speed, scientists are offering hope that promising vaccines will beat back the coronavirus over the next year. In the meantime, the economic damage America has suffered needs a similar major ongoing commitment from Washington.
Much has already been done to help keep the economy functioning during the past few months of lockdown. Congress has enacted over $3 trillion in support, including substantial help for both workers and businesses.
The Payroll Protection Program provided major grants and loans to small businesses to keep them afloat and able to retain workers. Yet even with this help, 40 million Americans are out of work. The jobless are being helped with a $600-a-week federal supplement in addition to state unemployment benefits, but this program will expire in two months.
The economic situation shows no sign of getting better soon. White House economic advisers project that unemployment could top 20 percent before the economy begins to revive. And the chairman of the Federal Reserve has pointedly noted that even though the Fed has already pumped $2 trillion into the financial system, “It may well be that the Fed has to do more,” Jerome Powell told “60 Minutes.” “It may be that Congress has to do more . . . [to] help businesses avoid . . . insolvencies and . . . do the same for individuals — keep workers in their homes, keep them paying their bills. Keep families solvent.”
That’s very important advice from the world’s most powerful banker. Congress and the White House should take it seriously and act on it. The key to achieving another round of federal stimulus relief will be a willingness of all parties to put aside political differences to deliver meaningful help to the country.
That means the Democratic leadership of the House of Representatives should drop its insistence on loading up the next relief bill with every item on the liberal wish list. The rescue package should focus on continued funding of research to defeat the coronavirus and support for a strong economic recovery.
President Trump and the Republican leadership of the Senate have signaled their support for additional federal spending during this extraordinary crisis. Yes, the deficit and the national debt will climb, but failing to resuscitate our economy could have even more dire economic consequences.
The economy right now is like a Covid-19 intensive care patient hanging on life support. This is no time to argue about how much more effort should be made to save the patient. Washington should not get sidelined by political arguments.
Here’s a prescription for dealing with the crisis:
• Authorize generous spending on speeding up the development of a vaccine and a way to deliver it to every American as soon as it’s ready.
• Provide another round of direct $1,200 stimulus checks to individuals and their dependents to help families pay mortgages and rents and put food on their tables. Trump has indicated that he’s open to this proposal. It’s worth the extra cost. Cash in the hands of desperate families is key to saving many from destitution.
• Renew and improve the Payroll Protection Program with additional funding and key reforms to its operation. Small businesses, especially, need more flexibility on how the grants they receive can be used. Keeping employees on the payroll won’t protect their jobs in the long haul if businesses are forced to close because they can’t meet other operating costs.
• Along with reforming the PPP, convert the current $600 additional federal unemployment insurance supplement into an employment supplement. Instead of paying employees to stay home from their jobs, let’s pay them a “job bonus” to get back to work.
• Provide substantial assistance to states and localities to help with the extraordinary costs imposed by the pandemic and to help them cover their operating costs. State and local tax revenues have dropped drastically since the pandemic began in every state. Helping them to keep providing critical services is not only reasonable, it’s necessary. That doesn’t mean writing a blank check to every state.
• Finally, finally come to agreement on a national infrastructure program, putting jobless people to work rebuilding America.
These are extraordinary times, calling for extraordinary measures. Washington must step up to the challenge, now.
Al D’Amato, a former U.S. senator from New York, is the founder of Park Strategies LLC, a public policy and business development firm. Comments about this column? ADAmato@liherald.com.