The Senate's $2.2 Trillion Economic Lifeline
As more than three million file jobless claims, aid is needed perhaps more than ever.
A record-shattering 3.28 million Americans filed jobless claims this week, as the Great Coronavirus Shutdown has wreaked havoc on the U.S. economy. The previous record was 695,000 in October 1982, followed by the March 2009 mark of 665,000. Until now, the U.S. had experienced a record 113 straight months of job growth — some 22 million jobs were created over that stretch. That not only ended this month, it fell off a cliff.
“The economy isn’t an abstraction,” as Ben Shapiro so aptly put it. “It’s the real lives of hundreds of millions of American citizens.” And those real lives are being devastated by the viral shutdown — a shutdown for which we need an exit strategy. As Mark Alexander noted yesterday, “Clearly, formulating and implementing this exit strategy will be the most difficult and complex policy decision by any president in decades.”
That’s why Democrats finally got off their collective rear ends and stopped obstructing the Senate’s relief bill. Well, after extracting their pound of flesh anyway. The $2.2 trillion aid package — one-half of the entire federal budget — passed the upper chamber unanimously (96-0, minus four Republicans in quarantine) late Wednesday after several days of political wrangling led by Senate Minority Leader Chuck Schumer and House Speaker Nancy Pelosi. The House will hold a vote tomorrow morning at the earliest.
The provision millions of Americans likely care about most is nearly $300 billion for the direct payment of $1,200 to each adult earning less than $75,000 ($150,000 for married couples) in either 2019 (if a tax return has been filed) or 2018. There’s an additional $500 for each child under 17. The administration hopes to have this money distributed within three weeks.
Some other provisions include money for emergency medical supplies and a major infusion of liquidity to businesses that have been shuttered by government fiat. There’s $500 billion for large companies and another $380 billion for small businesses. That’s especially important for small businesses that are less able to withstand a month-long (or more) shutdown but that employ the vast majority of Americans. There’s specific aid for airlines, hotels, restaurants, farmers, railroads, the health industry, the U.S. Postal Service, and other industries. Given the widespread economic damage, this is to be expected.
Americans can suspend student-loan payments through September without accruing interest. More than 14% of Americans owe a collective $1.6 trillion in student loans, and the average amount per borrower is around $35,000.
Unemployment insurance greatly expanded. The Wall Street Journal explains that the package “includes a $600-a-week increase for the first four months, with the bonus payment available through July 31.” That’s good for Americans hit hard by a layoff, but a few Republicans worried that this means some number of them may now have an economic incentive not to return to work. They tried unsuccessfully to amend this.
Unfortunately, it’s a given with anything Congress does that there are a litany of bad policies in this monstrosity. Among them is one particularly expensive one: $175 billion for state budgets with no strings or oversight. That means the Democrat statists in New York, California, and Illinois, who’ve driven their state budgets into the ground, get an unmerited bailout at your grandchildren’s expense.
In fact, the federal bill itself reveals the elephant in the room: A nation already saddled with $23.5 trillion in debt isn’t exactly in a great position to be spending 10% of that again in one bill. Americans will be paying for this China-induced economic coma for generations.
As a final thought, where would we be right now had the Trump administration not done so much to shore up and strengthen the U.S. economy?