After over a week of typical bluster and theatrics through the Christmas holiday, and allowing unemployment benefits to lapse for millions of Americans during that time, President Trump finally caved at the 11th hour and signed the second pandemic relief bill into law. So, what’s in the bill, and what are the implications of it?
Here are some highlights of what’s actually in the bill:
Individual payments of $600 to adults who earn up to $75K/year and dependent children based on 2019 earnings. Heads of households who earn up to $112,500 and a couple who make up to $150,000 a year will receive twice that amount. The benefit declines for those who earned more than those income levels. It cuts off entirely for individuals who earned more than $99,000.
Extension of Unemployment Benefits
The agreement would bring back enhanced federal jobless benefits of up to $300 per week for 11 weeks, through March 14th, 20201. This amount is half the previous amount ($600) from the original CARES Act passed in early April.
Small Business Aid
The agreement allocates $285MM for small businesses under the original PPP (Payroll Protection Program) that have continued to be affected by the pandemic. The bill appears to call for stricter terms of eligibility for this aid. Furthermore, loans are capped at $2 million are available only to borrowers with fewer than 300 employees that experienced at least a 25 percent drop in sales from a year earlier in at least one quarter. The agreement also sets aside $12 billion specifically for minority-owned businesses.
The bill also provides $15 billion to support a broad category of entertainment-related businesses, including small theaters and live music venues, which have been hit extremely hard during the entire pandemic.
Protections for Renters
The bill would also protect tenants struggling to pay rent by extending a moratorium on evictions another month, through Jan. 31th. The Department of Housing and Urban Development issued a moratorium that also protects homeowners against foreclosures on home mortgages and runs until Feb. 28th.
The bill also allocates $25 billion in rental assistance. This move could take some pressure off some state and local housing officials who anticipated forfeiting some of the aid allocated from the CARES Act because they were unable to distribute it all ahead of a Dec. 30 deadline.
The bill also provides for vaccines and nursing homes, support for climate measures, a ban on surprise medical bills, expanded SNAP by 15% for 6 months, and funding for broadband infrastructure.
How this bill will affect Americans and the economy over the next several months is up for debate. What should have been clear to everyone even as far ago as this past summer was that the CARES act was going to require a follow up bill to get us through the pandemic without further destroying peoples lives and the fabric of our nation. Doing so only now well after it was needed only puts millions of Americans already living on the edge on the precipice of complete disaster.
Almost immediately after Congress passed the bill a week ago, President Trump began trashing it, saying he wanted the payments raised from $600 to $2000, and an elimination of all of the “wasteful” items that were included in the separate budget bill, or he would not pass it. This little sideshow drama dragged on for over a week through the Christmas holiday, allowing unemployment benefits to expire for up to 12MM people over the weekend, before he predictably caved last night.
Setting aside the President’s transparently manipulative theatrics for a second, should Congress have done more to alleviate the pain for its fellow citizens and the overall economy? This bill, at first glance, seems to be too small and too short in duration to get us through the reminder to the pandemic to vaccinations en masse. One thing is clear is that Congress COULD have done more, but simply chose not to, for the usual reasons of political gridlock and blind ideology, namely the convenient obsession with the federal debt and deficits and the ever looming specter of inflation. What we do know, is they always manage to find the money for to help the very richest in our country. For proof of that, look no further than the fact that billions of dollars were buried in the bill to appease the richest among us.
Then there’s economist Larry Summers, who insisted that $2K in payments to Americans would risk overheating the economy. Note that types like Larry Summers rarely concern themselves with the pernicious effects of increasing vast wealth inequality and “overheating” at the highest ends of the economy, due in part to the elements of financialization of the economy, namely in the form of asset inflation (stocks, housing, etc.) and the prices of things Americans need to survive, including education and healthcare. It’s only when the broad masses might benefit a little that we should concern ourselves with such things.
In fact, citizens in states like Senator Mitch McConnell’s Kentucky continue to suffer badly from the economic effects on the pandemic, while he and fellow Senator continue to block much needed aid for many of their own constituents:
In cases and deaths, Kentucky hasn’t been hit as hard by the coronavirus as some other states. Like most of the country, it has experienced a surge this fall, but one less severe than in neighboring Tennessee. Kentucky’s economy is reeling all the same, particularly in rural areas already struggling.
“We were in dire need of help economically to start with, before Covid,” said Matthew C. Wireman, the judge-executive of Magoffin County, an Appalachian county where the unemployment rate was 16.7 percent in October, one of the highest in the country.
The aid would come over the objection of one of Kentucky’s Republican senators, Rand Paul, who was one of just six to vote against the package in the Senate, on the grounds that it amounted to handing out “free money.” And it would be smaller and later than it might otherwise have been because of the work of the state’s other senator, Mitch McConnell, who as majority leader fought to limit the package.
Mr. McConnell in particular worked to exclude broad-based aid to state and local governments — help that many local officials in his state say they desperately need.
Billionaire wealth has completely exploded even further during the pandemic, while millions of their fellow citizens (and workers, in some cases, see Amazon) have greatly suffered. According to the USA Today, America’s 614 billionaires grew their net worth by at least $931 billion (other sources are reporting it’s actually over $1 TRILLION) during this time. Perhaps a nice 30-50% wealth tax on that amount (which would still leave them all fabulously richer than they were before) to help fund a bigger, longer term relief bill that gets us through the remainder of the pandemic without further collateral damage to their fellow citizens and the country as a whole would be just what’s needed? We could even call it The Patriot Tax if that’s what it would take. What does everyone think?