Thoughts on the Next (4th) Stimulus Package
My two highest priorities are for the employees who have been laid off and for the small employers who are struggling to survive.
The $600 bonus on UI benefits is a key sticking point. Democrats want to retain it as it boosts spending during the recession and insulates the laid off workers from economic hardship in their families. Republicans want to end it, or reduce it to $200 a week or transform it into a back to work bonus. They maintain it serves as a disincentive for employees to return to their jobs as in some cases it pays more than their paychecks. A viable compromise would reduce it to the level of the worker’s pay pre-pandemic lay off. They could also provide financial opportunities and incentives for small employers and their employees to collaborate in safely re-opening businesses and rehiring their trained, experienced and vital workforces. There are only a few days remaining before the $600 UI payments expire on July 31.
The Paycheck Protection Program paid employers to hold on their staff during the economic shutdowns generated by the pandemic. It was widely abused by banks, large, well capitalized small businesses and others who moved fast and simply gobbled up “free money”. Not all the funds have been distributed; too many local small businesses have simply collapsed and closed their doors. Many small businesses in the hospitality, travel and entertainment industries are not going to revive until there is an effective and widely distributed vaccine; they will need long term help. Many other small businesses are fine and need no further assistance. The program needs to be retargeted to help the Main St. small businesses in the sectors of the economy that cannot open safely until an effective vaccine is in place.
Testing, tracing, vaccine development and distribution. At this point in LA, only the symptomatic or those working in high-risk settings or at high risk of the disease get tested, and results can too often be long and slow in coming. The Administration wants to zero out the funds for testing, saying that’s a state responsibility. The Democrats and many Congressional Republicans want to increase funds for testing and contact tracing. The only viable tools we have are mask wearing, social distancing, Covid 19 testing and contact tracing while we devote ample financial resources to vaccines. President Trump has been on the wrong side of each and every one of them; Congress needs to be unified and assertive in support of all four approaches.
Funding for state and local governments. State and local governments have been just hammered by Covid 19; their revenues are falling, and the demands and need for health and social services are increasing dramatically. The federal government needs to continue to step in and increase its financial support to help state and local governments finance health, education, social services, police, fire and transportation services.
School reopening in August and September. President Trump wants to tie federal support for school and college funding to reopening in person this summer and this fall. In some places with low or no local transmission rates, this will be perfectly safe. In other states and localities, this would put children and their multi-generational families and the teachers and school staff at high risk and fuel new outbreaks. Democrats and Republicans need to be united in rejecting the President, assuring local control of these decisions, and putting the needed funds into more successful remote learning, and into funding safer places for teaching and learning. We cannot lose yet another semester of vital learning; poor children have been the worst impacted due to the lack of technological support and ineffective and poorly constructed distance learning.
A second $1200 check for low, moderate and middle-income households. This is popular with both Democrats and Republicans. The first check was plagued by delays, checks to dead people and the Administration’s refusal to issue checks to US citizens married to immigrants of particular status. A second check will certainly be welcomed, and it does provide economic stimulus to an ailing economy; however it is not well targeted to those who need it most, and needs to exclude deceased taxpayers and include all US citizens regardless of whom they choose to marry and college students. The President would prefer a payroll tax cut, which helps those at higher wages far more than those with lower wages; some Congressional Republicans, but not the majority, support Trump’s position.
The Senate Republicans are divided but deeply opposed to the Democratic proposals; many want no stimulus at all. https://www.cnn.com/2020/07/27/politics/stimulus-negotiations-republican-plan/index.html
In my view, the fourth stimulus package should provide the funding and the requirement for a universal mail in balloting option in the fall for any and all citizens who want that option. The House version supports this; some GOP Senators are becoming supportive; the President is adamantly opposed.
Prepared by: Lucien Wulsin
Dated: 7/27/20