“It’s a transition to greatness,” Trump says, predicting a booming economy in the fall (when most epidemiologists predict a second wave of the coronavirus that already has killed 100,000 Americans). “You’re going to see some great numbers in the fourth quarter, and you’re going to end up doing a great year next year.”
Republicans are going all in for “trickle-down” economics, the theory that if you shower enough money on plutocrats, they’ll let some of it trickle down on workers. In 2017, the Grand Oligarch Party passed a tax cut for corporations and billionaires that is expected to cost the Treasury $2 trillion through 2027, and we got few economic benefits from it. White House National Economic Council Director Larry Kudlow proposes further slashing the 21% corporate tax rate in half for companies that return operations to the US from overseas, and the White House has called for a payroll tax cut, which would provide no help for the unemployed, who are, by definition, off the payroll. It is a cynical attempt to cripple Social Security and Medicare, since it would cut revenue for those programs.
It falls to Democrats to see that the unemployed remain housed and fed during the year or more until we get an effective vaccine and/or treatments for COVID-19. The House on May 15 passed a second bill to provide relief for those impacted by the pandemic. The Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, estimated to cost $3 trillion, was approved on a 208-199 vote, despite complaints from the Congressional Progressive Caucus leadership that some progressive programs were left out. Fourteen Democrats opposed the bill, while only one Republican, Rep. Peter King of New York, supported it.
The bill has some very good provisions, including nearly $1 trillion in aid to state, local, territorial and tribal governments to help offset revenue losses due the pandemic shutdown and keep public employees on the job. It includes $200 billion in hazard pay for essential workers; a 15% increase in Supplemental Nutrition Assistance Program benefits; $75 billion for testing, contact tracing and free treatment for coronavirus; an extension of the $600 weekly bump to unemployment insurance payments through January 2021; and $175 billion in new money for rent, mortgage and utility payments.
The bill also includes $25 billion to keep the Postal Service operating, though Trump has already rejected that as he has demanded the service charge higher rates for parcel shipping, in an apparent retaliation to critical coverage by the Washington Post, which is owned by Amazon CEO Jeff Bezos. Trump also opposes a provision that would help states implement vote-by-mail for citizens who might be scared to vote in a public polling place. It also would amend the Help America Vote Act of 2002 to allow a sworn signature as acceptable identification for voters on election days in all states, eliminating the need for state-mandated photo IDs.
The bill doesn’t include the $2,000 monthly direct cash payments that had been discussed, instead repeating the one-time $1,200 payment that was provided in the previous CARES Act, up to $6,000 for families with children. The bill also providees new funds the Paycheck Protection Program, the small business loan program that was a boon more for mid-sized corporations than small businesses.
Rep. Pramila Jayapal, D-Wash., co chair of the Congressional Progressive Caucus, said the loans and the boost to unemployment checks as opposed to direct cash payments and grants to business is “mass unemployment” as a “policy choice.” She proposed a Paycheck Guarantee Act, which would have guaranteed 100% coverage of workers’ wages up to $90,000 a year for businesses that could show they had lost revenue due to the pandemic.
Jayapal noted that an analysis by Mark Zandi, chief economist at Moody’s Analytics, shows the Paycheck Guarantee would benefit more than 36 million workers at a net cost of $654 billion over six months. That’s less than what Congress appropriated for two rounds of loans from the Paycheck Protection Program, which has not been able to stem the tide of job losses.
But complaints that the House bill is not progressive enough are largely moot, since neither Senate Majority Leader Mitch McConnell nor Donald Trump have any intention of letting the Democratic bill get anywhere near enactment. McConnell called it a “big laundry list of pet priorities” that has “no chance of becoming law.” The White House formally threatened a veto.
House Speaker Nancy Pelosi might be able to get some pro-worker provisions into another stimulus bill, but that likely will happen only if she will accept corporate immunity from lawsuits if workers become sick with COVID-19 after returning to work. Trump has made it clear that he will only agree to a bailout of the Postal Service if it agrees to restructuring that would include rate increases, particularly in parcel post, and renegotiation of contracts with postal unions, which already have made sacrifices.
Republicans, in short, are willing to let the unemployed workers starve. Their sensibilities have not advanced much since the early 1930s, when President Herbert Hoover denied that the federal government needed to interfere with the markets to relieve the millions who were left unemployed during the Great Depression.
Unemployed workers and small business owners who are now adrift must hope that Joe Biden is the reincarnation of Franklin Roosevelt. Though Biden is dismissed by many on the left as a corporate Democrat, we believe he is a pragmatist who will embrace what he thinks he can get through Congress.
Biden reportedly is contemplating an FDR-style presidency that is committed to spending “whatever it takes” to stimulate economic recovery. He has argued that, even if you’re inclined to worry about the deficit, massive public investment is the only thing capable of growing the economy enough “so the deficit doesn’t eat you alive,” Gabriel Debenetti wrote in New York magazine (May 11).
Biden has talked about funding immense green enterprises and larger backstop proposals from cities and states and sending more relief checks to families. He has urged immediate increases in virus and serology testing, and he has called for investments in an “Apollo-like moonshot” for a vaccine and treatment. And he floated both the creation of a 100,000-plus worker Public Health Jobs Corps and the doubling of the number of OSHA investigators to protect employees amid the pandemic. If he were president, he said in March, he would demand paid emergency sick leave for anyone in need and mandate that no one would have to pay for coronavirus testing or treatment. As the crisis deepened, he said he would forgive federal student-loan debt — $10,000 per person, minimum — and add $200 a month to Social Security checks.
Biden has not embraced Medicare for All, but if the right-wing majority on the Supreme Court agrees with the Republican plea to overturn the Affordable Care Act, Biden’s attitude might change.
But it will all go for naught if Mitch McConnell remains Senate majority leader. Democrats need to get people out, pandemic or not, to vote not only for Biden and his eventual running mate, but also for Democrats for the Senate and House. — JMC
From The Progressive Populist, June 15, 2020
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