I wanted to give a rundown on what the new stimulus bill that Moscow Mitch McConnell emerged with in the GOP-run Senate,
which is being called HEALS.
McConnell, flanked by top GOP [Senate] chairs Monday at the Capitol, unveiled his long-awaited proposal. It provides some $105 billion to schools and colleges, the K-12 funds tilted toward campuses that reopen with in-person learning. There’s more money for virus testing, $15 billion for child care centers and benefits for businesses, including a fresh round of loans under the Paycheck Protection Program, tax breaks and a sweeping liability shield from COVID-19-related lawsuits.
The Republican proposal would also provide another round of $1,200 direct payments based on the same formula from the earlier aid bill. People making $75,000 or less would receive the full amount, with the benefit phased out for those earning above $99,000, or double for married couples filing joint taxes.
That's the parts of the bill that will give some stabilization and try to have the economy recover in a time when COVID-19 cases and related shutdowns continue to rise. It's something, but significantly smaller than what House Democrats passed in the HEROES Act.
Well, other than the "liability shield", which basically tries to let businesses off the hook for putting their employees at risk of catching COVID. And apparently that provision is what Moscow Mitch really
cares about when it comes to HEALS.
Nice priorities, eh?
On the other end of the economic status spectrum, one of the biggest differences is in the amount that the tens of millions of unemployed Americans would receive. Instead of continuing the $600 add-on to what unemployment typically pays, Moscow Mitch's bill will cut that by $400 immediately, and it gets worse 2 months later.
Under the GOP proposal, the jobless boost would be reduced to $200 a week for two months through September and phased out to a new system that ensures no more than 70% of an employee’s previous pay. States could request an additional two months, if needed, to make the transition.
Democrats pointed to an assessment from economist Mark Zandi, who called it a “poor policy choice.” Zandi said that if the GOP proposal became law, nearly 1 million jobs would be lost by year’s end and the unemployment rate, now above 11%, would climb more than half a percentage point.
That’s going to cause a significant drop in income for a lot of Americans that are already struggling to pay the rent as it is. And forcing states to change the way unemployment benefits are calculated and how the programs are run is one of the reasons that people haven’t been able to get their unemployment checks in Wisconsin and other states.
In addition, Mitch's Senate bill has ZERO aid to state and local governments to help them carry out services that have become much more necessary during this recession and the mass layoffs that have come with it. This will also result in lost jobs, less security, and will prolong the recession if that ends up in the final bill.
I'll also add that the "70% wage replacement on unemployment" part is especially bad, because it would mean that states would have to put in another
unemployment program with a new way of calculating benefits. The front page article on the Journal-Sentinel site today talks about how hard it has been for the Wisconsin Department of Workforce Development to set up the Pandemic Unemployment Assistance (PUA) program
, which became law with the CARES Act in April.
Since the creation of the program, the state has received 91,077 applications and processed 40,573, said Ben Jedd, communications director for the department. The department processed about 10,873 PUA claims last week alone and they're being processed in the order that they came in.
The program was the last to be established in Wisconsin's system after the state removed its one-week waiting period before unemployment benefits can be applied for and then established the Federal Pandemic Unemployment Compensation program. Because of the software that Wisconsin utilizes, all of the unemployment programs had to be implemented one at a time.
Jedd also noted that as soon as the system was established and ready to take claims, about 40,000 people applied in the first week.
He said that by default, the determination process for PUA also takes longer because, while regular unemployment is mostly automated, PUA is entirely manual. That means all claims need to be handled and determined by an adjudicator, resulting in cases piling up.
With that experience in mind, can you imagine the clusterf*ck you'd see in trying to reprogram the maximum benefit for hundreds of thousands of Wisconsinites in October? It's almost like Moscow Mitch wanted unemployment to be FUBARed with this ridiculous plan. Almost.
Naturally, some Senate Republicans think that a pared-back aid package in a time of double-digit unemployment and 400,000+ new COVID cases each week is....too generous?
But conservative Republicans quickly broke ranks on McConnell’s plan, arguing the spending was too much and priorities misplaced. Half the Republican senators could vote against the bill, some warned, and their opposition leaves McConnell heading into negotiations with Pelosi without the full force of the Senate majority behind him.
“The focus of this legislation is wrong,” Sen. Ted Cruz, R-Texas, one of the bill’s most vocal opponents, told reporters at the Capitol. “Our priority, our objective, should be restarting the economy.”
Hey Ted, how are you going to restart the economy if a whole lot of people lose their incomes and can’t pay their bills, while a whole other group of Americans won’t go out and spend money because COVID-19 is still out of control?
What Cruz and Ron Johnson (who wants NO new money to be sent out to anyone)
and other regressives really want is for people to be forced back into work,
regardless of the danger involved. This would artificially push down the unemployment rate before the November elections, to give the appearance
of normalcy, and GOPs would use that as an excuse to avoid having the deal with the real economic and public health problems that exist.
It's a head-in-the-sand mentality that should disqualify any GOP that buys into it, and it’s especially the wrong way to go about things right now, when the real problem is a lack of demand due to the health concerns brought on by COVID-19. Democrats in Congress should say that this bill is DEAD ON ARRIVAL, and there are already enough GOPs opposing the bill to kill it in the Senate, meaning Moscow Mitch has completely failed with this thing.
That being said, Dems shouldn't just relax and tell the Senate to pass HEROES. Instead Dems should counter the regressive GOPs by adding an increase in the minimum wage to any proposal that would cut the benefit amount for unemployment, putting the wage somewhere between $12 and $15 by October 1. They can also throw in a plan to pay employers a subsidy of $5/hour for every employee whose wages are raised by that amount (in the case of workers making less than minimum wage) in 2020, and a phased-down subsidy for employees making up to $30/hour.
That would say “You want people to get back to work, GOP? Then we’re going to make sure that work is worth going back to.” I’d also say unlocking health care from jobs would be part of these reforms, but that can get done after President Biden and a Dem Senate take over in 2021.
And Dems shouldn't be scared by the reality that this inaction will worsen the economy in the next month, because GOPs will rightfully be blamed for the relapse into recession due to their inability to deal with COVID and the related economic problems.
Given the ineptitude and idiotic economics of the Republican "stimulus" bill, it's not just going to stop any chance we have of a strong "V"-like recovery (that already likely sailed anyway). Moscow Mitch's scheme makes it likely that we end up with a "W", where we fall back into recession, stay mired in double-digit unemployment, and enters an ugly second phase with evictions, store closings, and chain reactions that can make our economy even worse than the garbage situation we have today.