Days after President Donald Trump signed into law a $2 trillion coronavirus relief package, House Minority Leader Kevin McCarthy has begun to argue additional congressional aid may not be necessary — even as House Speaker Nancy Pelosi says she is eyeing “phase four” of coronavirus relief.
“I’m not sure you need a fourth package,” McCarthy said on Fox News’ Sunday Morning Futures. Congress has passed three relief bills in the last several weeks.
“What concerns me is when I listen to Nancy Pelosi talk about a fourth package now, it’s because she did not get out of things that she really wanted,” he said, noting certain elements Democrats asked for had held up the CARES Act, which was signed into law on Friday.
Those elements included support for “sanctuary cities” and the “Green New Deal,” McCarthy said. He was likely referring to certain stipulations that Democrats had attempted to insert into the bill, such as tying relief for airline companies to increased environmental standards, increasing relief for solar and wind energy, and setting aside $350 million in aid for refugees, something which remained in the final bill.
Earlier in the week, McCarthy also expressed concern that the CARES (or Coronavirus Aid, Relief, and Economic Security) Act would be followed up too soon with additional federal dollars, before lawmakers were able to fully understand the effects of its latest aid package.
“We have now just passed what would be the third bill,” he said on Fox News Thursday morning. “Let’s let this work … We have now given the resources to make and solve this problem. We don’t need to be crafting another bill right now.”
Despite McCarthy’s concerns, another aid package is on the way
The CARES Act, the biggest federal bailout in history, provides direct cash payments to most American adults, expands unemployment insurance, and creates loan funds for small businesses and large industries. It passed the House by a voice vote and the Senate 96-0, before being approved by Trump.
Despite the strong bipartisan showing at the final vote, the days leading up to the bill’s package were marked by turmoil, as Democrats and Republicans sparred over certain provisions, including oversight measures for a $500 billion loan program for large businesses. And since its passage, some critics, especially on the left, have said that it does not go far enough, excluding some workers from cash payments, for example, and leaving accountability measures easily overstepped.
That may be part of why, at a press conference on Thursday, before that bill had officially passed, Pelosi said an additional package that goes beyond “mitigation” of the crisis was in order.
“There’s so many things we didn’t get in any of these bills yet in the way that we need to,” she said. Democrats have pushed for long-term expansions of emergency food assistance, paid leave programs — one such program, passed in mid-March, exists only through the state of emergency — and worker protections.
Senate Minority Leader Chuck Schumer also signaled he would consider an additional aid package.
“We should be willing, able to come back in a bipartisan way and do more if we need it, and I believe we’ll probably have to do that, one way or another,” he told Politico on Thursday.
McCarthy disagreed Thursday, saying, “I wouldn’t be so quick to say you have to write something else … Whatever decision we have to make going forward, let’s do it with knowledge, let’s do with experience of what’s on the ground at that moment in time.”
But many of his fellow Republicans disagree. Republican Sen. Roy Blunt, for example said, Friday, “The minute we’re done with phase three, we’ll start talking about phase four because all of us know that phase three can’t have included everything that needs to be included.”
When senators will return to negotiate a fourth package, is not clear: the Senate is out of session until at least April 20, and the House is also on a recess. However, McConnell has said he’s instructed senators to be ready to return earlier if needed: “If circumstances require the Senate to return for a vote sooner than April 20, we will provide at least 24 hours notice,” the majority leader said.
Lawmakers of both parties agree the economy — and workers — are in need of help
In spite of the three relief packages that have already passed, the American economy — and the individual workers, investors, and businesses that comprise it — are still deeply hurt by the spread of Covid-19.
Amid a spiraling stock market, one of the starkest illustrations of the economic freefall sparked by this virus’s spread — a freefall that could lead to a recession, if not an outright depression, economists say — is the most recent jobless numbers: 3.3 million Americans filed for unemployment last week, shattering a 1982 record of about 700,000 filings in one week.
This has wide-reaching effects, as Vox’s Matthew Yglesias and Christina Animashaun report: it means small businesses, temporarily shut down to encourage social distancing, may permanently shutter; in the meantime, workers are losing jobs and curtailing spending.
“The surge is so unprecedented in historical terms that it essentially defies efforts to forecast where the economy may go in the future,” Yglesias writes.
And while some disagreements remain between Republicans and Democrats over Congress’ role in providing economic assistance — such as whether the latest bill should be the first part of an ongoing disaster relief effort or phase one of an ongoing stimulus program. There is bipartisan support for congressional economic aid. GOP Sen. Mitt Romney, for example, was a strong supporter of sending checks to individual Americans and House Democrats proposed giving the airline industry a $40 billion bailout.
While the scale of the economic disaster is still unknown and hard to foretell — early predictions of unemployment filings were off by about a million, for example — quelling one wave at this stage won’t necessarily prevent more from rippling out, as Vox’s Ezra Klein has written, citing Moody’s Analytics chief economist, Mark Zandi. Following the sudden stop of public life in the last few weeks, as people stop eating out, seeking child care, traveling, buying homes and cars, and engaging in the thousand activities that spark a healthy economy, more waves follow, Klein writes:
When the economy stops, and GDP plummets, workers lose their jobs. That, Zandi said, is wave two, and “it’s coming very quickly.” It may already be here. Initial data suggests we’re seeing a spike in unemployment claims so massive it makes the worst week of the Great Recession essentially disappear on a chart.
The third wave, according to Zandi, will be “all these folks who’ve seen their nest egg wiped out. They thought they were set for retirement and they’re not. They’ll go into panic mode.” The shattered stock market will be a disaster for those in or near retirement. They’re watching wealth they worked their whole lives to build crumble in the space of weeks. They won’t purchase that new car, buy that new house, plan that vacation — and unlike some of the direct economic stoppages, which will lift when the virus eases, their reticence to spend will slow economic growth long after the direct crisis ends.
Wave four, Zandi continues, will see businesses cut investment. Corporations that intended to open a new factory won’t; media organizations thinking of launching new publications will hold back; businesses that meant to upgrade their office space in 2021 will decide they’re fine where they are. Another engine of economic growth dead.
As a result, relief money that does not take into account long-term ramifications — the money people will need in their pockets to keep stocking up on food, for example, during ever-increasing stay-at-home orders — will not be enough to mitigate even the worst effects of this disaster, much less spark ongoing energy back into the economy.
The crafting of any additional relief legislation will shed some light on which direction lawmakers intend to go — whether they seek to stanch economic bleeding, or proactively try to prevent more wounds from opening.