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| It’s the Largest Relief Deal in U.S. History. Is It Enough? | It’s the Largest Relief Deal in U.S. History. Is It Enough? |
| (about 20 hours later) | |
| This article is part of the Debatable newsletter. You can sign up here to receive it Tuesdays and Thursdays. | This article is part of the Debatable newsletter. You can sign up here to receive it Tuesdays and Thursdays. |
| Just before midnight on Wednesday, the Senate finally passed a sweeping, roughly $2 trillion — or is it $6 trillion? More on that later — relief package to help workers, businesses and hospitals weather the unprecedented economic disruption caused by the coronavirus pandemic. | Just before midnight on Wednesday, the Senate finally passed a sweeping, roughly $2 trillion — or is it $6 trillion? More on that later — relief package to help workers, businesses and hospitals weather the unprecedented economic disruption caused by the coronavirus pandemic. |
| Given that a staggering 3.3 million people filed for unemployment last week — a record, and most likely an underestimate — the relief was urgently needed, and is expected to pass in the House of Representatives on Friday. Is the bill “terrific,” as Treasury Secretary Steven Mnuchin described it, or is it, in the words of The American Prospect’s David Dayen, “a bazooka” of money “aimed at C.E.O.s and shareholders, with almost no conditions attached”? Here’s what people are saying. | Given that a staggering 3.3 million people filed for unemployment last week — a record, and most likely an underestimate — the relief was urgently needed, and is expected to pass in the House of Representatives on Friday. Is the bill “terrific,” as Treasury Secretary Steven Mnuchin described it, or is it, in the words of The American Prospect’s David Dayen, “a bazooka” of money “aimed at C.E.O.s and shareholders, with almost no conditions attached”? Here’s what people are saying. |
| The relief package has five main components: | The relief package has five main components: |
| A one-time check of $1,200 to people with incomes up to $75,000 per year, and an additional $500 per child. At higher incomes, the benefit will phase out and end altogether for those earning more than $99,000. | A one-time check of $1,200 to people with incomes up to $75,000 per year, and an additional $500 per child. At higher incomes, the benefit will phase out and end altogether for those earning more than $99,000. |
| An extension and expansion of unemployment insurance. | An extension and expansion of unemployment insurance. |
| A $500 billion loan program, overseen by an inspector general and a congressionally appointed five-person panel, for large corporations. Specific industries, including airlines and hotels, will receive $46 billion, and the Federal Reserve will use the remaining $454 billion to lever as much as $4 trillion in additional lending. | A $500 billion loan program, overseen by an inspector general and a congressionally appointed five-person panel, for large corporations. Specific industries, including airlines and hotels, will receive $46 billion, and the Federal Reserve will use the remaining $454 billion to lever as much as $4 trillion in additional lending. |
| $349 billion in loans for small businesses to help each cover up to $10 million in payroll expenses, rent, mortgage payments and utilities. | $349 billion in loans for small businesses to help each cover up to $10 million in payroll expenses, rent, mortgage payments and utilities. |
| A $27 billion emergency fund to cover vaccines and medical supplies, $100 billion for hospitals, and $150 billion for state, tribal and local governments to defray coronavirus-related costs. | A $27 billion emergency fund to cover vaccines and medical supplies, $100 billion for hospitals, and $150 billion for state, tribal and local governments to defray coronavirus-related costs. |
| The unemployment insurance expansion is generous, and will be a salve for laid-off workers, Jordan Weissmann writes in Slate. In most states, unemployment insurance covers laid-off workers for a maximum of 26 weeks, but the Senate plan will extend the eligibility period by 13 weeks. The bill will also add $600 to every unemployment check for up to four months. (As of January, the average unemployment check was $385 per week, which is not enough to keep a family above the poverty line.) “For a lot of restaurant and retail workers who’ve been furloughed or laid off as a result of the crisis, it’s a pretty excellent deal,” Mr. Weissmann says. | |
| The unemployment benefits will also help vulnerable workers who would not ordinarily qualify, as Eric Levitz writes in New York magazine. Freelancers, furloughed employees and independent contractors, such as Uber drivers, will be eligible to receive a weekly payment equal to one-half of the state average unemployment weekly benefit plus $600 for up to four months. In his view, these expansions are the bill’s “crown jewel.” | The unemployment benefits will also help vulnerable workers who would not ordinarily qualify, as Eric Levitz writes in New York magazine. Freelancers, furloughed employees and independent contractors, such as Uber drivers, will be eligible to receive a weekly payment equal to one-half of the state average unemployment weekly benefit plus $600 for up to four months. In his view, these expansions are the bill’s “crown jewel.” |
| The $1,200 cash payment is far superior to the proposal it replaced, according to Claudia Sahm, the macroeconomic policy director at the Washington Center for Equitable Growth. The Trump administration favored a payroll tax cut, which wouldn’t have helped people who have lost jobs. | The $1,200 cash payment is far superior to the proposal it replaced, according to Claudia Sahm, the macroeconomic policy director at the Washington Center for Equitable Growth. The Trump administration favored a payroll tax cut, which wouldn’t have helped people who have lost jobs. |
| The bill also provides urgent liquidity to businesses that have seen their revenue reduced or eliminated through no fault of their own, The Wall Street Journal editorial board writes. Unlike the 2007-2008 financial crisis, “this is not a problem caused by business or reckless C.E.O.s,” the board says. “This is a liquidity crisis caused by the government strategy to reduce the spread of the virus and loss of life.” Crucially, small businesses can have most of their loans forgiven so long as they retain their employees. | The bill also provides urgent liquidity to businesses that have seen their revenue reduced or eliminated through no fault of their own, The Wall Street Journal editorial board writes. Unlike the 2007-2008 financial crisis, “this is not a problem caused by business or reckless C.E.O.s,” the board says. “This is a liquidity crisis caused by the government strategy to reduce the spread of the virus and loss of life.” Crucially, small businesses can have most of their loans forgiven so long as they retain their employees. |
| The relief package is a robbery in progress, David Dayen, the executive editor of The American Prospect, writes. He notes that the Federal Reserve’s prospective $4 trillion lending program makes it a $6 trillion, not a $2 trillion, relief package, which he predicts will serve mostly to consolidate corporate control over the economy. “This is a rubber-stamp on an unequal system that has brought terrible hardship to the majority of America,” he says. “The people get a $1,200 means-tested payment and a little wage insurance for four months. Corporations get a transformative amount of play money to sustain their system and wipe out the competition.” Representatives Justin Amash, who left the Republican Party to become an independent last year, and Alexandria Ocasio-Cortez had similar criticisms. | The relief package is a robbery in progress, David Dayen, the executive editor of The American Prospect, writes. He notes that the Federal Reserve’s prospective $4 trillion lending program makes it a $6 trillion, not a $2 trillion, relief package, which he predicts will serve mostly to consolidate corporate control over the economy. “This is a rubber-stamp on an unequal system that has brought terrible hardship to the majority of America,” he says. “The people get a $1,200 means-tested payment and a little wage insurance for four months. Corporations get a transformative amount of play money to sustain their system and wipe out the competition.” Representatives Justin Amash, who left the Republican Party to become an independent last year, and Alexandria Ocasio-Cortez had similar criticisms. |
| Some have also noted that $1,200 is, for many people, barely enough to cover one month’s rent. The national median rent for a one-bedroom apartment is $1,216 per month, according to Zumper. What’s more, those who do not have direct-deposit bank account information on file with the Internal Revenue Service from tax-refund filing may have to wait up to four months to get their checks in the mail. | Some have also noted that $1,200 is, for many people, barely enough to cover one month’s rent. The national median rent for a one-bedroom apartment is $1,216 per month, according to Zumper. What’s more, those who do not have direct-deposit bank account information on file with the Internal Revenue Service from tax-refund filing may have to wait up to four months to get their checks in the mail. |
| By contrast, some have called the bill too generous to workers. | By contrast, some have called the bill too generous to workers. |
| The Economist maintains that the $1,200 direct payment could be both too small for those who need them and too big for those who do not. | The Economist maintains that the $1,200 direct payment could be both too small for those who need them and too big for those who do not. |
| Because the unemployment benefit will exceed the pay of some low-wage jobs, the Republican Senators Tim Scott, Ben Sasse, Lindsey Graham and Rick Scott argued it will discourage work. (Although as The Times’s Binyamin Appelbaum pointed out, people who voluntarily quit their jobs are not eligible for unemployment insurance in the first place.) | Because the unemployment benefit will exceed the pay of some low-wage jobs, the Republican Senators Tim Scott, Ben Sasse, Lindsey Graham and Rick Scott argued it will discourage work. (Although as The Times’s Binyamin Appelbaum pointed out, people who voluntarily quit their jobs are not eligible for unemployment insurance in the first place.) |
| The funding for small businesses and local governments is insufficient, according to The Times’s editorial board. The small-business loan plan offers less than a third of what some experts estimate is needed to stave off layoffs and bankruptcies, and even contains a provision that could allow President Trump’s hotels to qualify. The funding for state and local governments, the board says, is even worse: New York is currently the state hardest hit by the coronavirus and may lose up to $15 billion in revenue, yet the relief package earmarks only $3.1 billion for the state. “We are frugal,” Gov. Andrew Cuomo said, but “I’m telling you these numbers don’t work.” | The funding for small businesses and local governments is insufficient, according to The Times’s editorial board. The small-business loan plan offers less than a third of what some experts estimate is needed to stave off layoffs and bankruptcies, and even contains a provision that could allow President Trump’s hotels to qualify. The funding for state and local governments, the board says, is even worse: New York is currently the state hardest hit by the coronavirus and may lose up to $15 billion in revenue, yet the relief package earmarks only $3.1 billion for the state. “We are frugal,” Gov. Andrew Cuomo said, but “I’m telling you these numbers don’t work.” |
| Do you have a point of view we missed? Email us at debatable@nytimes.com. Please note your name, age and location in your response, which may be included in the next newsletter. | Do you have a point of view we missed? Email us at debatable@nytimes.com. Please note your name, age and location in your response, which may be included in the next newsletter. |
| “There’s a big victory buried in the $2 trillion rescue bill” [The Washington Post] | “There’s a big victory buried in the $2 trillion rescue bill” [The Washington Post] |
| “The $2.2 trillion stimulus can’t be the last thing Congress does on coronavirus” [Vox] | “The $2.2 trillion stimulus can’t be the last thing Congress does on coronavirus” [Vox] |
| “Democrats Are Handing Donald Trump the Keys to the Country” [HuffPost] | “Democrats Are Handing Donald Trump the Keys to the Country” [HuffPost] |
| “What’s the Best Fix for a Recession?” [The New York Times] | “What’s the Best Fix for a Recession?” [The New York Times] |
| “Will the Coronavirus Make Restaurants Like Mine Extinct?” [The New York Times] | “Will the Coronavirus Make Restaurants Like Mine Extinct?” [The New York Times] |
| Here’s what readers had to say about the last debate: Is this really the best way to fight coronavirus? | Here’s what readers had to say about the last debate: Is this really the best way to fight coronavirus? |
| Mark Bitterman from Oregon (via email): | Mark Bitterman from Oregon (via email): |
| As a small-business owner (retail & light manufacturing) who just laid off his entire company, I can say with some confidence that there are lives at stake whether you ease distancing (and encourage public economic activity like tourism, shopping and eating out) or double down on it. … Shutting down an entire economy worked (maybe) in countries with enormous social safety nets and somewhat to very different economic underpinnings. | As a small-business owner (retail & light manufacturing) who just laid off his entire company, I can say with some confidence that there are lives at stake whether you ease distancing (and encourage public economic activity like tourism, shopping and eating out) or double down on it. … Shutting down an entire economy worked (maybe) in countries with enormous social safety nets and somewhat to very different economic underpinnings. |
| Greg Koski, former director of the Office for Human Research Protections at the Department of Health and Human Services (via email): | Greg Koski, former director of the Office for Human Research Protections at the Department of Health and Human Services (via email): |
| The elephant in the room is of course the lack of confidence and trust in our leadership, confidence and trust that are essential when asking people to make personal sacrifices for the broader societal good. In a highly polarized environment where truth is relative, facts are debatable, values are undermined and trust is essentially nonexistent, development and implementation of a coherent, evidence-based and well-coordinated plan are simply impossible. | The elephant in the room is of course the lack of confidence and trust in our leadership, confidence and trust that are essential when asking people to make personal sacrifices for the broader societal good. In a highly polarized environment where truth is relative, facts are debatable, values are undermined and trust is essentially nonexistent, development and implementation of a coherent, evidence-based and well-coordinated plan are simply impossible. |
| Guy from New Jersey (via email): | Guy from New Jersey (via email): |
| The world will also remember, and not forgive, how the United States, for strictly ideological and political reasons, refused to lift economic sanctions on Iran, Venezuela and Cuba and so made the international fight to defeat this global threat that much more difficult, needlessly killing tens of thousands of innocent civilians in the process. The moral legitimacy of America before both its own citizens and the rest of the world will be lost for generations, no matter how high the Dow Jones Average soars. | The world will also remember, and not forgive, how the United States, for strictly ideological and political reasons, refused to lift economic sanctions on Iran, Venezuela and Cuba and so made the international fight to defeat this global threat that much more difficult, needlessly killing tens of thousands of innocent civilians in the process. The moral legitimacy of America before both its own citizens and the rest of the world will be lost for generations, no matter how high the Dow Jones Average soars. |