Relief package incredibly costly and complex, but undeniably needed
On Friday the U.S. House of Representatives approved by a voice vote the $2.2 trillion relief package engineered in the Senate.
It being Washington there had to be drama, as some procedural fireworks forced members to scramble back to Washington, including 2nd District Rep. Joe Courtney.
By any measure, it is the biggest emergency package ever approved in a single vote. How big? It equals 46% of the $4.8 trillion budget approved in February to run the entire government. And that budget, by the way, was $966 billion in deficit on the day President Trump signed it because projected spending far outstripped projected revenues.
But the dire situation created by the COVID-19 crisis left Congress no choice. The decision to shut down much of American commerce to accommodate social separation and discourage the spread of the contagion is causing unprecedented damage to the nation’s economy. Failing to pump these trillions into that economy would have assured a more severe economic collapse and that would have proved more costly than the bailout.
The nation in recent weeks has witnessed more than 3 million unemployment claims. In the worst month during the Great Recession, March 2009, 665,000 claims were filed.
Of course, no one really knows how much the price tag will be or what unnecessary pork may have been shoved into the bill. The legislation reportedly runs to 800 pages. We admit our editorial board members did not read it. We suspect few of those who voted on it did either. Revelations about the content will continue for weeks and we don’t suspect this to be our last word.
Senate Democrats held out for a couple of days, under considerable pressure, to demand changes in the legislation that was initially put together by the Senate Republican majority. The tactics proved worth it, with more relief aid targeted to workers and safeguards created — in the form of an Inspector General and a special commission — to monitor the billions in loans that will be available for corporate rescues.
Grabbing the headlines is the $1,200 checks for every adult and $500 for every child. The stimulus aid is phased out at higher incomes. We still have reservations about the money being paid out equally to all whether folks were damaged by the crisis or not. But the need for speed was a factor. And that relief does not stand alone, as it first appeared it might, but is part of a comprehensive package.
The relief package will add $600 to unemployment weekly payments. That help is necessary to allow workers, who lost jobs through no fault of their own, to pay the bills until those jobs return. The boosted unemployment lasts four months.
The bill includes $377 billion in forgivable loans to small businesses with fewer than 500 employees. The forgiveness is tied to keeping workers employed. That help was critically important.
Connecticut will receive $1.38 billion in direct state aid, according to the nonpartisan Tax Foundation. But anyone who has been paying attention knows that will almost certainly fall far short of the fiscal damage the crisis is causing the state.
As for the $454 billion that will back a massive Federal Reserve loan program to prop up industries hit hard by the sudden economic seizure, we only hope there are provisions to assure that corporations first turn to the private banking industry for loans. If a corporation was fiscally sound entering the crisis, it should qualify for low-interest private-sector loans.
The legislation provides $150 billion in emergency aid to hospitals and other health care providers. But who gets it, how fast and for what is the question. And is it enough?
The bottom line is that the Coronavirus Aid, Relief, and Economic Security Act has helped to stabilize the markets, for now, and reduces the potential for an immediate and steep economic collapse. But difficult times remain ahead from both the human and the economic damage of this new virus, from which none of us has immunity.
The Day editorial board meets regularly with political, business and community leaders and convenes weekly to formulate editorial viewpoints. It is composed of President and Publisher Tim Dwyer, Editorial Page Editor Paul Choiniere, Managing Editor Tim Cotter, Staff Writer Julia Bergman and retired deputy managing editor Lisa McGinley. However, only the publisher and editorial page editor are responsible for developing the editorial opinions. The board operates independently from the Day newsroom.
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In New London they delivered their message, they vented their fury, but peacefully. For that they should be proud. It says something positive about this community we share.
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