Without more relief, recession will gravely deepen
This is the latest in a series of editorials taking a closer look at the massive federal coronavirus relief legislation.
In this moment of dire pandemic consequences, with 100,000 dead Americans and 40 million more unemployed, the federal government is leaderless.
President Donald Trump outsourced his most important job — protecting the citizens of the country — to 50 state governors.
It should not be this way, but it is. Trump’s steadfast refusal to provide leadership pushed the states to fend for themselves. America’s battle plan to counter the virus is being waged inefficiently in 50 different ways.
Congress, which has passed four emergency spending measures already this year, in March provided some relief for the states with $150 billion to address emergency COVID-19 expenditures. The governors complained that is not nearly enough to counter the devastation to state budgets from dwindling tax revenues related to the economic shutdown.
Democrats responded in the House on May 15 by narrowly passing a fifth federal relief package; a $3 trillion bill aimed at addressing the devastating economic fallout from the coronavirus outbreak.
Yes, the price tag attached to the HEROES Act is strikingly large. The sudden growth in the nation's already too large national debt does have long-term implications for acting as a drag on economic growth. There are no good options here, only less bad ones. And not acting to help states is the worst choice. It would assure a deep recession, more costly to the nation than enlarging the relief package.
The 1,815-page legislation is a bigger spending package than the four previous measures combined. The HEROES Act − Health and Economic Recovery Omnibus Emergency Solutions − passed 208-199.
Although the Act directs massive amounts of money into many areas of the economy, the biggest single expenditure, almost $1 trillion, is relief to state, municipal, and tribal governments. States are in line for $500 billion. Cities were designated to receive $400 billion. Another $87.5 billion is earmarked specifically for towns of under 50,000 population.
The House bill was panned by the White House and Senate Republicans as a liberal wish list.
Republicans concede more federal relief will be needed at some point. However, they argue that the $2.2 trillion relief package approved in March has yet to work its way into the economy. Republicans want to hit the pause button and recalibrate before ballooning the federal deficit by another $3 trillion.
There is no pause button for the governors on the front lines of this pandemic. State governments are strained beyond capacity in regions of the country hardest hit, including Connecticut.
Unlike the federal government, states must balance their budgets. The aid from the HEROES Act is designed to keep those governments functioning at full capacity for two years.
Trump indicated a willingness to discuss state aid, but he wants to withhold federal relief from “blue states that have gotten themselves into financial trouble,” according to White House press secretary Kayleigh McEnany.
This is not a red state versus blue state partisan fight. State relief aid from the federal government has broad bipartisan support from Democratic and Republican governors.
Delaying financial relief to the states is counterproductive to Trump’s desire for a speedy economic recovery. State operating budgets are imploding. Hundreds of thousands of state employees around the country will lose their jobs without a federal bailout. State and local taxes would have to be sharply increased. Such an outcome would add to the unemployment problem and deepen and prolong the recession.
It is the role of the Republican-controlled Senate and the Trump administration to make a counteroffer, to expose what they consider pork, but inaction would amount to dereliction of duty.
We endorse emergency relief for state, local and tribal governments, with assistance apportioned based on each state’s economic and social damage from the pandemic.
The financial relief should come with conditions that states and local governments comply with federal guidelines for safe re-opening of their economies. Congress should instruct the Centers for Disease Control and Prevention and the Occupational Safety and Health Administration to issue mandatory guidelines that give states reasonable, science-based, and clear safety regulations.
Strict and mandatory safety measures will place the federal government back where it belongs, in charge of the national struggle against the virus. With compliance to science-based national standards, fewer people will be exposed to the virus.
It would be a waste to pour more relief money on this fire if states allow practices that only reignite it.
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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