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Why America Needs Another COVID Relief Bill

Rewarding people for staying home in a deadly pandemic is appropriate.

Congress is talking about another Coronavirus relief bill. Sources say that Mitch McConnell will propose a $1 trillion bill this week that will, without a doubt, trigger much weeping and gnashing of teeth from both sides of the political spectrum. Congress should come together and pass another relief package for the American people.

If you’ve been reading my stuff for very long, you know that I’m typically a budget hawk. For years, I’ve been very critical of Washington’s out-of-control spending and I consider the mounting national debt to be one of the greatest long-term threats that we face as a nation. So, why then, am I arguing in favor of another massive pandemic bailout?

The answer is that the pandemic is a true national emergency and one of the few instances in which, as Barack Obama put it, shoveling money out the door is the right response.

The word “emergency” gets bandied about a lot these days. Often, the emergency is really a matter of marketing. That is not the case with the pandemic. We have a real, honest-to-goodness, life-and-death public health crisis on our hands.

The correct response to the very infectious disease that presents that public health crisis is to stop or at least slow the spread of the infection. The way to contain the infection is stop people from interacting. People who are not in essential occupations need to stay home so that they neither contract nor transmit COVID-19. This needs to go on at least until hospital capacity can be assured. Continuing the isolation until new Coronavirus cases reach near-zero would be even better.

If all this sounds familiar, it’s because it is. We did this back in the spring and it worked. If you look at charts of Coronavirus cases in the US, you see explosive growth in the latter half of March followed by a slow decline until June.

In June, several things happened. Many states had already reopened. Warmer weather brought more people out and increasing confidence led many to abandon social distancing. The George Floyd protests brought thousands into the streets, again without social distancing and often without masks.

Now, Coronavirus cases are spiking around the country and the death toll is already starting to rise again. Our situation is similar to March except that the virus is much more widely spread around the country. Where New York was the epicenter in the spring, we now have hot spots in Arizona, California. Florida, Georgia, Texas, and elsewhere.

Nevertheless, the prescription is the same. People should isolate when possible, wash their hands frequently, and practice social distancing. When social distancing cannot be maintained, masks should be worn. More importantly, masks should be worn correctly. If these steps cannot be taken voluntarily by enough people, then we will need additional government-mandated shelter orders.

That brings us back to the COVID relief bill. Congress passed the CARES Act in March but the bill has proven to be woefully inadequate for the emergency at hand. The law included one-time payments to taxpayers, supplemental unemployment payments, and loans to businesses with many strings attached.

The bill was constrained by the Republican belief that people should not be rewarded for not working. Normally, I’d agree with that logic but rewarding people for staying home in a deadly pandemic is the appropriate course of action. If the government wants people to stay home and not spread the disease, then they need to be compensated for lost income and businesses need to be compensated for lost revenues.

A problem for the upcoming bill is that it is far from clear that this is what the Trump Administration wants. Axios reports that Mitch McConnell’s proposal will include such items as educational funding to prepare schools for reopening, liability protection for businesses, a payroll tax cut, and an extension of the Paycheck Protection Program in addition to increased funding for COVID-19 testing. Much of the Republican plan will focus on encouraging people to go out when they really need to stay in.

Other countries are handling the pandemic much better than the US. That includes their strategies for economic relief. Rather than offering minimal one-time payouts and loans, many other countries directly subsidized wages to encourage companies to keep employees on the payroll. This is an improvement on the bureaucratic difficulties of the American PPP as well as the financial limitations of the one-time payment. This strategy also prevented the problem of paying unemployed workers more than they earned while they were working.

The new relief package should be based on metrics that show the virus is contained rather than being time-limited. Reopening shouldn’t adhere is a strict timeline but should be based on objective data of our progress in containing the virus. These metrics are going to differ in various places as some areas become virus hot spots while others are clear.

If that sounds familiar again, it’s because it is. The CDC and the White House both recommended guidelines for reopening the country back in May that included data-driven phases for restarting the economy. Unfortunately, these plans were generally ignored and forgotten as states rushed to reopen.

As a result, now we have to do the hard part of containing the virus again even as much of the country has pandemic fatigue. As the old saying goes, “pay me now or pay me later.” If you don’t take the time to do a job correctly in the first place, you often end up doing the same job again. That’s the case here. The country would have been much better off, both economically and in terms of lives lost, if we had handled the pandemic right the first time.

And we are going to have to redo the job of containing the virus. Forging ahead and going back to normal while the virus rages around us is not a viable option. President Trump is already trailing Joe Biden by double-digit margins based largely on voter dissatisfaction with the Trump Administration’s handling of the pandemic. If the president’s strategy continues to be to deny the reality of the catastrophe, he will lose in a landslide and in January the Biden Administration will enact the measures that Trump should have taken months earlier. The cost of waiting will be 100,000 or so dead, a depressed economy, and destroyed Republican credibility.

Am I concerned about the deficit and effect of adding trillions more to the national debt? Absolutely. But the pandemic is a legitimate national emergency whose impact is likely to be much worse than the impact of running up the national debt. If your house is on fire, you put it out before you worry about paying off credit card debt. 

At the risk of repeating myself, we can’t solve the economic crisis and get back to normal until we solve the Coronavirus crisis. We have to prioritize and tackle our problems one at a time. If we don’t address the pandemic first, we will be forced to deal with an even deeper economic depression plus the health problems of the pandemic at the same time.

If you would like to continue the discussion on social media, you can visit David Thornton’s Facebook page or follow him on Twitter.

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