Moments ago, the U.S. Senate voted 96-0 to pass a massive emergency relief package that will probably cost somewhere close to $6 trillion. While that $6 trillion figure looks awfully huge, will it be enough to counter the damage that COVID-19 and the novel coronavirus are wreaking across the board? Let’s take a closer look at this bill to find out.
9:00 PM UPDATE: The Senate voted 96-0 to pass the bill.
We are living in unprecedented times. But that doesn’t mean that this is a time for fear. I’ve seen over and over again that when things get difficult, people pull together. I’m proud that across the Silver State, people are doing their part to reduce the impact of COVID-19. Here in the Senate, I’m working around the clock to protect the health, safety and economic wellbeing of Nevada’s workers, businesses and families and to make sure the Silver State comes out of this crisis even stronger.
Posted by Senator Catherine Cortez Masto on Wednesday, March 25, 2020
The final Senate vote to pass the bill itself occurred after a group of Republicans attempted a last-minute amendment to weaken the unemployment insurance provision of the bill (see below), but their amendment failed on a near party-line 48-48 vote.
Before the votes, U.S. Senator Catherine Cortez Masto (D) took to the Senate floor to explain her support for the bill (see above). And just after the final vote, she and Senator Jacky Rosen (D) declared in a joint statement, “Nevada’s workers, families, and small businesses will receive relief in the form of small business loans and emergency grants, four months of additional unemployment insurance, and direct financial support to help families get back on their feet. In addition, this package includes funding, financing, and tax relief to help Nevada’s travel and tourism industry, so that Nevadans can get back to work.”
The bill now moves to the House, where a final vote in that chamber is expected Friday.
Here’s what Democratic and Republican leaders are settling on.
As noted above the fold, the Senate is preparing to pass what’s expected to be the final draft of this “Phase Three” package on a big, bipartisan vote. The bill will then move to the House, where Speaker Nancy Pelosi (D-California) has been trying to arrange for passage by “unanimous consent” in order to expedite its arrival onto President Donald Trump’s desk.
But with House arch-conservatives complaining about its nearly $6 trillion cost, and with the House’s most progressive members, such as Rep. Alexandria Ocasio-Cortez (D-New York), voicing concern over the bill’s special relief provisions for companies like Boeing while holding back on direct aid to individuals, it remains to be seen whether Pelosi and House Republican leaders can prevent any objections to derail an extra fast passage via unanimous consent.
But since all the top Democrats and Republicans are coalescing behind the Senate bill, it’s now a question of when, not if, this nearly $6 trillion coronavirus relief package becomes law.
So what’s in it?
In his announcement of a new directive to prevent gatherings of ten or more people in public spaces yesterday, Governor Steve Sisolak (D) again stressed that the State of Nevada and Nevada hospitals have limited amounts of space (as in, hospital beds), medicine, and other critical medical supplies. Congress’ new coronavirus relief package includes $150 billion for hospitals to treat COVID-19 patients and restock on needed supplies. The coronavirus relief bill also includes $150 billion for state and local governments, and this state and local relief fund specifically includes $30 billion for public schools, $25 billion for public transit, and $30 billion in additional disaster relief funds for state, municipal, and Native American tribal governments.
Speaking of public services, Democratic leaders succeeded in securing an “unemployment insurance on steroids” provision that will deliver $600 weekly payments for four months for those who have lost work pay, including “gig economy” workers, furloughed workers, and freelancers. In addition, the bill includes a 15% increase in the basic SNAP benefit level to assist those facing food insecurity. Also, the bill now includes $10 billion in Small Business Administration (SBA) emergency grants and an additional $17 billion for the SBA to provide assistance to small businesses that have already drawn SBA loans, and new SBA loans under this program will be forgiven if no staff are laid off.
On top of that, Democratic and Republican leaders ultimately agreed on $1,200 one-time “corona checks” for adults who reported under $75,000 (per adult) in 2018 taxable income. The “means test” that limits direct aid for (formerly?) higher-income households is drawing some opposition from those on the left who favored a full and more robust UBI, and its structure is drawing additional criticism for excluding some people with disabilities and immigrant families.
And what’s being left out?
So if the draft of the coronavirus rescue bill I'm seeing is close to final, it looks like 1) a guarantee of all bank deposits + bank debt; and 2) $500B in corporate bailouts, which can be leveraged to support $4 – 6T in lending, has about 30 pages to it. 30 pages is… not a lot
— Amanda Fischer (@amandalfischer) March 25, 2020
While Democratic leaders did secure some oversight into the corporate relief provision with an initial cost of $425 billion (alongside another $75 billion specifically marked for Boeing, the major airlines, and other select companies), the final cost will likely balloon to nearly $4.3 trillion once the Federal Reserve launches this leveraged lending program. While Democrats secured language that prohibits stock buybacks for the duration of the loans and prohibits Trump, high-ranking administration officials, and members of Congress from (directly?) profiting off this leveraged lending program, recipients can still use this money to boost executive pay, pursue corporate mergers and acquisitions, and pay dividends to stockholders without facing any requirement to keep workers on their payrolls.
This corporate leveraged lending program will have an inspector general and a five-member oversight board, and that appears to be all the oversight this program will get. This stands in stark contrast to the last-minute attempt by a clique of Republican Senators to “fix a drafting error” with the expansion of unemployment insurance.
The Fed presumably won't have this kind of trouble speeding relief to corporations https://t.co/0jEe7GjvE6
— David Dayen (@ddayen) March 25, 2020
Yet while large corporations are about to benefit from this $4.3 trillion leveraged lending program, they won’t have to return the favor in terms of paying workers more livable wages, offer workers any voting power on their corporate boards, provide them with paid sick leave, or even promise them they won’t be laid off. Meanwhile, the state and local government aid package likely won’t be enough to cover the entirety of their oncoming budget deficits, let alone further expand health insurance coverage to cover the growing pool of Americans who are losing their health insurance or need more than what their current “junk insurance” plans offer.
So long story short(-ish?): There are certainly provisions in this nearly $6 trillion coronavirus relief package that will ensure some relief in America’s hour of need, but this does look like a repeat of Great Recession era mistakes in directing the bulk of the aid to companies that need it the least while short-changing the people, governments, and other entities who need it the most.