Politics

The Money Cure

With Trump at the helm, Republicans rediscover economic stimulus.

Mitch McConnell speaks at a podium at a press conference
Mitch McConnell at the U.S. Capitol on Tuesday. Alex Wong/Getty Images

“This is clearly a different situation,” Tennessee Sen. Lamar Alexander said Tuesday afternoon, following a meeting with his colleagues. “We’ve had occasions when the economy has shut itself down. But we’ve never had one where the government has deliberately shut it down. And we have a responsibility.”

Inside the meeting room in the Russell Senate Office Building, Republican senators and administration officials, like Treasury Secretary Steve Mnuchin, were outlining the first steps of what’s being called “phase three” legislation addressing the coronavirus pandemic. This is going to be the big one, landing somewhere in the neighborhood of $1 trillion in spending to help suffering individuals, businesses, and industries as economic activity comes to a halt to contain the pandemic. The Senate plans first to pass the House’s roughly $100 billion “phase two” relief bill in the coming days while simultaneously drafting the next one.

Republicans are discussing ideas not typically discussed by proud small-government types who believe in letting markets run their course and wreak carnage where they may. That includes some measure of cutting checks to Americans to make ends meet.

Utah Sen. Mitt Romney made a splash on Monday when he said that “every American adult should immediately receive $1,000 to help ensure families and workers can meet their short-term obligations and increase spending in the economy.” The belief spread beyond this one well-known traitor to the movement. Arkansas Sen. Tom Cotton, a conservative ally of Trump’s, also put forth a plan to cut $1,000 checks to each American tax filer earning less than $100,000 annually, with tack-ons available for dependents. By Tuesday afternoon, Republicans were talking about how cutting checks to lower- and middle-income Americans was a proudly conservative idea.

Indiana Sen. Todd Young, a member of the Republican leadership, said he was open to the “bold” idea, citing such conservative movement legends as Milton Friedman and Charles Murray for having developed similar ideas. (He threw in Andrew Yang, the former Democratic presidential candidate who organized his campaign around sending monthly $1,000 checks to each American, when a reporter mentioned his name.)

The simplicity of the proposal—or the image of Americans receiving $1,000 checks in the mail signed by “DONALD J. TRUMP”—has caught the president’s attention, at least for the moment. On Tuesday, he backed off of his push for a payroll tax holiday, which had no traction on the Hill, and his administration signed up for check-cutting instead.

“We are looking at sending checks to Americans immediately,” Mnuchin said Tuesday. “Americans need cash now, and the president wants to get cash now—and I mean now in the next two weeks.”

At least some Senate Democrats, recognizing that sending checks to working people should be their jam and not Republicans’, have gotten behind a bolder proposal to release $2,000 checks to adults and dependents (up to a certain threshold) and subsequent payments depending on the duration of the crisis.

Whatever the specifics of the checks turn out to be, there is bipartisan interest in moving $1 trillion out the door as quickly as possible, with extraordinary measures for doing so being put on the table by Republicans and Democrats alike. This is not how the debate over the last major economic stimulus—the roughly $800 billion American Recovery and Reinvestment Act of 2009, more commonly known as “The Stimulus”—went. The price tag on that bill was pushed down from what economists recommended, in the name of the need to win broad backing. These efforts to make the relief effort as widely acceptable as possible earned the popular new Democratic president, Barack Obama, zero Republican votes in the House and three in the Senate.

So where’s all the enthusiasm for trillion-dollar stimulus coming from now? Several Republicans, like Alexander, made the distinction that these are different crises—that the financial crisis and the resulting economic fallout were the result of economic actors making poor decisions. Here, the economy was humming along just fine until some disease swooped in.

“We’re not talking about businesses here that make bad decisions and are asking to be bailed out,” Rubio said. “We’re talking about a virus. We’re talking about an effort to control the virus that requires us to tell businesses to close, and people not to frequent them, in order to save lives. That is an extraordinary development. This is not an economic downturn, this is not some … normal event that happens in the cycle of an economy.”

Sure. But also, come on.

We cannot ignore the trend of seasonal Republican Keynesianism that exists only when Republicans are in the presidency.

The 2008 stimulus that President George W. Bush signed into law—before the collapse of Lehman Brothers, and before the crisis was in full swing, and with no public health emergency behind it—cut checks of $300 to $600 to individuals, with barely a peep of dissent in either chamber.

During the Obama presidency, meanwhile, the cost of the ARRA scared nearly 100 percent of Republicans away from supporting it—even as individual members would go on to hold groundbreaking ceremonies for the projects it would fund—and Republicans’ anti-spending panic brought about the 2011 Budget Control Act, introducing discretionary spending caps for the next 10 years.

Once Trump was in office, the spending caps were increased by hundreds of billions of dollars, and then eliminated permanently when Democrats retook control of the House this Congress. And now it’s check time again.

This arrangement of separation of powers—a Republican president, especially this one, and especially in an election year, combined with a Democratic House—seems to be the only one under which lopsided, bipartisan votes in favor of economic stimulus are “allowed.” It’s great that Democrats, when they’re out of the White House, aren’t willing to take down the economy to inflict political pain on their opponents. It would be even better if Republicans were held to the same standard going forward.