Moneybox

Why We Might Not Get a Stimulus Bill Even After the Election

Yes, you read that correctly.

Mitch McConnell speaks into two microphones while standing in front of John Thune and some American flags.
Senate Majority Leader Mitch McConnell speaks to members of the media, as Senate Majority Whip John Thune listens, at the Hart Senate Office Building on Capitol Hill on Wednesday. Alex Wong/Getty Images

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Congress’ proposed next round of coronavirus relief funding went through a lot of phases: the HEROES Act, the HEALS Act, and last week, a “skinny” relief package that had been whittled down from $2 trillion or $3 trillion to a few hundred billion. None of these became law. Obviously, partisan delays in Washington aren’t new. But much of the country is still in a desperate financial situation. So why isn’t Congress passing anything? Well, according to Jordan Weissmann, Slate’s senior business and economic correspondent, Washington’s will to intervene has died down as the stock market has held and states have started reopening—even though a lot of people are still unemployed, suffering, and lacking benefits. On Wednesday’s episode of What Next, I spoke with Weissmann about Washington’s failure to act and why we might not even get a relief bill after the election. Our conversation has been edited and condensed for clarity.

Mary Harris: All the time, I see signs of personal financial distress. Then I listen to the news out of Washington, and there’s no sense of hurry to send help: Nobody’s rushing to bail out families and laid-off workers, or coming to prop up state budgets. It’s strange to me, because the crisis around us is not subtle. There was this article in the Washington Post last week about people who couldn’t afford rent and living in abandoned motels in Florida. And it seems like no one in Washington read it.

Jordan Weissmann: Even during “good” times in America, there is ghastly poverty. There’s always the question of how much economic cruelty is “tolerable.” And right now it seems like we have reached this place where people feel like it’s OK to play a game of chicken. On the Republican side, it seems like Mitch McConnell is mean-mugging the country, just coldly staring, saying, nope, sorry, it’s our $500 billion package that’s only enough to get you takeout, or it’s nothing.

Washington has been sort of trying to get more COVID relief off the ground for four months now. The first bill was that HEROES Act in May. What happened?

I think the technical term for what happened after the HEROES Act was passed is nothing. McConnell nodded sternly at it and proceeded to ignore the bill. There were obviously some heated negotiations between Democrats and the White House around the end of July, when unemployment benefits were beginning to expire. At that point, it became clear that there are some really unbridgeable gaps. One of the biggest sticking points has been aid to states. Democrats want to provide direct aid to help states fill the holes in their budgets, which are going to be quite large.

For good reason, because states can’t print money and they are really feeling the heat of the coronavirus crisis.

Absolutely. But Republicans think that this would be a “blue-state bailout,” that it would help out places that have not managed their pension obligations. It’s a bizarre, not very accurate, but very popular argument on the right. There was no room for compromise on certain issues, and it became this stare down.

Then Donald Trump decided he was going to try to act unilaterally. He came up with this plan to extend $300-a-week unemployment benefits, using funding that was left over in FEMA’s disaster relief account, money that you’d ordinarily use to help hurricane victims. He was going to use this for unemployment benefits—right before hurricane season.

I remember this because it was an executive order, and everyone saw it and thought, what do we make of this? Is this going to change things?

A few states have started to pay out the money, but it’s taken a while to even get it started logistically because states had to set it up from scratch again. And, as we all know from this crisis, every time states have to change their unemployment systems, it’s like they have to crank the car by hand.

It’s the kind of thing where it seems like what Trump did was probably not legal, but nobody cares because, in the end, he’s just going to get money to some people at the same time. He also went and announced an eviction freeze for everyone.

Through the CDC.

Right. This is another creative move. The CARES Act had included an eviction freeze on properties that had a federally backed mortgage or where the landlord received funding through some sort of federal housing assistance program, Section 8, any direct connection to the federal government and regulations. Trump just used the CDC’s power to quarantine people to announce there’d be no more evictions for financially troubled tenants with certain qualifications. This is really sweeping. The problem is that he’s just delaying evictions. He’s not actually doing anything about the rent that’s accumulating for people. And so housing advocates are worried that tenants are eventually going to be losing their homes whenever this is lifted, or are going to risk losing their homes whenever this is lifted in a few months.

Is there any data that that eviction freeze is working?

I think it’s a little early to judge. But I will say that the moratorium definitely had some holes in it, some cracks that people could slip through, because it required them to essentially file paperwork and invoke their eviction defense themselves. And if you’re someone who doesn’t have a lawyer and is facing eviction, you might have no idea that Trump put this moratorium in place, or you might have no idea about your rights. So I wouldn’t be surprised if we see some people kicked out on the street despite what Trump did.

So Trump used executive orders to try to lessen the economic pain caused by the pandemic. And after he did that, Republicans introduced another coronavirus relief package, a far less ambitious proposal than Democrats hoped for. Nancy Pelosi and Chuck Schumer wanted more than $2 trillion to be spent on relief. Senate Republicans said, how about $300 billion? This was a “skinny” relief bill.

And any time you hear something “skinny,” that’s a euphemism for the only thing Republicans could get all of their members to sign on to—the absolute minimal piece of legislation that they could squeak out from their completely disorganized conference. Democrats basically said no and they ended up getting blocked. It just didn’t have a lot of things that people are looking for in a relief bill at this point. It wasn’t really a serious piece of legislation. It was mostly a signal to Democrats that Republicans weren’t going to move in their direction—if anything, Republicans were going to move even further away and vote for a smaller bill than they had before. Like, this is how this is how little we care about what you guys want. The main point was to get Republicans to vote on something so moderates would say that they had at least backed *a* relief bill, regardless of what it actually contained, so that moderates like Susan Collins and Cory Gardner could go back and say to voters, look, I’m trying to do something, but it’s Democrats who are stopping us from passing any more relief.

No one looks good here. I don’t understand how lawmakers can get away with it.

The issue is that right now the Democratic base doesn’t want Republicans to be able to dictate terms whenever there’s a crisis like this. And the thinking among Republicans seems to be that their own voters are getting worried about all the money that’s being spent and that we could see this revival of Tea Party fervor. All those austerity advocates first emerged around 2009 and 2010, when the economy was still bleeding from the financial crisis. It’s like we are back at that point. So it’s very easy to see how all the budget hawks might fly back out right now, and you can imagine the GOP discovering their inner fiscal conservatives once again. I think that’s part of the concern among Republicans, that they don’t want to risk getting primaried by some guy in a tricorn hat. They don’t want a replay of 2010. That’s why we’re in this place where there’s not much political incentive on any side right now to strike a deal before the election. They keep saying there won’t be a deal before November, and frankly, I don’t see how we’re any closer to a deal after November unless, maybe, at that point Democrats would say screw it.

You talk about lawmakers being haunted by the ghost of 2010. I guess I do see that. But it seems like it’s so different this time. This time it’s like, why would you not want schools to work? Why would you not want the busses to run? And why would you not want city services funded?

I think there’s also this desire to minimize the extent of the crisis we’re still in. That’s been a theme throughout the past six months, that the GOP has wanted to play down the extent of the problems we are now facing. And part of that is not admitting that we need to provide more relief than Republicans are currently offering.

I’ve been struck by the fact that the stock market is bumping along and seems to be doing OK in spite of a lot of economic pain out there. Can you articulate what the stock market is actually capturing and why it might not be showing everything that’s happening in the economy right now?

The thing to keep in mind is that the stock market is not the whole economy. When you look at the big index indexes, like the S&P 500, those are driven in large part by the tech industry, and the big companies are doing just fine. Service workers are being slammed by this upstairs-downstairs recession we’ve got, where white-collar employees are back at work or working from home, while people who were employed at restaurants or movie theaters or concert venues can’t go back to their jobs.

Congress is not going to move until the stock market crashes, because that’s the kind of thing that scares the hell out of Donald Trump and scares the hell out of people on the Republican side.

If that metric isn’t capturing so much of the economy, then why is it the metric that’s so important to lawmakers?

Because it’s highly visible. And again, Trump cares a lot about it. When the stock market is crashing, rich and upper-middle-class people get upset. It adds to the sense of panic. It creates a lot of terrible headlines. I think we’re at this weird point where the market can keep going because big companies feel like they are still making profits.

What’s weird is that if you read statements from financial analysts and banks, they all seem to be assuming that another rescue bill is coming. There’s this faith that eventually Congress will get its act together and pass some sort of trillion-dollar relief bill. And it’s not clear where they’re getting that from. Nobody in Washington is like, yeah, this is a sure thing.

It’s circular logic: The stock market is buoyed because it thinks a stimulus is coming, and Congress isn’t doing anything because the stock market is buoyed.

You need investors to have a moment and notice that Chuck Schumer and McConnell are not getting along and Nancy Pelosi has kind of had it with the whole thing. I find this all a little depressing because I think a lot of people don’t understand that what happened after 2008 was a depression, right? The economy took 10 years to recover for a whole host of reasons. It wasn’t the Great Depression—it wasn’t the complete collapse of society that we saw in the 1930s. But it was a depression in the sense that it was an extended period of the economy working below its potential.

So do you think that we now can’t recognize a depression when we see it?

I am worried that we are used to mediocrity. We are used to “meh.” And as a result, a lot of people are going to suffer.

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