Can Congress Save the Economy?

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S1: I called up Slate’s Jim Newell and asked him to tell me a little bit more about Washington in a time of social distancing.

S2: Well, he’s from the the one day that I spent on the Hill last week. Reporters tried to stay six feet away and Sarah tried to say six feet away. But it sort of collapse as people were trying to get information. You know, if you give us senator six feet, then they’re going to run away.


S3: So I think as senators negotiate their third coronavirus bill of the month, this one with an almost impossibly high price tag. Jim’s noticed these legislators getting stuck. On the one hand, their work is more urgent than ever. Another, they’ve got these habits.

S2: They have a little trouble just, you know, not being backslapping good ole boys, so they get right up to each other’s faces. And I think today it’s Sunday afternoon, we’re seeing what the ultimate result of senators not taking social distancing serious enough was where we have Rand Paul, who now has tested positive for their crony virus, having gone to the Senate gym and swimming pool this morning while he was waiting on his tests.


S4: So and that guy’s a doctor, right?

S5: Well, that’s where we are. And now they’re trying to close out this third bill, which is enormous. And, you know, at the same time, there are worrying if they should all be going home right now.


S4: Yeah. I mean, passing the bill to me seems to rely on getting a lot of at risk people in one room at once to breathe on each other.

S6: You know, I was thinking maybe I should go back up tomorrow on Monday as they try to vote on this bill. But I don’t know if I’m going to do that anymore just because it’s a petri dish.


S7: Just because it’s a nest of corona virus up there is my interpretation of it. You know, you walk in the door and a corona virus in a tuxedo greets you pretty much.

S8: That’s that’s what it’s become today on the show. The latest coronavirus legislation is turning out to be the most contentious. So far, the Democrats, they’re not giving in. Well, a handful of Republicans have self-quarantined these lawmakers. They are working on a tight timeline. I’m Mary Harris. You’re listening to what next. Stick with us.

S1: In the last three weeks, Congress passed a bill to support health care workers dealing with coronavirus. Then a second bill to increase testing, access Medicaid and food benefits. Now they’re negotiating another bill to do everything else. And each piece of coronavirus legislation has been more expensive than the last. Can you just contextualize this third bill? Like how much money are we talking about spending at this point?


S5: So right now we’re looking at, you know, it could be around two trillion dollars in spending. And if you put that in context, you know, the stimulus bill that the Obama administration passed in 2009, that was about eight hundred billion. So this is going to be the largest piece of stimulus in history. And the entire discretionary budget of the federal government is about 1.3 trillion a year.


S9: So it’s it’s huge.

S4: So it’s like a whole nother budget. It’s like doing the American government like one more time this year.

S5: Yeah, it’s a whole nother budget and a half. And, you know, there are probably people out there who don’t think it’s going to be enough.


S8: I mean, this is just to get through a few months to understand where the country is right now in battling this pandemic. Why this bill is necessary. You’ve got to confront some pretty grim statistics. The number of confirmed cases keeps climbing. Sort of the deaths.

S10: Health care workers are begging for basic medical supplies and lawmakers in Washington are under a ton of pressure to respond.

S11: Let’s just talk about exactly what’s on the table and what Democrats and Republicans are agreeing on. And then what’s the sticking point? Because last week we saw, you know, sort of the beginnings of this where, OK, maybe we can all agree to send some kind of check directly to Americans. And people seem to kind of wrap their head around that. And then we started talking about the idea of offering small businesses loans and we talked about the idea of maybe giving bigger businesses some kind of bailout. So what are the key points right now?


S5: So the way it’s shaping up in the way the Senate is doing this is you have these sort of pods that are breaking apart and doing each section. So, you know, the main things are there’s going to be a big expansion of unemployment insurance. There is going to be a 300, 350 billion dollar loan and grant program for small businesses. There’s going to be over 100 billion boosting hospital capacity and sorting through their needs. There is going to be a section of direct payments to tax filers. So it looks like everyone’s going to get about a. Twelve hundred dollar one time check up to people making about one hundred thousand dollars a year. And then there’s also in what’s we got to be the most difficult is this very large fund for shoring up large corporations. OK. So what is this? Yeah. So this is well, it’s a system of either loans or depending on how corporations use it, grants to help large corporations and especially really distressed industries like airlines and hotels prevent them from going bankrupt essentially. And this is a pot of money that’s grown as of the last I heard from a couple of sources, it’s now up to five hundred billion dollars. And this is becoming really controversial because there aren’t a lot of strings attached, or at least there aren’t enough strings attached for Democrats to feel comfortable. So a lot of this money is really left up to the discretion of Steve Manoogian, the treasury secretary, to dole out as he sees fit. So you have Democrats calling it a $500 billion corporate slush fund, which, you know, it’s not entirely off the mark. I mean, there are some things that, you know, Democrats would like to see with some some guardrails around this this huge fund, you know, that has to be used on salary or that corporations can’t use them on stock buybacks or or bonuses for bonuses. Yeah. Or executive compensation is restrained. Take, for example, the the buyback restrictions. There are buyback restrictions. But those can be waived by Steve Manoogian. And I also think Democrats, I think reasonably are worried that if you give this administration, which is not always the most ethical, $500 billion it could go to. You know, Steve Venusians friends are Donald Trump’s friends. So I think they’re looking for that language to be, at the very least, tightened a little bit. That was the source of the delays on Sunday afternoon.


S4: And it’s funny because Steve Manoogian, the person who’s being debated here, is like the overseer. He’s one of the people negotiating this. So it’s just a funny circumstance.

S5: I mean, it does remind me of, you know, 2008 when they were working on the bank bailouts. You know, it’s just the way it’s presented from the treasury secretary. Was Hank Paulson at that time was I need 700 billion dollars at my discretion to save the economy. And so, you know, as Congress, you sort of have a pretty big obligation to make sure that there are some restraints put on that. But, you know, the way Republicans are saying is, well, Democrats, we gave you expanded unemployment insurance. We gave you a lot of money for hospitals. This is what we want. So you know why? Why can’t this issue be a fair trade?


S4: And that’s that’s sort of where they’re stuck right now, using that 2008 bailout as kind of an analogy. What happened after 2008? Can you tell that story a little bit? Because my understanding is that after 2008, you know, about a year and people said, hold it. Is there any accountability here? And the banks said, no, sorry.

S12: Yeah. I mean, I I I have to brush up on those. A lot of those details. But, you know, there was not. They eventually just got hundreds of billions of dollars to use at the secretary’s discretion. And there were some good provisions there, like the government could take equity stakes in the companies so they could make up some of the money. So like on a financial sense, it actually worked out. The government made a little money off of the off of the TARP bailout, but it was still, you know, a big moral hazard issue where you have these companies in that sense where they made these horrible decisions that took down the economy, but they had this backstop of the government. I mean, this one is a little different. Where? We have the government sort of shutting down the economy, so it’s not these companies, the money because of bad decisions they made. But. You know, they’re not completely off the hook. They could have taken some of their hundreds of billions in dollars in profits and put aside for a rainy day fund or something like that. So there is the government does have the ability to ask for some restraints here.


S13: How do you think this is all going to play out? I mean, we’re speaking on Sunday afternoon. The latest reporting is that the House is going to write their own bill. The Senate is trying to negotiate their bill. It just seems like a cluster.

S6: You know, I I’m not entirely sure what’s going on with the house. Look at the way Mitch McConnell strategized this out. So the House a week ago, they passed their their quote unquote, phase two bill, which is one hundred billion dollars. You know, some modest paid leave provisions, SNAP benefits, and then they leave town. And so then Mitch McConnell and the Senate come back into town and they know there’s going to be a stimulus needed. So he takes it upon himself to write it on his terms while the house is gone. And now that becomes in the popular imagination, the bill that has to pass, you know, so classic it’s cause. And I mean, it’s smart, you know, like from his perspective, you snooze, you lose, man.

S2: Yeah. And the house, you know, says they’ve been working on stuff and there have been proposals coming out, but they’ve they’re not here.

S5: So that’s not getting the coverage. So I don’t really you know, I don’t know if the bill that Nancy Pelosi, who just flew back yesterday and is now, you know, talking about their own House bill. Maybe they’re just going to release something to pressure Republicans a little bit.

S9: But it seems like the Senate bill is the the train that’s leaving the station here. And I think Pelosi still knows that. You know, she needs to work through Schumer to get the changes she wants because this can’t go this can’t go another 10 days, two weeks. It like unemployment claims, are already through the roof. I mean, the money needs to get out the door.


S11: You know, you mentioned how Nancy Pelosi passed this bill in the House, Senate it to the Senate and then folks got out of town. Do you think the Democrats are misplacing their hand here?

S6: I think I mean, we’ll see how this bill ultimately turns around, but. I did think early in this week I really didn’t know what they were doing. They left and they ceded the stage to Mitch McConnell and also Republicans at the beginning of the week seems to be the ones who had the most robust policy ideas. They were the ones who are putting into the conversations, cutting checks to the American people. And, you know, Democrats sort of had to scramble a little bit. But as time went on, I think things look a little bit more familiar. I think that what Chuck Schumer has fought for in the Senate bill, a huge expansion of unemployment insurance and a huge expansion of funds available to hospitals. I think both of those things are ultimately more important than the one time 1000 dollar check.

S9: I think that the final product that comes out of this stimulus is going to reflect a lot of pretty hard Democratic negotiations for, you know, just individuals who are suffering through this.

S11: It is funny, though, that the thing most people will see, most regular people, most voters, frankly, will see, though, is those checks which, as you said, came from Republicans.

S9: Yeah, I think the unemployment insurance could be the bigger thing just because I mean, layoffs are absolutely you know, they’re staggering now. They’re talking about you have three million a week or something like that. And I have to see what the final details are. But if you can get unemployment insurance, you know, near full salary for an additional 13 weeks and in a way that covers gig economy workers, I mean that in the long run, maybe that will prove more meaningful to people than the check they get first and never again. But we’ll see.

S11: So I was watching C-SPAN today as the Senate was continuing to sort of talk about whatever they’re going to do with this bill. And I was struck by Joe Manchin of West Virginia, who’s a Democrat, but he’s one of those swing votes. And he got up and he said something that I thought was really true, which was, you know, we’re talking about all of this money to bail out big companies and individual people. This is basically an economic stimulus package. But this is at its root, a public health crisis, and we have to address that because the public health crisis doesn’t go away. It doesn’t matter what we do to bail people out.

S14: Wall Street will not return. I can assure you, no matter how much money we throw. Wall Street, it is not going to have confidence built into it as long as a virus is out there without any type of a treatment or a vaccine coming down the pike, that’s going to cure and protect us. That’s what this is all about.

S11: And I thought that was right on. And I wonder if you think Washington is doing enough that the public health crisis level?

S15: It seems hard to say that they are right. I think. I think that that’s not being, you know, left behind or anything in these negotiations. I I think that there is a lot of work going on on the health element of this bill and we’ll see what’s finally out there. But there’s also a lot of pressure, you know, on the Trump administration still to make sure there are enough tests out there to make sure there’s enough ventilators and masks and all this equipment that’s needed to make sure that there’s hospital capacity.


S4: And we still don’t know if we’re using the Defense Production Act. Do we know?

S15: We have no idea. Well, it’s absurd. I mean, he’s. He says, yes, I’m doing it. But then you ask anyway, I’ll say ministration said, no, it’s not being used yet. You know, sooner or later, he’s going to have to, I think just because of the number of cases and all this talk now about. This system is really close to overwhelmed.

S9: You know, Congress can pass a lot of money and try to appropriate as many resources as they need to. But there needs to be a. You know, the administration needs to turn the corner here a little bit. And if it needs to just order factories to produce what’s needed. That seems to be where we’re headed, but we’re not quite there yet.

S16: You laid out so clearly at the top of this interview how massive this stimulus is as big or bigger than like the annual federal budget. Do you think this is the last stimulus? No.

S17: I think this package is designed to get through the next few months. So if situation still isn’t pretty. And there still isn’t, the coast isn’t clear enough to let businesses come back open and let people go back into work, then, yes, something else might be needed. But I you know, Manoogian has been saying pretty clearly that this is about the next few months.

S13: Jim Nual, thank you so much for joining me. Thank you.

S10: Jim Nual is Slate’s senior politics correspondent.

S1: After we finished recording this interview, negotiations in the Senate hit a wall. Democrats voted down Mitch McConnell’s stimulus plan, saying it just didn’t go far enough.


S18: The legislation has many problems at the top of the list. It includes a large corporate bailout with no protections for workers and virtually no oversight. Also very troubling in the bill were significant shortfalls of money that our hospitals, state cities and medical workers desperately needed. This is a public health crisis. It is inexplicable to skimp on funding to address the pandemic.

S1: McConnell appeared visibly angry when he took to the floor to say Democrats were obstructing for no reason.

S19: So we’re fiddling here, fiddling with the emotions of the American people, fiddling with the markups, fiddling with our health care.

S20: The American people expect us to act tomorrow. And I want everybody to fully understand.

S21: If we aren’t able to act tomorrow, it’ll be because of our colleagues on the other side continuing to dicker when the country expects us to come together and address this problem.

S22: Negotiations are expected to pick back up Monday.

S23: And that’s the show.

S22: What next is produced by Maura Silvers, Jason de Leon, Mary Wilson and Danielle Hewitt. I’m Mary Harris. Find me doing the day at Mary’s desk on Twitter. I will catch you back here tomorrow.