What Ever Happened to More Stimulus?

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S1: The next round of coronavirus relief funding has gone through a lot of different names. First there was a Heroes Act, then the Heel’s Act. Eventually last week there was a bill, many just called the skinny relief package. That’s because it had been whittled down from two or three trillion dollars to a few hundred billion. But something none of these bills is going to be called is a law. How many weeks, months have folks in Washington been trying to pass a coronavirus relief package at this point, a new one?

S2: Well, it depends who who is trying. Is our how are we going to define trying?

S1: Jordan Weissmann covers the economy for Slate. He’s been watching this back and forth from the beginning.

S2: I recently called up some member or emailed some members of Congress to be like, is there any chance this bill would get a vote on its own, maybe as part of not a giant package? And they didn’t even respond. They’re just like, oh, you sweet, naive summer child.

S1: Partisan delays in Washington aren’t exactly new, but Jordan says to understand why this legislation is getting stuck, you just have to go back to March or April, the beginning of the pandemic.

S2: Early on in this crisis, we were making comparisons to the 1930s. Right? I mean, people just were people were freaking out. And in the end, the absolute most dire predictions did not come to pass. Instead, states have sort of gone and gradually reopened. And we’ve seen many kinds of jobs return.

S1: As the panic died down, so did Washington’s will to intervene.

S2: The rate of unemployment we have at this point is not so bad that Republicans feel like it’s an urgent crisis that needs to be addressed with some sort of bill or they’re all going to lose their jobs. And at the same time, it’s not so bad that Chuck Schumer and Nancy Pelosi feel like they have to compromise and just accept something, they don’t feel the need to just ask Republicans for whatever they can get to help people, because it’s we’re in this weirdly sort of almost tolerable environment, even though a lot of people don’t have jobs and are suffering and have had their unemployment benefits cut today on the show.

S1: The story behind Washington’s failure to act. I’m Mary Harris. You’re listening to what next? Stick with us. I’ve been having this strange experience lately, I walk around my neighborhood and see signs of financial distress, businesses shutting down, leaving little notes taped to the window, explaining how the owners didn’t want it to be this way, or people selling their personal belongings on the sidewalk. Over the summer, a museum down the street from me turned itself into a food pantry, actually, every Monday. Now they’re distributing groceries. But then I’ll listen to the news out of Washington. And it’s not like there’s a sense people need to hurry up and help. No one’s rushing to bail out families or laid off workers. Nobody’s coming to prop up state budgets. And it’s weird to me because the crisis around us is not subtle. Jordan and I both read this article in The Washington Post last week, it was about people who couldn’t afford their rent, so they were living in abandoned motels in Florida.

S2: Even in the good times in America, there is there is just ghastly poverty. And The Washington Post visited one of these kind of roadside motels in Orlando, really near Disney, where a lot of very low paid service workers make their homes because they can’t afford normal apartments or they can’t get someone to rent them because they have bad credit. All these workers who who are usually employed in restaurants or somewhere like Disney or bars all of a sudden can’t get a paycheck. The local economy has sort of crumbled. And so they are living in literally abandoned motels where the power is being shut off and trash is just accumulating and it’s just human misery. It was it was it was one of those articles. It’s really, you know, shocks the conscience. So when you read it, I said, yeah, there are parts of the country and a lot of the country and where things are not great.

S1: I mean, this article that we read was in The Washington Post and it just feels like no one in Washington read it.

S2: I mean, it’s 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 eat, to play a game of chicken. And to some extent, I understand that Democrats feel like if they give into a if they give in now, they will never be able to negotiate with Republicans again. Like it’s they’re going to be in a weak position from here on out. And if they can’t get aid to states which they desperately want, the assumption going into talks from this point forward will always be that Democrats will cave. But on the Republican side, it just seems like Mitch McConnell is mean mugging the country, just staring, you know, just coldly staring, said, nope, sorry, it’s our five hundred billion dollar package. That’s enough to get you take out or it’s nothing.

S1: Let’s do just a quick tick tock of how we got here, because Washington has been sort of trying to get more covid relief off the ground for like four months now. Sort of. The first bill was that Heroes Act in May. What happened?

S2: Well, I think the technical term for what happened after the Heroes Act was passed is nothing. That was things. Mitch McConnell nodded sternly at it and proceeded to ignore the bill. There are obviously some heated negotiations between Democrats and the White House at the end of July, beginning of August, when unemployment benefits were beginning to expire, are were set to expire and at that point expire and they did expire. At that point, it just became clear that there are some really unbridgeable gaps between the two sides. One of the biggest sticking points has been aid to states. They you know, 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 coronaviruses crisis. Absolutely. But Republicans have decided that this would be a, quote, blue state bailout, that it would help out places that have not manage their pension obligations well, which is it’s sort of a bizarre, not very accurate, but very popular argument on the right.

S3: They want a trillion dollars to bail out badly run Democrat cities and states, whether it’s New York or Illinois or others. They want to bail them out. And we’re saying, well, we’re not going to pay that kind of a price in order to bail the city. That will do something to help cities, but that’s going to have to rest on its own.

S2: There was just no room for compromise on certain issues, and it became this stare down. And then Donald Trump decided he was going to try and act unilaterally. He came up with this plan to extend three hundred dollars a week unemployment benefits, using funding that was left over in like in in the FEMA’s disaster relief account. Basically money that you would ordinarily use to help like hurricane victims you can use for unemployment benefits right before hurricane season, right before hurricane season.

S1: And I remember this because it was an executive order and it was done over the weekend, in the summer. And everyone just sort of saw it and thought, what do we make of this? Is this going to change things, not change things?

S2: Yeah, and it’s I haven’t checked recently how many states are even have started to pay out the money? A few have, but it’s just taken a while to even get it started logistically because states had to kind of 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, essentially, like, you know, like Fred Flintstone, like pedaling with their feet. Yeah. I mean, it’s it’s really analog, but it’s the. Kind of thing where it seems like what tripped is probably not legal, but just nobody cares because in the end he’s just going to get money to some people. At the same time, he also went and unilaterally announced a eviction freeze, like for everyone, just like before, you know, the CDC through the CDC. This is another creative move that, again, is I haven’t actually seen if there’s been a challenge to it yet. Everyone kind of assumed there would be a lawsuit. But the Carers Act included a eviction freeze on properties that either had a federally backed mortgage or if the landlord received funding through some sort of federal housing assistance program, like Section eight things where there was where there was a direct connection to to the federal government, federal regulations. Trump just used the seized power to quarantine people to announce there would be no more evictions for financially troubled tenants with, you know, certain qualifications. And again, it was 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 very 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.

S1: Is there any data that that eviction freeze is working?

S2: I think it’s a little bit early to judge. One of the main sources of information about eviction filings nationally is this project out of Princeton called Eviction Lab. It’s run by Matthew Desmond, you might know is the author of Evicted as kind of a book that shines a light on the national eviction crisis. And their latest data is for literally the week, I believe that the eviction moratorium was announced. So it might be a little bit tricky to see its effects. And in their numbers, we’re going to have to rely on anecdotal evidence for a bit. What I will say is that that moratorium definitely had some some holes in it, some cracks in it that people could slip through because it required people to essentially like file this paperwork and invoke like this eviction defense themselves. And if you’re a person who doesn’t have a lawyer and a lot of people who are facing eviction do not have any kind of counsel, you just might not know about it. Right. Like your landlord might try to evict you and you might have no idea that Donald Trump put this moratorium in place or you might have no idea how to try and invoke those rights. So I wouldn’t be surprised to see some people kicked out on the street despite what Trump went and did.

S1: 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 had hoped for. Nancy Pelosi and Chuck Schumer. They’d wanted more than two trillion dollars to be spent on relief. Senate Republicans said how about 300 billion? This is that skinny relief bill.

S2: At any time you hear something skinny, that’s a euphemism for the only thing that Republicans could get all of their members to sign on to the absolute minimal piece of legislation that they would be that they could squeak out from their completely disorganized conference. You know, Democrats basically said no and they ended up getting blocked. They just didn’t have a lot of things that people are looking for in a relief bill at this point and certainly not Democrats.

S1: Yeah, it was funny because, I mean, you you’ve mentioned this how, like originally the White House was fighting for these twelve hundred dollar stimulus checks, which seems like one of those things that if the White House wants it, people definitely want it. But that got nixed from this. And then instead, there are all these sort of funny gimmes for places like Maine and Alaska.

S2: Yeah, like fishery, like fisheries. Get some get a little boost from it. And rare earth mineral mining gets a little lift in the bill and that helps out Murkowski and Collins. But I think it wasn’t really a serious piece of legislation. It was mostly a signal to Democrats that that, you know, Republicans weren’t going to move in their direction. If anything, Republicans were going to move even further away and vote for an even smaller bill than they had before. Right. 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 that moderates would say that they had at least backed a a relief bill, regardless of what it actually contained, so that moderates like Collins and Cory Gardner in Colorado could go back and say to his voters, look, I’m trying to do something. It’s Democrats who are stopping us from passing any more relief.

S1: No one looks good here. I mean, I don’t understand how lawmakers can get away with it.

S2: The issue is that right now there’s no real sign that Democratic voters are clamoring for their leaders to. Give in, if anything, the base wants the opposite, they don’t want them to give in, they don’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 kind of revival of Tea Party fervor, especially as it seems like the economy is kind of getting better. And remember, the Tea Party first emerged that the Tea Party and all those austerity advocates first emerged around 2010, 2009, when the economy was still, you know, just bleeding from from from the financial crisis. Right. It’s like we are sort of back at that point. So it’s very easy to see how all the budget hawks might might kind of fly back out right now. And you might you might suddenly you can imagine the GOP discovering GOP and some of its voters discovering their inner fiscal conservatives once again. So I think that’s like the that’s part of the concern among among Republicans is that, you know, they have to they they don’t want to risk getting primaried by some guy in a tri corner hat again. So they don’t want a replay of 2010. And so, yeah, that’s that we’re in this place where there’s just not much political incentive on any side right now to strike a deal before the election. And frankly, I don’t know, they keep saying there won’t be a deal before November. I don’t see how we’re any closer to a deal after November unless maybe at that point Democrats just say screw it. I don’t know.

S1: I don’t know. You talk about them being haunted by the ghosts of 2010, and I guess I do see that. But it seems like it’s so different this time. Like back then, the concern was, I don’t want my neighbor to get a bailout because they added in addition to their house. Right. And this time it’s like, why would you not want schools to work and why would you not want the buses to run? And why would you not want the city services funded?

S2: I think there is this aspect of blue state, red state tribalism here that somehow blue states are trying to get money to to wriggle out of a financial mess of their own creation. Again, I don’t think that’s particularly rooted in any kind of reality, but there does seem to be a little bit of that. I think there’s also just this desire to to minimize the extent of the crisis. We’re still in there that that’s that’s been a theme throughout the past six months that the Republican Party has just 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 than they are currently offering.

S1: 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. So can you just articulate what the stock market is actually capturing and why it might not be showing everything that’s happening in the economy right now?

S2: Yeah, I mean, the thing to keep in mind is that the stock market is not the whole economy. Right. And when you look at, you know, the big indexes like the S&P, five hundred, those are driven in large part by, you know, the tech industry, for instance, like what’s going on with companies like Apple and Microsoft and Google, which are doing just fine. I like there are parts of the economy. They’re doing OK or even Amazon better than ever. You’re seeing some of that in the stock market just because service workers are are being just slammed by this upstairs downstairs recession we’ve got where white collar employees are back at work or not back at work, but back working from home, while people who are employed at restaurants or at movie theaters or concert venues can’t go back to their jobs. Congress is not going to move until the stock market crashes just 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.

S1: Yeah, I guess my question is like, why if that metric isn’t capturing so much of the economy, why is it the metric that’s so important to lawmakers?

S2: Because it’s highly visible. And again, Donald Trump cares a lot about it. And when the stock market is crashing, rich people get upset. Upper middle class voters get upset because they see they’re for one case dropping. It adds to the sense of panic. It creates a lot of terrible headlines. Seeing all that read on CNBC tends to freak people out. And and so I think we’re at this weird point where the market is. Can keep going because companies because big companies feel like they are still making profits and also there’s a lot of there’s some optimism about the future. What’s weird about it is that if you read the statements from financial analysts, from from banks, they all seem to be assuming that another rescue bill is coming. There is this faith that eventually Congress will get its act together and pass some sort of one point five trillion to trillion dollar relief bill. And it’s just not clear where they’re getting that from. Nobody nobody in Washington is like, yeah, this is a sure thing. It’s kind of like a catch. Twenty two.

S1: Yeah. It’s like it’s like a circular logic. It’s like the stock market is boogied because it thinks the stimulus is coming and Congress isn’t doing anything because the stock market is boogied.

S2: Yeah, exactly. And so, so really it’s just like you need you need the investors to sort of have a Wile E. Coyote moment where they look down and or just read Politico and notice that Chuck Schumer and Mitch McConnell are not getting along. And Nancy Pelosi is kind of had it with the whole thing. I mean, it’s a it’s a weird situation. And I don’t know, maybe reality will break through or maybe not. I find this a little bit depressing because I think a lot of people don’t understand that what happened after 2008 and 2009 was a depression. Right. The economy took 10 years to recover. And it wasn’t the Great Depression. It wasn’t it wasn’t breadlines. You know, it wasn’t the complete collapse of society that we saw in the 30s, but it was a depression in the sense it was an extended period of the economy working below its potential.

S4: So do you think now we can’t recognize the depression when we see it? I am worried that we are we are used to mediocrity.

S2: Essentially, we we we are used to math. And as a result, a lot of people are going to suffer.

S4: Jordan Weisman, thank you so much for joining me. Thanks for having me. Jordan Weissmann is Slate’s senior business and economics correspondent, and that’s the show. What Next is produced by Mary Wilson, Jason de Leon, Danielle Hewitt and Elena Schwartz. If you like listening to the show, do your good deed for the day and tell a friend about it. Or if you’re not subscribed, click the button. I’m Mary Harris. You can find me on Twitter at Mary’s Desk, but I’ll be back here tomorrow with more. What next?