April 08, 2020

More Money From D.C.? It Could be on The Way as The Coronavirus Batters The Economy

Suppose the government’s cash payments came again this summer and fall? Or teetering small businesses could get even more help making payroll?

If the economy remains in a tailspin, a coalition of 104 U.S. House Democrats, led by Reps. Derek Kilmer and Suzanne DelBene of Washington, have a plan.

The New Democrat Coalition, a group of more pragmatic Democrats, would create a system of what they call automatic stabilizers, help for people that would kick in if economic conditions remained dire.

Congressional leaders are discussing a new economic aid package. It would be the fourth since the coronavirus outbreak derailed the nation’s economy. Kilmer told reporters Tuesday that making certain benefit and loan programs automatic would not only provide some certainty but would also mean Congress would not have to act on such matters every few weeks.

The stimulus cash payments, a maximum of $1,200 per adult and $500 per dependent child, are due to begin showing up in bank accounts later this week.

The special $600 per week extra unemployment benefits will run through the end of July. Starting last week, small businesses could get forgivable loans up to $10 million that can cover payroll costs, and most mortgage interest, rent, and utility costs over an eight week period.

Kilmer and the coalition argued automatic triggers could extend those and other economic lifelines.

State and local governments may still need help, he said. So could those businesses.

“In the state of Washington, we will see a stay home, stay healthy order that lasts longer than eight weeks,” Kilmer said. Current law tries to help businesses maintain payroll and operations for eight weeks. Gov. Jay Inslee issued his initial order on March 23 and recently extended it until May 4.

“What if we’re still really in the tank a month or two from now? They (businesses and consumers) don’t have a sense of stability,” Kilmer said.

The coalition’s leaders offered their position in a letter to Speaker Nancy Pelosi and other top House Democrats: “A one-off payment is useful in meeting immediate financial needs, but for the many American workers and businesses uncertain of their circumstances and whether or not the crisis will persist three to six months from now, it will do little to restore demand and stimulate our economy.” The coalition is also urging a national recovery strategy and COVID treatment at no cost to all patients.

No specific economic plan has been formulated yet, said Rep. Scott Peters, D-California, a coalition vice-chair. He said factors such as the unemployment rate and the Gross Domestic Product, which measures the value of the nation’s goods and services, could be considered as triggers.

In its letter, though, the group suggested that if much of the economy remains shut down in May, there could be another round of stimulus payments, and there could be another round beyond that if conditions don’t improve.

The coalition’s idea of triggers has been discussed for years in Congress. Last month, a group of 19 Democratic senators, led by Sen. Sherrod Brown of Ohio, offered a plan to provide new payments of up to $1,500 per qualified recipient — generally lower and middle income people if the public health emergency continues into July, or unemployment is at least a percentage point higher than the December to February average.

The government would also give $1,000 each quarter to qualified consumers if the economy remains in turmoil and unemployment stays high. Payments would continue each quarter until unemployment falls to within half a percentage point of December 2019to-February 2020 jobless levels.

In the House, Rep. Pramila Jayapal, D-Washington, co-chair of the Congressional Progressive Caucus, has spearheaded an effort to guarantee immediate, monthly payments of up to $2,000 per income-eligible adult and another $1,000 for families with children for up to six months.

 


By:  David Lightman
Source: The News Tribune