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Pelosi’s relief bill angers the left and right

May 13, 2020 1:47 PM
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Pelosi’s relief bill angers the left and right

Unemployment is likely exceeding 15%, Americans are dying by the thousands daily, and coronavirus is ravaging even in states that are attempting sheepishly to reopen; the state of things in America is Very Bad in a way completely unquantifiable in our modern history. To meet the moment, our government is spending more than they ever have in modern history, with current projections placing Congressional and Federal Reserve spending as exceeding $6 trillion. That spending—a patchwork of financial bailouts, small business loans, unemployment expansion, and direct payments—is widely acknowledged to be grossly inadequate. Such is the scale of this defining moment in American history.

Congress has spent the six weeks since passing the $2 trillion CARES Act dilly-dallying as the country burned. The House briefly returned to refund money into the Small Business Administration loans, Mitch McConnell dragged the some members of the Senate back to hold confirmation hearings for a groomed federal court nominee, and leadership of both chambers fought each other in a bizarre feud over virtual voting and testing. All this time, Pelosi has teased a nebulous“phase four” relief bill, while McConnell pivoted to concern-trolling about the debt. Legislation was being drafted behind closed doors in an empty Washington, as rank-and-file members across both parties wondered when they would be called back. All the while, the deaths across the country mounted.

Today, we learned what Pelosi’s opening negotiation for more relief would be. The HEROES Act will spend over $3 trillion addressing the various nightmares our country faces. Yet an absurd timetable—Pelosi wants to pass the nearly 2,000 page bill by Friday—and a despondent majority in the Senate threatens the bill’s survival. More broadly, the bill plays into the worst impulses of this Democratic caucus, continuing the party’s tendency to limply negotiate against itself while shutting out voices from its increasingly powerful left. There’s a lot to like in Pelosi’s new vision for relief; it’s also deeply unclear how much of it will make it pass McConnell. And the amount of obvious priorities left on the cutting floor is depressing.

Familiarly ambitious, sometimes to a fault

Let’s be clear: this bill is 1,815 pages long. Most reporters and politicians are still reading through it, and initial analysis of the bill is based on messaging from House Democrats and uncovered nuggets of information.

With that said, here’s the parts of the bill that Nancy Pelosi wants you to know about, which I learned predominately from this excellent explainer by Ella Nilsen at Vox:

  • A massive infusion of cash into state and local government, to the tune of $500 billion for states, $375 billion for local governments, $20 billion for tribal communities.
  • Sets up a $200 billion “Heroes’ Fund” for essential worker hazard pay.
  • Funding for testing and coronavirus tracing, although it’s unclear how useful this will be if the White House continues to be seemingly indifferent to both.
  • An extension to the $600 bump in unemployment until January 31st, 2021. The weekly bonus was previously going to end in July, and the bill gives $925 million to states to specifically help scale up their processing infrastructure.
  • Sets another round of $1,200 direct-relief payments. The big change this time around is that taxpayers can now earn an extra $1,200 per dependent, up to 3 times. So, if you have three kids in college, you now get some extra money.
  • Reups cash for the Payroll Protection Program, and grants $10 billion to the Economic Injury Disaster Loan, which leadership says will help businesses seeking more flexible terms of relief.
  • Increases the maximum SNAP benefits by 15%.
  • Sends a whole bunch of money ($25 billion to be exact) to the Post Office so it can survive.
  • Dictates $3.6 billion towards expanding vote-by-mail access, including no-excuse absentee voting. The money can also go towards PPE fo poll workers.
  • And, finally, the bill covers nine months of full premium subsidies for COBRA, which allows laid-off workers to stay on their health insurance with minimal cost.

Viewing the bill like this—as a collection of positive bulletpoints—makes it seem like a incredibly ambitious response to a unprecedented crisis, which it is. On another level, however, it’s a weirdly stringent piece of legislation, one that spends a ton of money funding programs that have glaring flaws while leaving a lot of great ideas on the table.

Take the new relief payments, for instance. $1,200 is not a lot for someone facing a ruinous economic climate. Yet the bill doesn’t mandate any kind of recurring payment, it just gives everyone another $1,200. And the eligibility for that relief check is still determined by your 2018 taxes, which numerous critics have (correctly) said is unfairly limiting and not indicative of a person’s current financial situation. I don’t know why Democrats didn’t fix that in this bill; I just know they didn’t.

It’s also unclear how much has changed in the PPP. The large-scale loans to small businesses was meant to keep them afloat and meeting payroll while dealing coronavirus-related closures. The early days of the program were marked by chaos, as companies scrambled to put in loan applications with overwhelmed banks. Now that the program is humming along, the gaps are abundantly clear: the program mandates 75% of its loans go to payroll, which is severely limiting for urban companies that need to pay rent and other overhead. (Entire sectors of the economy, like restaurants, are basically left out in the cold.) Applications are way down for the program, both because owners are realizing how stringent the terms are and because a lot of small businesses are already dead. This bill doesn’t seem to address any of these problems.

And then there’s the bullshit that has been added to the bill.

Expanding and subsidizing COBRA seems like a good idea in theory. In practice, as Acela Lacy and Jon Walker wrote at The Intercept, “it is inefficient, unfair, poorly targeted, could end up hurting some people, and does not even work toward closing the gaps in the nation’s health care system.” It’s inclusion in the legislation seems to stem from a letter that insurance groups sent to House leadership asking for subsides for COBRA. Of course, the same insurance companies stand to benefit massively from these subsidies. And because this is the marquee health insurance plank for the bill, the underinsured and uninsured are left in the dust.

Somehow, COBRA subsidies aren’t even the most egregious bit of handouts in the bill. David Dayen at the American Prospect broke the news that the CARE Act will allow corporate lobbying firms to get PPP money. Previous implementations of the PPP limited 501(c)(6) dark money organizations from applying for PPP loans; the CARE Act removes these barriers under the guise of helping charitable nonprofits. It’s essentially Pelosi and House leadership caving to pressure from lobbyists that don’t actually need help; a bit of lobbyist caving that is dumb politically and gross morally. I’d imagine that Democrats on the Hill are crossing their fingers that Republicans aren’t bold enough to weaponize the exception publicly.

Meanwhile, as reporters trudge through the bill, more examples of blatant gimmies and shortcomings are being uncovered. The bill includes a number of tax cuts for higher-income taxpayers, gives Andrew Cuomo a way to massively cut Medicaid funding in New York’s budget while still collecting extra federal aid, and fails to mandate nationwide vote-by-mail, setting up a potentially disastrous scenario in November where voters in red states will be forced to choose between voting and their health.

Many of these problem could have been solved by listening to the incredibly ambitious ideas proposed by progressive politicians and outside groups. Representative Pramila Jayapal’s “Paycheck Guarantee” program would’ve cleared up tensions around PPP and unemployment bonuses by implementing European-style payroll coverage paid for by the federal government. The proposal was widely supported by rank-and-file House Democrats and is completely absent from Pelosi’s bill. It’s the same deal for Kamala Harris, Bernie Sanders, and Ed Markey’s proposal to increase direct relief to $2,000 a month for the majority of Americans. Even the more wonky, think-tank approved idea of setting up automatic triggers to kick in additional relief down the road is absent from the bill, setting up a 2021 nightmare scenario where Joe Biden is President and Republicans reject any additional relief.

Pelosi’s counter to this line of criticism is that she can only include proposals that are turned into legislative text. Yet as Ryan Grim points out in his newsletter, the Office of Legislative Council, which turns proposals into legislative language, is overrworked to the point of being able to only focus on leadership priorities. Pelosi could try to put these proposal into the bill, she just doesn’t believe in them or think they can be passed.

Pelosi’s relative caution around introducing more ambitious proposals is confounding, and speaks to the muddled politics that surround this bill.

Negotiating against themselves

A lot of words have been written about Nancy Pelosi’s overarching political maneuvering during this crisis. In a recent episode of The Weeds, Vox’s policy podcast, hosts Ezra Klein and Matthew Yeglasis described Democrats as occupying a majority-minority role in relief negotiations, pushing for the sensical and obvious policies while dealing with Republican ineptitude. In this scenario, there’s little room for the more aspirational liberal proposals, because otherwise nothing would happen. Commentators on the left cast Pelosi’s reluctance to embrace progressive policies as evidence of her disdain for the House Progressive Caucus.

The truth, more realistically, is that Nancy Pelosi is a moderate-minded politician with a focus on maintaining her majority in the House. Time and time again, she and other members of House Leadership have rejected progressive legislation on both ideological and practical grounds. She is not including progressive proposals in this bill because she does not believe in progressive legislation.

The question then becomes is whether or not her moderate policy making is sufficient to address a crisis of this scale, and whether or not her embrace of “practical” legislation is politically wise when her chief nemesis is Mitch McConnell.

It’s difficult to say whether or not Democrats are sufficiently addressing the crisis. The scale of what America is facing is incomprehensibly vast. What is clear is that many people are hurting very deeply, and that the current relief programs are full of holes that allow that pain to continue. The CARE Act seems to stay the course, making a number of sensible improvements while leaving equally galling problems intact.

What is clear is that Pelosi faces an uphill battle in passing any relief. McConnell may be bluffing when he says he’ll allow states to go bankrupt as a result of coronavirus relief spending, but is clear that he is a conservatively-minded leader who seems honestly disinterested in much more spending. His spokesman, David Popp, called the bill a “lib wish list on steroids”. That’s not what Pelosi delivered at all, but the truth rarely matters to McConnell’s ilk.

Herein lies the conundrum with this entire bill’s political aspirations: Pelosi has proposed a massively expensive, massively compromised bill. It includes few of the moonshots that progressives want, yet its massive price tag will be pilloried as big government excess by conservatives. It lacks a constituency beyond House Leadership and its most loyal followers in the caucus. And because it’s so compromised, there’s not a lot of room for negotiation without sacrificing absolute nesscities. It’s a bill that’s meant as an open salvo, but written like a watered-down, pork-filled omnibus bill.

Already, Pelosi is in a public standoff with the House Progressive Caucasus, who want to delay the bill’s absurdly fast timetable. That’s not a great start for what will likely be a massive, drawn out fight that requires a unified party. And even if the bill passes the House, it will need to overcome McConnell’s disinterest. The famously shameless Majority Leader is signaling that he is open to working with Democrats in exchange for passing liability reform. But he’s unlikely to bite on anything nearing $3 trillion.

The CARES Act will likely not pass in its current existence. But I have no idea what a negotiated-down version of this bill will do to help the millions of Americans facing the worst economic and public health emergency in modern history.