Democrats have a civic obligation to block emergency relief for America’s most vulnerable small businesses until Republicans meet their partisan demands.
This assertion may strike some readers as satirical. Mainstream political discourse typically disdains legislative hardball and equates “partisan” goals with myopic ones. And this tendency is sure to be accentuated in coverage of Capitol Hill’s present conflict. In recent days, Congress has come to grips with the fact that it massively underfunded the Paycheck Protection Program (PPP) — a measure that aims to keep the small-business sector afloat and its workers employed by extending forgivable loans to firms with fewer than 500 employees that commit to forgoing layoffs. In the policy’s first three days of operation, Bank of America alone received enough loan applications from eligible firms to wipe out 10 percent of the $349 billion initial appropriation. Thus, the Trump administration and Senate Republicans have called for an immediate $250 billion increase in funding for the PPP. And they would prefer to keep that appropriation clean and simple, so that Congress can pass it by unanimous consent, thereby sparing vacationing senators from having to travel to Washington in the middle of a pandemic.
Earlier this week, reports suggested that Nancy Pelosi and Chuck Schumer were inclined to endorse this plan. And it isn’t hard to see why. Had Senate Republicans proposed a $600 billion pot for the PPP to begin with, Democrats wouldn’t have had any qualms. Meanwhile, since the PPP is a “first-come, first-served” program, the most vulnerable small firms — which don’t typically have the best lawyers, accountants, or preexisting credit relationships with major lenders — are also the most likely to miss out on aid unless the appropriation is rapidly increased. Further, given that wage, rent, and utility bills mount with each passing day, anything that holds up the dispersal of relief to small businesses is likely to doom some enterprises to collapse. Put all these considerations together — and add the fact that every House district is full of small businesses haranguing their elected leaders for help — and you can see why Democrats would be reluctant to block a clean expansion of the PPP.
And yet, the PPP expansion could very well be the party’s last, best chance to realize objectives as vital to the country as aiding small businesses. Mitch McConnell has repeatedly signaled reluctance to advance a fourth relief package. And there is nothing scandalous about holding aid hostage to partisan demands when things like “keeping low-income Americans fed,” and “making sure hard-hit state governments aren’t forced to deepen the recession by laying off public workers en masse” have become partisan issues. What’s more, since swing voters historically hold the president’s party responsible for adverse economic conditions, Democrats have genuine leverage over their Republican colleagues. Even if taking a hard-line stance is unpopular today, the details of congressional negotiations in April aren’t going to have much influence on the 2020 election; labor-market conditions in November, by contrast, will. Schumer and Pelosi have the upper hand. The only question is whether they’re willing to use it (negative press coverage, be damned).
Happily, the answer appears to be yes. On Thursday, Senate Democrats refused to vote for a clean PPP expansion, insisting on the following amendments to the proposal:
• $100 billion for hospitals and community health centers to facilitate purchases of testing supplies and personal protective equipment for health-care workers.
• $150 billion in relief funds for state and local governments.
• A 15 percent increase in the maximum food-stamp benefit.
• A stipulation that 50 percent of the new funding for small businesses will go through community-based financial institutions that cater to a variety of underserved constituencies, such as minority-owned businesses and rural nonprofits.
This is a fine start (although the appropriation for states and cities is still too low given the scale of financial calamity they’re facing, and that last condition adds a layer of bureaucratic complexity to a program that’s already being undermined by red tape, and might therefore be inadvisable).
But even if Schumer bent McConnell to his will, the resulting legislation would leave many of the country’s most fundamental needs unaddressed. Before Democrats expend what could be their last remaining leverage over their reactionary colleagues, they should secure (at least) these three things:
1. Voting reforms to ensure American democracy survives COVID-19.
Wisconsin is quite likely to be the Electoral College’s “tipping point” state this November. And this week, Republicans in the Badger State’s legislature made clear that if they are given the opportunity to aid Donald Trump’s reelection by denying Democratic constituencies the opportunity to vote safely, they will gladly do so.
Eleven U.S. states had primaries scheduled to take place this month. Ten either postponed their elections or transitioned to all-mail-in voting, to avoid accelerating the spread of COVID-19. Wisconsin’s Democratic governor Tony Evers tried to prevent his state from being the exception. The GOP’s (heavily gerrymandered) state legislature wouldn’t let him. Although holding an election amid a pandemic would put both parties’ voters at risk, the virus’s greater prevalence in urban areas meant that Democratic-leaning constituencies were likely to be disproportionately impacted. And with one of the state’s Supreme Court seats on the ballot, the prospect of clinching judicial supremacy in the state proved more appealing to Wisconsin Republicans than protecting the health of their own constituents.
Democrats must not let them replay this strategy in November. Congress has the constitutional authority to directly legislate the rules governing House elections. And it can further influence how states run their other electoral contests by attaching conditions to federal grant money. Congressional Democrats should insist on using these tools to:
• Give all voters the option of casting their ballots by mail this fall (at present, the GOP would like to restrict this privilege to demographic groups that vote Republican).
• Make the postage on mail ballots free or prepaid by the government, to avoid imposing a de facto poll tax that could disenfranchise low-income voters.
• Expand early voting, polling locations, poll staffing, and curbside voting in order to minimize the length of lines for in-person voting — and thus, the public-health hazard of turning out in November.
2. Hazard pay for all the essential workers putting their health at risk to keep America functioning.
The crown jewel of the $2 trillion stimulus bill that Congress passed late last month was its expansion of unemployment insurance benefits. At Democrats’ insistence, the legislation provided low-to-middle-income workers with benefits equal to 100 percent or more of the wages they’d earned at their former jobs.
This policy was both just and economically sound. America’s labor market is collapsing, and it is unclear when it will be safe (let alone profitable) for the bulk of the service sector to reopen. Ensuring that laid-off workers do not suffer steep drops in income in the interim will help keep families in their homes, and sustain consumer demand for products and services that can be safely provided amid a pandemic.
But if Congress does not pair its unemployment-insurance expansion with a wage subsidy for essential workers, the former program could create political and economic problems. Conservatives are already working to rebrand generous unemployment benefits as an insult to working people who still have to get up every morning and put their health at risk stocking items at grocery stores. Meanwhile, with deaths and infections among workers mounting, grocers, pharmacies, and other essential businesses are increasingly concerned about their capacity to hire and retain staff. If laid-off workers have the option of staying home and earning what they did at their old jobs or accepting a minimum-wage position where they face serious risk of infection, they are liable to choose the former.
But this is not an argument against generous unemployment benefits; it’s an argument against paying our economy’s most essential and selfless contributors poverty wages.
Earlier this week, Schumer unveiled a proposal to address this issue: a “Heroes Fund” that would provide $13-per-hour hazard payments for front line health-care workers, grocery store clerks, truck drivers, drug store workers, and pharmacists.
But for whatever reason, the Minority Leader declined to make this one of his demands for the Senate’s next relief bill, despite its substantive necessity and ostensible political virtues (who wants to vote against a Heroes fund?).
3. Insurance against future Republican economic sabotage.
In all likelihood, if Joe Biden wins the White House this November, an ongoing economic crisis will greet his administration next January. According to the Congressional Budget Office’s latest projections, America’s unemployment rate will remain above 9 percent at the end of 2021.
But if it’s safe to assume that the need for additional economic relief and stimulus will persist under a hypothetical Biden administration, there’s no reason to assume Congress’s willingness to meet that need will survive Trump’s presidency. Given the GOP’s structural advantage in the Senate, it’s more likely than not that Mitch McConnell will remain Majority Leader even if Trump returns to the private sector next year. Senate Republicans have proven only grudgingly interested in dispensing aid to non-plutocrat Americans this year, when it is in their party’s political interest to do so. In a context where helping unemployed Americans also means aiding a Democratic president, it’s quite likely that the GOP will decide that the only cure for economic stagnation is cutting Medicaid and food stamps. After all, this is precisely what the party did amid the stubbornly high unemployment of the early Obama years. Meanwhile, with a Democrat in the White House, much of corporate America may once again decide that the deficit is a serious problem (even as the past month of stimulus has made clear that the U.S. can massively increase spending without spurring a whiff of inflation or higher borrowing costs).
Thus, to protect Americans against the threat of future Republican economic sabotage, Democrats must insist on tying on all relief measures to objective economic criteria, rather than arbitrary dates. In other words: Instead of having enhanced unemployment benefits phase out after four months, Congress should mandate that such heightened benefits automatically take effect whenever the U.S. unemployment rate rises above a given threshold. And it should append the same automatic triggers to relief for states and municipalities, and the disbursement of checks to households. If Democrats don’t secure stimulus for the next recession today, Republicans may let the economy burn for political advantage tomorrow.
This list is far from comprehensive. Given the scale of public-health and economic devastation rippling through American society at this juncture, there are surely countless other items one could add to Democrats’ righteous ransom note — from more funds for modernizing state unemployment-insurance offices to aid for the homeless. Reasonable people can disagree about where precisely Schumer and Pelosi should draw their red line. But there’s little question that their present demands are inadequate. For the good of the country, Democrats must milk their hostages for all they’re worth.