stimulus legislation

Trump Calls for Limiting COVID Relief to Less Needy

Deal master. Photo: Nicholas Kamm/AFP via Getty Images

The coronavirus crisis has long pitted the GOP’s ideological commitments against its electoral interests. As the party presiding over an election year recession, Republicans have a strong political incentive to flood the economy with fiscal support. But as an organization whose top shareholders are reactionary plutocrats, the GOP has an inveterate distaste for using the power of the state to reshape economic outcomes in a manner that benefits working people — and an utter disgust with doing so in a manner that increases labor’s leverage over capital, however minutely.

Faced with the unprecedented circumstance of widespread economic lockdowns in March, Republicans subordinated ideological purity to political expediency, and passed the multitrillion-dollar CARES Act. Still, it did not completely spurn conservative orthodoxy. Despite the fact that the pandemic was already ripping holes into the budgets of blue and red states alike, Republicans refused to include significant fiscal aid to states in that first relief package. And even as the fiscal crisis in America’s states and cities has deepened in the ensuing months — forcing the public sector to actively deepen the recession by laying off workers and cutting investment — Mitch McConnell has held the line against aid to states. Ostensibly, conservatives have concluded that the ideological victory of forcing state governments to downsize is more valuable than maximizing Donald Trump’s odds of reelection, or providing Republican governors with the resources necessary to avoid unpopular spending cuts.

And now, with the CARES Act’s unemployment provisions set to expire at month’s end, Republicans are reportedly fighting to slash the incomes of 32 million unemployed Americans — at the peak of a pandemic, and just months before voters head to the polls — in order to combat the nonexistent problem of overly generous unemployment benefits reducing the national labor supply. Meanwhile, with as many as 28 million Americans at risk of eviction between now and September, McConnell is also reportedly opposed to providing housing relief to avert an explosion in homelessness on the eve of the election.

But the contradictions weighing on congressional negotiations over the next relief bill don’t just lie between the congressional GOP’s ideology and its political interests. They also lie between the congressional GOP’s ideology and Donald Trump’s largely random policy fixations.

There is approximately zero support in Congress for a payroll tax cut. Republicans aren’t interested in such a measure because it (1) does not benefit owners of capital, (2) is fiscally expensive, and (3) does less to mitigate the political downsides of the party’s miserliness than means-tested stimulus checks would. Democrats, meanwhile, are reluctant to cut a tax that theoretically serves as a dedicated source of revenue for Social Security. Plus, the GOP has signaled that it wishes to limit the legislation’s total cost to $1 trillion, a cap that would prohibit Democrats from securing adequate funding for states, the unemployed, renters, and other constituencies, even before a $300 to $800 billion payroll tax cut thrown is thrown into the mix.

But Donald Trump wants a payroll tax cut. In fact, the White House said Thursday that the president will not sign any coronavirus relief package unless it includes a payroll tax cut. It is not entirely clear why the president has taken this position. Some of his own administration officials have endorsed the notion that the next stimulus package should be tightly limited in price. Given the nation’s myriad fiscal needs, it is unclear why a penny-pinching president would want to prioritize a costly form of aid targeted specifically at Americans who haven’t lost their jobs.

Nevertheless, if Trump’s tax-cut fixation forces Republicans to abandon their price cap, Democrats should be willing to give Trump his poorly targeted relief measure in exchange for $1 trillion in fiscal aid for states, an extension of existing UI benefits, another round of $1,200 checks, billions in funding for addiction-treatment centers, and the party’s other priorities. Which is to say: Now isn’t the time to sweat the deficit. If it is possible for Democrats to get a lot by giving a lot, they should do so.

In all likelihood though, the White House is bluffing; and Congress’s “responsible” Republicans will ignore the president’s fiscally imprudent proposal and move forward with needlessly abetting a giant surge in poverty and homelessness because they find progressive redistribution icky.

Trump Calls for Limiting COVID Relief to Less Needy