ANALYSIS — Even as the House Appropriations Committee returned to routine business during the week of July 6 — considering bills to fund the government for the coming fiscal year — the pandemic hung over everything.
Between March 5 and July 4, Congress passed and President Donald Trump signed six laws to help Americans weather the crisis wrought by the coronavirus. At a cost of more than $3 trillion, those laws, with their expanded unemployment benefits and forgivable business loans, have kept millions of Americans out of poverty and thousands of companies afloat.
Still it’s too early to judge Congress’ handling of the greatest domestic challenge since the Great Depression. Decisions made this month in the Capitol will bring that record into greater focus. By the end of July, representatives and senators must decide whether to extend key programs propping up the economy, from the Pandemic Unemployment Compensation providing an extra $600 a week to those out of work, to the eviction moratorium protecting renters in public housing and those living in homes with federally backed mortgages.
Though nearly five million Americans went back to work in June, 18 million remain unemployed. Millions of others are earning significantly less than they were before the virus struck. Congress will need to pass another rescue package to avoid a calamity.
But between the time Congress passed the most significant of its relief laws, the CARES Act, in late March, and today, the consensus about what to do has eroded, and the political imperative has returned. Election Day is now less than four months away.
While visiting Flaget Memorial Hospital south of Louisville, Kentucky, during the Senate’s recess on July 6, Majority Leader Mitch McConnell said he expected to take up a relief bill when the chamber reconvenes July 20, after a two-week hiatus.
It will be harder to pass. McConnell and his GOP caucus are disinclined to spend as much as Democrats on new assistance to individuals. A May study by University of Chicago economists Peter Ganong, Pascal Noel and Joseph S. Vavra said that two in three unemployed workers were then earning more with the $600 per week federal benefit than they had while working. As a result, Republicans believe the benefit is a disincentive to find a job and are considering replacing it with a return-to-work bonus.
Also on the table: another round of checks like the $1,200 ones Congress approved in March, but McConnell suggested it should only be for workers who earned $40,000 or less last year. Federal Reserve Chairman Jerome Powell said in May that 40 percent of workers at that income level lost their jobs at the outset of the pandemic.
The $3 trillion relief bill the House passed on May 15 is far more generous. It comprises three parts, one focused on aid to states and localities, another on economic relief for individuals and a third on fighting the virus through testing and tracing of infections.
It would extend $600 weekly unemployment payments through January, offering another round of $1,200 checks with equivalent payments for dependents, a new program to help renters make their monthly payments, as well as hazard pay of $13 per hour, on top of an essential worker's regular wages, till the end of the year. (Senate Minority Leader Charles E. Schumer and fellow Democratic Sen. Ron Wyden have proposed a bill to extend the expanded unemployment benefit in each state until its unemployment rate dips below 11 percent. The most recent Bureau of Labor Statistics data has 28 states above that level in May, including Schumer’s New York and Wyden’s Oregon.)
McConnell has called the House bill “totally unserious,” too expensive and an impediment to economic recovery. But Speaker Nancy Pelosi, speaking at the Capitol on July 9, said she would be reluctant to deviate from her three-part formula and said Republicans were trying to cap the cost at a too-low $1 trillion.
“We need a trillion dollars for state and local,” she said. “We need a trillion dollars, another trillion dollars, for unemployment insurance and direct payments. We need something like that, but probably not as much, for the testing, tracing, treatment.”
Republicans have not hinted at what they plan to spend, if anything, on further virus mitigation. The U.S. still lags many other developed countries in its testing rate per capita, even as it is catching up. It has now conducted almost 40 million tests in a country of 330 million people, and is now processing more than 600,000 a day.
Efforts to trace infections, so successful in containing the virus in countries like South Korea, have also struggled to take root in the U.S. New York City, which hired 3,000 contact tracers, has found it hard to get infected people to respond or reveal their contacts. In Massachusetts, the state has laid off most of the 1,900 tracers it hired in the spring, reducing the workforce to fewer than 800 because the state’s declining infection rate has left them little work to do.
Another potential stumbling block is McConnell’s demand that any further relief bill contain liability protections for reopening schools, health care providers and businesses.
After initially shooting down liability protections, Democrats have hedged. “We think there’s a path to talk about protecting businesses and workers and customers,” Pelosi said, adding that it should be predicated on their compliance with safety regulations the Democrats want the Occupational Health and Safety Administration to write.
The other holdup is Democrats’ insistence that the next relief bill aid states and localities, which have seen vital sales tax revenue collapse. The House’s May bill includes more than $1 trillion in aid for them, most of it in flexible funding they can use as they see fit.
Republicans say this would bail out profligate states that have run up large unfunded pension liabilities for their government workers at the expense of more thrifty jurisdictions. McConnell in April said hard-up states should consider bankruptcy, though he’s lately expressed a willingness to tie virus relief specifically to coronavirus-related revenue losses or to help states cope with new virus-related costs.
One such area is education. As schools look to reopen for the fall semester, they’re facing huge additional costs, for masks and stepped up cleaning, and potentially to procure additional classroom space and hire new teachers to reduce class sizes. Even there, Republicans are skeptical. Senate Health, Education, Labor and Pensions Chairman Lamar Alexander says he expects schools to need federal funding. How much more than the $13.5 billion allocated in the CARES Act, if any, remains up for debate.
The mood has changed in the Capitol. Congress passed the major relief bills of March as panicked Americans grappled with lockdowns, closed schools and fear of the virus. Those problems remain, but have given way to political disputes over the severity of the health crisis and the proper remedies for it, and the appropriate balance between combating the disease and reopening the economy.
The policing debate sparked by the Memorial Day killing of George Floyd by the Minneapolis police officer Derek Chauvin, and the protests that followed, have further exacerbated the partisan divide.
After the bipartisan successes at the outset of the crisis, Congress has returned to the gridlock that preceded it and disputes over further virus relief are fueling it.
That’s evident in the fiscal 2021 spending process. Senate Appropriations Chairman Richard C. Shelby has halted further consideration of the 12 annual spending bills because Democrats say they’ll offer virus-related amendments that Republicans oppose.
The policing debate, which ended last month when Senate Democrats voted against considering a bill by South Carolina Republican Tim Scott, is also holding up appropriations. Shelby is also seeking to avoid policing amendments.
House Democrats, who began considering their spending bills this past week, are also squabbling among themselves. Homeland Security Appropriations Chairwoman Lucille Roybal-Allard, a California Democrat, says it’s unlikely her bill will go to the floor this year because of Progressive Caucus opposition to some immigration enforcement funding. Massachusetts Rep. Ayanna S. Pressley, meanwhile, objects to a longstanding provision in the Labor-HHS-Education bill barring federal funding for abortions, threatening another intraparty impasse.
It all means that this year will likely end with a voluminous omnibus that will be impossible for rank-and-file representatives and senators to evaluate, or worse, a continuing resolution merely maintaining the status quo. That, at a time when the budget is stretched beyond imagination, and government needs are greater than ever.
Congress’ record this year will be, by some metrics, its worst in modern times, with fewer bills enacted than at any time in memory. But its legacy will depend on how it responds to the virus over the next three weeks.