A $900 billion coronavirus relief package was approved by both houses of Congress Monday night. It will provide $600 direct payments to most individuals and increase weekly unemployment benefit payments by $300. Negotiations almost fell apart last week when Democrats objected to a provision by Pennsylvania Sen. Pat Toomey. The provision would have “closed down more than $400 billion in potential Federal Reserve lending powers established under a relief bill in March,” and barred the Fed from restarting the lending next year, The Associated Press reported. Democrats said the provision would hinder the Biden administration’s ability to help the pandemic-damaged economy.
We’d say we were shocked that Pennsylvania Sen. Pat Toomey nearly single-handedly derailed the desperately needed relief bill, but that wouldn’t be entirely true.
This is the kind of fiscal shortsightedness for which Toomey is known.
But the former Wall Street banker has made stinginess his brand. He has been Ebenezer Scrooge — before the transformational Christmas Eve visits from ghosts — for much of his career.
From 2005 to 2009, Toomey was president of the Club for Growth, which co-founder Stephen Moore said sought to be the Republican Party’s “tax-cut enforcer.” The organization supported CEO pay raises, but opposed the Affordable Care Act, the auto bailout and a minimum wage increase. Essentially, the belief is that ordinary folks should be left to their own devices — that’s what bootstraps are for. And if they lack the means to pull themselves up and get ahead, that’s their problem.
But tax cuts for the well-to-do? Toomey has been enthusiastic about those. He championed the Tax Cuts and Jobs Act of 2017, asserting that “federal budget deficits will shrink as a result of this legislation.”
Federal budgets deficit ballooned. But according to the Center for Public Integrity, corporations saved $150 billion in taxes in 2018 alone, and stock prices soared. And wealthy members of Congress did pretty well, too.
Late last week, according to The Morning Call, as members of Congress tried to get a relief bill over the finish line, Toomey pushed to include a provision that would limit the Federal Reserve’s “capacity to establish lending programs similar to the ones Congress authorized in March to mitigate panic in the financial markets.”
Toomey’s provision would have limited the options of the incoming Biden administration, as it sought to deal with the ongoing pandemic and still-crushed economy.
“For a while this weekend,” The Morning Call noted, “it appeared that the Pennsylvania Republican’s stand might blow up the deal.”
Why? For what purpose? To reestablish his deficit-hawk credentials as he finishes out his term in the Senate and seeks a soft landing place? To make a point about the deficits that his party utterly failed to control under President Donald Trump?
We expect to see other Republicans remember suddenly that they are opposed to deficit spending once Joe Biden is in the White House. But Toomey’s aim to curtail the ability of the new leaders of the Treasury Department and the Fed to lend money during a national health crisis belongs in a special category of twistedness.
The Federal Reserve has offered low-interest loans to state and municipal governments. It’s not that big of a stretch to imagine a cash-strapped municipality needing to lay off police officers in the new year because it couldn’t meet payroll and couldn’t get a federal loan. In such a case, Toomey’s proposal effectively could have defunded the police.
Fortunately, its language was reworked in the final version of the relief bill.
Toomey told CNBC’s “Squawk Box” on Monday morning that he just wanted credit programs of the sort launched by the Fed in March to require congressional approval moving forward.
“These are unprecedented, extraordinary powers, and they’re only justifiable in a real emergency,” Toomey told CNBC. “We are clearly not in a financial crisis at this point.”
Tell that to the state and local government officials who, in the face of pandemic-related revenue shortfalls, are trying to figure out how to pay the bills.
Earlier this month, Utah Republican Sen. Mitt Romney — who was among the moderates to push a compromise stimulus bill — said he didn’t “like spending money we don’t have. But the time to borrow money, maybe the only time to borrow money, is when there is a crisis. And this is a crisis. We want to help people at this particular time.”
That should have been the priority of every member of Congress whose constituents are struggling — and likely will continue to struggle until the pandemic is in the rearview mirror.
But our elected officials seem to have a problem establishing priorities that put ordinary folks first.
We’re glad Congress has found a way to get relief to Americans, but $600 is a pretty paltry amount. And although $325 billion — including $284 billion in new loans through the Paycheck Protection Program — sounds like a lot, the “small business aid is only expected to cover less than three months of payroll costs ... while many employers don’t expect to resume normal operations for more than six months,” the website Politico reported.
We’re glad that the relief deal will extend the federal eviction moratorium to Jan. 31 — especially as Spotlight PA has reported that “Pennsylvania tenants and homeowners missed out on roughly $108 million of $175 million in federal coronavirus relief because state programs distributing the funding made it too hard to access.” This is inexcusable.
The federal relief package will increase food stamp benefits by 15%, but will not expand eligibility in the Supplemental Nutrition Assistance Program, Politico points out. This is a shame, because a lot of people — including Lancaster County residents — are having a hard time putting food on their tables right now.
But don’t worry: According to Jeff Stein of The Washington Post, the White House has secured a tax break for corporate meal expenses — the so-called “three martini” deduction — in the relief package.
This editorial was updated Tuesday, Dec. 22, to reflect passage of the coronavirus relief bill.