Editor’s note: We endeavor to bring you the top voices on current events representing a range of perspectives. Below is a column arguing that the federal government should step in with additional coronavirus relief efforts to help American workers weather the current economic downturn. You can find a counterpoint here, where Spence Purnell of the Reason Foundation argues that another federal stimulus package is a bad idea vulnerable to government waste and abuse.
Congress finally got its act together and passed the CARES Act (even dodging the curveball Speaker Pelosi tossed at the eleventh hour). But that doesn’t mean Congress should pat itself on the back for a job well done just yet. The CARES Act was relief, not “stimulus,” and Americans are going to need additional help staying afloat until the economy can return to normal.
The economic situation is bad and only likely to get worse in the short term. Nearly ten million Americans have filed for unemployment in the last two weeks alone, a spike that blows away anything we’ve seen in the past few decades. Nearly all states have ordered nonessential businesses to shut their doors.
It’s true that cash payments to individuals and government spending don’t fit well within free market orthodoxy when it comes to responding to recessions, but this is not your grandfather’s economic contraction.
Economic experts across the spectrum agree that the right policy for now is to tolerate the economic pain in the short term while doing everything we can to preserve the economy’s ability to spring back into place once the crisis abates. As it happens, they also largely agree that the economic cost of abandoning shelter-in-place policies without having contained the virus would be greater than staying the course.
That’s why journalists labeling the $2.2 trillion CARES Act a “stimulus” are a bit off the mark — the bill was not intended as a Keynesian jolt to the economy, it was meant to help Americans and businesses tread water until some sense of normalcy is restored.
Fiscal conservatives may rightly bristle at the thought of piling up even more debt to combat a recession. That’s why the cost of new relief packages should be paid for through spending cuts elsewhere as soon as possible. The opportunity for common ground here does exist — the National Taxpayers Union Foundation and the U.S. Public Interest Research Group last identified over $250 billion in bipartisan savings in 2017 and are currently working on updating this joint project for 2020.
Additionally, many important changes that Congress should make to provide Americans and businesses with relief have little or no cost at all. The Department of the Treasury has delayed the tax filing and payment deadlines until July 15, but it should likely consider another delay should the period of national emergency continue close to this date.
Along these same lines, many Americans could incur surprise tax filing obligations as a result of working remotely for extended periods. Just two states have announced that they will treat remote work as normal office work during the national emergency — Congress could save taxpayers and businesses a great deal of headache by making this the national standard during this period.
Relief proposals that do not fit within the limited goals of helping Americans and businesses keep afloat with social distancing measures in place should also have no place in coronavirus response legislation. Ideas such as expanding the state and local tax deduction and a massive $2 trillion infrastructure package have been proposed as responses to the pandemic, but they have little to do with the goals of helping Americans to weather this storm. These proposals should be set aside for more responsive, targeted measures.
But policymakers must be cognizant of the unique circumstances of this particular crisis and the measures needed to fight it. Putting the economy into hibernation is the only real choice (an economy can’t go on as normal during a pandemic), but the short-term consequences for American workers and businesses can’t be ignored. As long as the pandemic necessitates a continued shutdown, the federal government has a role in ensuring that affected Americans can pay rent and put food on the table, and that businesses are poised to return to normal operations once the crisis passes.
That can, and should, be done with fiscal responsibility in mind. But the longer Congress waits to address the unfolding crisis, the more difficult that project becomes.
Andrew Wilford is a policy analyst with the National Taxpayers Union Foundation, a nonprofit dedicated to tax policy research and education at all levels of government.