April 23, 2020

Apr 24, 2020

Today the House of Representatives passed a new $484 billion coronavirus relief bill by a vote of 388-5. The Senate passed it Tuesday. $381 billion is for small businesses left out in the cold when the money from the previous coronavirus relief package quickly ran dry. Republicans wanted to stop there, but Democrats demanded $75 billion for hospitals, and $25 billion for coronavirus testing, as well as a requirement that the administration figure out a strategy to get tests to states.

The relief bill comes as more than 26 million Americans are out of work and almost 50,000 Americans have died of Covid-19. The representatives had to drive to Washington, D.C., or fly unusual routes because regular flights are canceled. They arrived for the vote in the Capitol building in alphabetical groups of 50 to 60 so they could keep their distance from each other. A number of Republicans refused to wear masks during the vote, while all but one Democrat wore one.

Democrats inserted into the bill a new committee to oversee the administration’s “preparedness for and response to the coronavirus crisis,” chaired by Jim Clyburn (D-SC). The committee has the power to subpoena witnesses and documents. Republicans and Trump objected.

But the Democrats did not get any more aid to states, crippled by the crisis, than the $150 billion previously provided. The bipartisan National Governors Association, headed by Maryland Governor Larry Hogan, a Republican, has asked for $500 billion to help the states replace lost tax revenues. Democrats wanted such aid, but Republicans refused.

Senate Majority Leader Mitch McConnell (R-KY) went on talk radio host Hugh Hewitt’s show on Wednesday and tried to make the question of state aid partisan. He said that he opposed granting money to states whose problems, he said, stemmed from their underfunded state pension plans. Instead, the states should consider bankruptcy. A document put out by McConnell’s office called aid to the states a “blue state bailout.”

In fact, Michael Leachman, the senior director of state fiscal research at the Center on Budget and Policy Priorities, said that McConnell has it wrong. States have not been overspending; their expenses for education and infrastructure are actually significantly below what they were in 2008, despite more inhabitants, and they have put about 7.6% of their budgets into rainy day funds, a historic high, up from the previous high of 5% they held in reserve in 2006 before the Great Recession.

The problem is that states have to balance their budgets annually, and they depend on sales and income taxes for 70% of their revenue. The shutdowns have decimated tax revenues as shopping ends and people lose their jobs. At the same time, unemployment claims are climbing dramatically. States are looking at a $500 billion loss between now and 2022.

States need money to avoid massive layoffs and deep spending cuts, actions that would make the economic crisis continue much longer than it would if they do not have to make them. They would not use bailout money on pensions, Leachman writes, but put it in state general funds, which are collapsing. Pensions come out of a separate trust fund (although the general fund does put money toward future pensions, that’s less than 5% spending from the general fund). Federal bankruptcy law currently does not allow states to declare bankruptcy, but in any case, Leachman writes, there is no need for it. Bankruptcy relieves high debt levels, but state debt is not high, and once the pandemic passes, the states should be financially sound again.

If Leachman’s explanation was scholarly, New York Governor Andrew Cuomo was blunt. “New York puts into that federal pot $116B more than we take out. Kentucky takes out $148B more than they put in,” he said at a press conference. “Senator McConnell, who’s getting bailed out here? It’s your state that’s living on the money that we generate.” A recent study by the Rockefeller Institute of Government shows that New Yorkers as a group pay in to the federal government $1,792 per capita more than they take out, while for every dollar Kentucky puts in, it gets $2.61 back.

Cuomo called McConnell out for trying to turn the crisis into a political fight: "That’s not what this country is all about," Cuomo said. "It’s not red and blue, it’s red, white and blue.”

Today’s other big news was Trump’s suggestion at his coronavirus briefing that it would be worth studying whether injecting disinfectant into patients would kill the novel coronavirus. "And then I see the disinfectant where it knocks it out in a minute. One minute. And is there a way we can do something like that, by injection inside or almost a cleaning?" he said. "Because, you see, it gets on the lungs, and it does a tremendous number on the lungs. So it'd be interesting to check that. So that you're going to have to use medical doctors, but it sounds — it sounds interesting to me." He also suggested using heat and light to kill the virus.

Doctors were horrified at his comment, calling it irresponsible and dangerous. Disinfectants are poisonous and are deadly if they are used inappropriately. “To be clear:” emergency medicine physician Dara Kass tweeted, “Intracavitary UV light and swallowing bleach or isopropyl alcohol can kill you. Don’t do it.”

Trump’s emphasis on dramatic cures for Covid-19 reinforces his disagreement with health experts that we must dramatically increase our testing for the disease so we can identify hot spots and isolate them before they spread. At today’s briefing, Trump disagreed with Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases and one of the administration’s top medical advisors about the pandemic, who recently said "We absolutely need to significantly ramp up, not only the number of tests but the capacity to actually perform them.” Today, Trump said: "I don't agree with him on that, no, I think we're doing a great job on testing.”

In fact, the U.S. lags behind other nations in per capita tests, and Trump’s continuing reluctance to support getting them seems to me mystifying. It is this odd gap Congress is trying to address with its requirement in the new coronavirus package that the administration must figure out a strategy to get tests to states. The bill now heads to the Oval Office for Trump’s signature.

For all the dark nitty-gritty of politics today, it is also a day that begins a joyous month, and that seems to me a far better way to leave you all tonight than with the day's troubles. For those who celebrate, Ramadan Mubarak.

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Notes:

Vote: https://www.politico.com/news/2020/04/23/coronavirus-congress-feuding-205773

Leachman: https://www.cbpp.org/blog/mcconnell-argument-against-state-fiscal-relief-doesnt-stand-up

Cuomo: https://news.yahoo.com/cuomo-rips-mcconnells-blue-state-190355086.html

NY: https://news.yahoo.com/cuomo-rips-mcconnells-blue-state-190355086.html

KY: https://www.wkyufm.org/post/kentucky-second-most-dependent-state-federal-money#stream/0

Chart of states: https://rockinst.org/issue-areas/fiscal-analysis/balance-of-payments-portal/

Coronavirus deaths: https://www.cnn.com/interactive/2020/health/coronavirus-us-maps-and-cases/

Disinfectant: https://www.nbcnews.com/politics/donald-trump/it-s-irresponsible-it-s-dangerous-experts-rip-trump-s-n1191246