Yesterday, Alan S. Blinder, former vice chairman of the Federal Reserve Board under President Bill Clinton. R. and Glenn Hubbard, former chair of the Council of Economic Advisers under President George W. Bush penned an opinion piece in the Washington Post emphasizing the urgency of passing the American Rescue Plan.
Blinder and Hubbard are adding their voices to a growing chorus of economists and experts who see the administration’s plan as critical to addressing the economic crisis caused by the pandemic. Kevin Hassett, a former top economic advisor to President Trump, echoed this in an
interview last week in support of the American Rescue Plan, and
a Reuters survey of dozens of economists found that over 90% believed that it would “boost the economy significantly.”
Moody’s Analytics,
in an independent analysis, similarly found that the Rescue Plan would help create 7.5 million jobs in 2021, double economic growth, and return the U.S. to full employment a full year faster, and the plan has received praise from across the political spectrum – from the U.S. Chamber of Commerce and the Business Roundtable to Senator Sanders and organized labor.
That’s why President Biden is calling on Congress to act urgently to pass his plan so we can combat the economic damage being wrought by COVID-19, get relief and support to the families and communities who have been hit hardest by the pandemic, and ramp up vaccinations, testing, and public health capacity so we can get the virus under control.
Read the full article below.
Washington Post: We need to fight covid-19, not each other. Here are the keys to compromise on a relief deal.[By Alan Blinder and Glenn Hubbard, 1/28/21]
America faces a dire public health and economic emergency, yet the usual partisan lines are being drawn in Congress as the Democratic left and the Republican right gird for battle over President Biden’s
coronavirus relief plan. These political partisans should be uniting to fight covid-19, not fighting each other.
One of us is a lifelong Democrat, the other a lifelong Republican. But we manage to agree on about 95 percent of economic issues. Couldn’t members of Congress manage to agree on, say, 75 percent? Republicans can support a large relief package without accepting every detail of the president’s plan. Democrats can give ground here and there without compromising the most important principles.
What are those principles? We would highlight three.
First, delay can be deadly. This is a national emergency and must be treated as such. That means agreeing on a big relief package quickly. Mass vaccination provides the proverbial light at the end of the tunnel. But the tunnel is long, and we are now in a very dark place. Supplemental unemployment benefits
agreed to in December will run out in March; the $600 checks will not last long. Yes, another relief package will add to the national debt, but so did World War II. Covid
deaths already exceed all the U.S.
deaths in that long and bloody war, and the body count keeps rising.
Second, aid should be targeted to the greatest needs. That means fighting the pandemic with vaccines, gloves, masks and help for opening schools safely. How can that be a partisan issue? Turning to economic assistance, the greatest needs are obvious: income for the poor and unemployed, food for the hungry, help for small businesses struggling to survive, and aid to states and cities and towns trying to maintain essential services.
The checks issued under last year’s
Cares Act, and the $600 checks coming now, were not well-targeted. Many of the lowest-income households received nothing while funds went to households well above any reasonable definition of “middle class.” The assistance was not even targeted to people whose incomes were damaged by the pandemic. Washington can do much better.
Third, pandemic relief programs should be designed to phase out as the economy improves, not on set dates. Predicting the state of the economy six months or a year from now is a challenge even in normal times. With a pandemic raging, it’s next to impossible. Before the Thanksgiving-Christmas surge in Covid cases, the U.S. economy
appeared to be improving rapidly. But now, retail sales are falling, and
jobs are disappearing. Who knows what the future will bring? The flow of relief should respond to sensible triggers that reflect the state of the economy.
Conservatives and progressives alike should be able to agree on these three simple principles: speed, targeting and timely phaseout. That will leave plenty for the two camps to fight about later in addressing deep structural problems relating to poverty, inadequate education, racial inequality and more. Congress should debate these issues vigorously, and there will doubtless be partisan differences. But first: Deal with the immediate threat.
That effort faces some major stumbling blocks.
One is the overall size of the president’s proposed
$1.9 trillion relief package. Some conservatives say it would add too much to the deficit or stimulate the economy unduly; some progressives call it too small. Frankly, the two of us are not worried about the government providing substantial fiscal support, given the state of the economy. And with the Federal Reserve nearly out of ammunition, fiscal policy must take the lead.
There are good reasons for running large deficits now — as long as the spending is well-targeted.
Another concern is liability protection for business owners who fear being sued if employees get sick with Covid. But there is existing law around similar problems, and finding a middle ground shouldn’t be difficult. For example, safe harbors can be devised that protect responsible businesses without eliminating liability for gross negligence.
Some Republicans are wary of sending more federal assistance to state and local governments. But they, not the federal government, are on the front lines in the war against Covid, waging expensive campaigns while wrestling with revenue shortfalls and balanced-budget requirements. One result is more than
1 million layoffs of state and local government workers — so far. Without federal aid, there will be many more layoffs, including of critically needed personnel. Another Republican concern is that states might use federal funds to replenish depleted state employee pension funds. We’re not political experts, but a governor who redirects money intended for a public health emergency isn’t likely to please voters.
The nation is suffering from two critical shortages: vaccines and political good will. Congress has the power to address both of them.
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