McConnell Can Ignore Senate Democrats, But Not Pelosi

The Majority Leader’s rushed Senate stimulus bill will eventually have to be reconciled with the House.

As I suggested previously, the economic crisis facing American workers is unfolding at least as fast as the coronavirus is spreading—perhaps even more so. For example, here’s the news from Pennsylvania.

Robert O’Brien, the state’s deputy secretary of labor and industry, said the government had been overwhelmed by a flood of unemployment insurance claims — 180,000 in the last few days. He said that was far more than the state usually gets in a whole month.

That news comes amidst a report that the White House has asked states to not report their unemployment numbers—replicating Trump’s attempt to keep the number of coronavirus cases in the country quiet. There can be no doubt that the president is truly delusional, assuming that if Americans don’t hear the news, it will simply go away.

Meanwhile, Trump’s Treasury Secretary, Steve Mnuchin, is forecasting that unemployment will reach 20 percent. While it’s hard to believe anything coming from this White House, that tracks with an NPR/PBS poll, which found that as of March 14th, 18 percent of respondents said they had already been let go or had their hours reduced. Derek Thompson reminds us of who is going to get hurt the worst.

Ground zero for the pandemic’s threat to the labor force are the face-to-face services and leisure economy, much of which have been forcibly shut down by governments to prevent the spread of the virus…

The workers in these sectors—salespeople, waiters, hotel desk clerks, groundskeepers, maids, and entertainment attendants—have a few things in common: First, their average annual wages are less than $30,000, including tips, according to the Bureau of Labor Statistics… Second, they have the fewest labor protections, such as paid sick leave, and in many cases their tips don’t count as income when they apply for unemployment insurance. Third, they can’t do their work from home.

Thompson sums things up well when he writes that, “the virus may swing the economy from the lowest unemployment rate since the 1950s to the highest rate since the 1930s.”

The urgency of this situation is dire, which is why both Republicans and Democrats are working feverishly on a “phase 3” stimulus package to shore up the economy. On Thursday night, Senate Republicans released their plan that has been crafted behind closed doors without any input from Democrats. You can read a good summary of what they’ve included in this article by Caitlin Emma and Jennifer Scholtes. It includes loans and loan guarantees for the airline industry, small business loans, and financial support for hospitals and providers who are treating coronavirus patients. When it comes to American workers who are struggling financially, this is what they’ve included.

…a direct payment to qualified Americans of up to $1,200. Married couples could get $2,400. Taxpayers who earn more than $75,000 annually will begin to see that payment reduced by $5 for every $100 they earn over the $75,000 threshold, with those who make more than $99,000 getting nothing. Families with children would get $500 per child.

While a Treasury Department outline circulated earlier in the week had called for two payments from the IRS — one each in April and May — the Senate GOP proposal only calls for one check at this time.

In addition to only being a one-time payment, there’s this issue:

The poorest families, those with no federal income tax liability, would see smaller benefits, though the minimum would be set at $600…About 22 million people earning under $40,000 a year would see no benefit under the GOP plan, according to an initial analysis by Ernie Tedeschi, a former Obama administration economist.

While various Democrats have proposed the inclusion of restrictions on money that is spent to bail out major industries, the overwhelming issue with the Republican proposal for direct cash payments to individual Americans is that it is entirely insufficient. McConnell knows that this will be a problem for Democrats, which is why he is going to try to rush this proposal through the Senate.

It is very likely that what McConnell will do is use his vast knowledge of Senate procedures to push his bill through on Monday and limit the ability of members to negotiate changes or propose amendments. That will place Senate Democrats in the position of having to either vote in favor of McConnell’s bill or nothing.

In defending his exclusion of Democrats in crafting his bill, McConnell suggested that this was the fastest way to get something done. That would be true if your only goal was to pass a bill in the Senate. But to actually get some relief out to American workers, it will also have to pass the House.

House Democrats are still finalizing their plan and, when it passes, the two bills will go to conference committee in order to iron out the differences. As things are taking shape, that is where the actual negotiations will happen. Eventually, McConnell and his colleagues will have to deal with Nancy Pelosi.

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Nancy LeTourneau

Nancy LeTourneau is a contributing writer for the Washington Monthly. Follow her on Twitter @Smartypants60.