Republicans in Washington are right to keep a wary eye on skyrocketing overspending that has pushed the national debt to a point where it equals more than $80,000 for each citizen.
But right now, a new stimulus and relief package is more important.
The nation’s long-term health will depend on lawmakers from both parties finally getting serious about bringing spending in line with revenues after the pandemic has passed. In the meantime, however, millions of Americans continue to suffer financially through no fault of their own. The current recession was necessitated by efforts to fight the virus. It was not caused by inflated inventories, overvalued assets or any other fundamental economic weakness that needs to be corrected through the pain of financial distress.
But without a new package that includes help for individuals and industries, including those connected with tourism (an important cog in Utah’s economy), recovery from the coronavirus-induced slowdown could be long and damaging.
As this week began, the two major parties remained separated on some key issues. The biggest of these may be what to do with the $600 weekly supplement that was going to all jobless adults under the previous stimulus package. That benefit has now expired, leaving many Americans with little hope of paying bills.
Republicans worry the benefit was so large it removed any incentive for some people to return to work. Democrats want to renew and extend the benefit in full.
There is nothing scientific or sacrosanct about the $600 figure. Republicans have said they would support a much smaller benefit, or perhaps a cap on total benefits that would equal no more than 70% of a person’s lost wages. This issue should not be an impediment to a final agreement.
Democrats also support giving aid to state and local governments, which Republicans oppose. However, Republicans seem willing to support giving local governments greater flexibility in how they might spend federal money that came with the previous aid package. This, too, ought to lend itself to a quick compromise solution.
But this needs to happen quickly.
The Trump administration, meanwhile, has hinted it might impose some sort of unilateral action if Congress doesn’t settle on a solution. This may be a bargaining ploy intended to help Republicans. However, some of the president’s supporters have suggested he suspend the payroll tax for a season.
The legality of such a move is unclear. From a public policy perspective, however, it would be unwise. Social Security already faces disaster as its trust fund moves closer to insolvency. That problem has become more acute as unemployment rolls swell and fewer people are employed to pay the payroll tax that funds it. Suspending that tax would put Social Security in a more serious fix, demanding immediate attention.
Some Republicans want to put the brakes on any more unfunded multitrillion dollar rescue plans. Obviously, that sort of spending is unsustainable unless Washington can come to grips with an annual spending deficit that threatens to top $3 trillion this year.
Utah Rep. John Curtis’s Deal With the Debt Today Act and Sen. Mitt Romney’s TRUST Act, among other legislative proposals, would force lawmakers to confront these spending problems once the pandemic has settled.
In the meantime, however, the economy needs help. The best way to balance the books is through the kind of economic prosperity that naturally fills tax coffers with growing revenues. That won’t come if Congress allows the virus to do permanent damage to the economy.