[MCN] 5 sticking points keep Democrats from voting for bailout proposal

[Lance Olsen]

Excerpt from Vox: <<https://www.vox.com/policy-and-politics/2020/3/23/21190764/senate-cloture-vote-coronavirus-fails <https://www.vox.com/policy-and-politics/2020/3/23/21190764/senate-cloture-vote-coronavirus-fails>>>

1) Not enough protections on $500 billion for businesses

The bill’s $500 billion in business support includes $425 billion in loan guarantees, $50 billion for airlines, $8 billion for cargo air companies, and $17 billion for firms “critical to national security.” The fund is overseen by the Treasury Department and Secretary Steven Mnuchin has wide latitude over how to use it.

While there is language meant to protect workers and prevent the money from being used on giveaways to investors, such as stock buybacks, Democrats think that language is far too weak; Mnuchin <https://twitter.com/JakeSherman/status/1241790556138811392/photo/1> himself can waive it in some cases. “We’re gonna give $500 billion in basically a slush fund to help industries controlled by Mnuchin with very little transparency? Is that what we ought to be doing?” Sen. Mazie Hirono (D-HI) asked Politico <https://www.politico.com/news/2020/03/23/democrats-slush-fund-republican-rescue-package-143565>.

Add to this the fact that on Sunday, Trump specifically refused to rule out offering assistance to his own companies <https://www.huffpost.com/entry/donald-trump-companies-coronavirus-bailout_n_5e77f1e5c5b62f90bc4cdddf> (“let’s just see what happens”), and you have Democrats worried not just about a corporate bailout but about potential corruption by a president they already voted to impeach.

2) No money to people who don’t earn enough to file taxes

The latest version of the Senate bill offers its full cash benefits — $1,200 per adult tax filer, $500 per child — to even the poorest Americans, correcting a big problem with the first GOP draft <https://www.vox.com/2020/3/20/21188087/mcconnell-cash-assistance-plan-limited> of the bill that left out low-income people entirely. But you need to have filed taxes for 2018 or 2019 to get the benefit, which leaves out millions of Americans who do not typically need to file.

Nonfilers typically either rely on mostly nontaxable income — like Social Security retirement or disability benefits or retirement income from a Roth account — or do not have enough money to owe taxes. Either way, they tend to be among the most economically vulnerable people in the country.

Democrats want to use tools the federal government has to get cash directly to those people without requiring them to fill out unnecessary paperwork.

3) Not enough state aid, SNAP money, health money

The Democratic talking points note that the bill doesn’t do anything to strengthen the food stamp program — one of the most effective economic stabilizers we have <https://www.vox.com/future-perfect/2019/3/29/18279205/recession-unemployment-inverted-yield-curve-stimulus-policy> — or to provide cash to state and local governments that, unlike the federal government, operate on balanced budget constraints and so are likely to raise taxes or cut spending as the crisis goes on. Democrats also want funding for uninsured people who fall sick during this crisis.

4) No protections against eviction, foreclosure

The Trump administration has already taken actions to prevent foreclosures of mortgages insured by the Federal Housing Administration <https://www.washingtonpost.com/business/2020/03/18/hud-orders-60-day-foreclosure-moratorium-homeowners-affected-by-coronavirus/> or Fannie May/Freddie Mac <https://www.bloomberg.com/news/articles/2020-03-18/fannie-and-freddie-to-suspend-foreclosures-to-aid-virus-relief?sref=Zd9D2evu>. But that hardly covers all homeowners and doesn’t do much for renters. Democrats objected that the Senate bill has “no specific provisions to protect individuals from eviction, foreclosure, or forbearance.”

5) No student loan forgiveness

Democrats, up to and including presumptive Democratic nominee Joe Biden <https://twitter.com/JoeBiden/status/1241869418981920769>, are demanding at least $10,000 in federal student loan forgiveness per student as part of the package. Trump has suspended payments on student loan payments <https://www.realclearpolitics.com/video/2020/03/20/trump_announces_60_day_suspension_of_student_loan_payments_good_news_for_the_students.html> for the next 60 days and frozen interest, but he has stopped short of forgiving the underlying debt.

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Domino effect could heat up Earth by 5 degrees Celsius  <https://www.dw.com/en/domino-effect-could-heat-up-earth-by-5-degrees-celsius-despite-paris-climate-deal/a-44968248>
https://www.dw.com/en/domino-effect-could-heat-up-earth-by-5-degrees-celsius-despite-paris-climate-deal/a-44968248 <https://www.dw.com/en/domino-effect-could-heat-up-earth-by-5-degrees-celsius-despite-paris-climate-deal/a-44968248>

Aug 6, 2018 ... Even if the Paris agreement is successfully implemented, the planet could still heat up by 5 degrees Celsius, scientists warn.

The lead authors say:

“Our study suggests that human-induced global warming of 2 degrees Celsius may trigger other Earth system processes, often called 'feedbacks,' that can drive further warming — even if we stop emitting greenhouse gases.” 

And:
“These tipping elements can potentially act like a row of dominos. Once one is pushed over, it pushes Earth toward another. It may be very difficult or impossible to stop the whole row of dominoes from tumbling over.” 


The above referenced PNAS article:
Steffen, Rockström et al. Trajectories of the Earth System in the Anthropocene. PNAS August 2018. [Open access]
http://www.pnas.org/content/early2018/07/31/1810141115 <http://www.pnas.org/content/early/2018/07/31/1810141115>
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