(Bloomberg Opinion) -- With the flood of new U.S. unemployment filings swelling past 40 million this week, the divide between the political parties on economic policy has never been wider.
Democrats in the House have passed $3 trillion of new relief aid and believe much more is needed.
Republicans in the Senate adopted a policy of Wait and See two months ago, and apparently believe that the situation now calls for even more waiting and seeing. Senate Majority Leader Mitch McConnell has indicated that at some point there will have to be some further legislative response to the economic calamity set off by the coronavirus pandemic, but so far he appears content to watch the damage and … well, there doesn’t seem to be more than watching. He put it this way on Wednesday: “Let’s wait a few weeks here and see what kind of impact opening up the economy is having to begin to restore our country.”
All of this is a major turnabout from early in the pandemic, when the two houses of Congress worked together to pass three major relief bills in March, including the $2 trillion Cares Act. Even then, the House was more aggressive. The original Republican bill was half the size of the one that eventually passed, and consisted mainly of loans to big and small business. Democrats added a lot, including expanded unemployment insurance. Back then, President Donald Trump also helped by jawboning the Federal Reserve to react aggressively. Those three bills were by no means perfect, but they amounted to an impressive job by both parties of confronting extraordinary circumstances. But while Democrats immediately began to talk about a “Phase 4” bill and eventually passed a version of it, Republicans appear to believe the job is mostly done.
The Cares Act is now two months old — it was signed on March 27. There was also a refill in April for the depleted forgivable-loan plan known as the Paycheck Protection Program, which Democrats expanded to give some additional funding to hospitals and other priorities. But other than agreeing to that adjustment, Senate Republicans have done nothing for two months, and seem to be in no hurry. McConnell’s current “a few weeks” seems to be on top of the two months he’s already been waiting and seeing.
It’s unclear exactly what’s behind the inaction. It’s possible that some Republicans, including Trump, are mistaking a stock market rebound for a broad-based economic recovery. For others, it might be an ideological Hooverism — a belief that government action is inevitably counterproductive. Or perhaps it’s opposition to government spending on many domestic programs, regardless of the situation (often expressed by Republicans as opposition to “deficits,” even though it isn’t connected to the federal budget deficit).
Another possibility is that Senate Republicans are reluctant to move ahead without presidential leadership, which hasn’t been forthcoming. Given that Trump is unpredictable on policy and has a history of undercutting his own party, they may prefer to wait until he publicly commits to something. Yes, that appears to be inconsistent with their willingness to treat Trump’s policy suggestions as dead on arrival, which is how they’ve dispensed with his long-standing and long-ignored push for a large infrastructure bill. But it’s not unusual for members of Congress to seek political cover for something they believe is necessary but holds some danger.
Or perhaps Republicans simply aren’t up to the task of conducting public policy.
The most perverse possibility? Some commentators have speculated that inaction is a preference the White House chooses as a way to pretend that everything is fine. If that’s what’s happening, it’s nuts. There’s no looking past 20% (or higher) unemployment. People without jobs, and their families and friends, aren’t going to think everything is fine simply because the government isn’t rushing to do something about it. Yes, there are strong Trump supporters who will believe him no matter what. But they won’t abandon him if he supports another major relief bill, because they won’t abandon him regardless of what he says.
Whatever the reason, it’s hard to believe that Wait and See is politically viable. The next unemployment report is going to be brutal, and even though some re-hiring showed up in the numbers this week, the pace of layoffs is still substantially higher than any previous record, which suggests that June may be even worse than May. Many job losses may be permanent as firms disband and as state and local governments with plunging revenues are forced to lay off their own workers. In 1929, President Herbert Hoover had an excuse: Experts really didn’t know how to help an economy recover. Economists in 2020 haven’t mastered everything, but they are close to unanimous that swift, large-scale government action is what’s called for.
And yet Republicans are still saying “Wait and See.” The obvious Democratic response is going to be: What are you waiting for? And: Haven’t you seen enough?
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Jonathan Bernstein is a Bloomberg Opinion columnist covering politics and policy. He taught political science at the University of Texas at San Antonio and DePauw University and wrote A Plain Blog About Politics.
For more articles like this, please visit us at bloomberg.com/opinion
Subscribe now to stay ahead with the most trusted business news source.
©2020 Bloomberg L.P.