Austerity for Whom?

Submitted by mellissa on Fri, 02/12/2021 - 14:56

February 12, 2021--Last week, Republican Senators unveiled an alternative to President Biden’s stimulus proposal. Citing unspent funds from previous relief packages, the counter-proposal intends to cut some of the empty calories, as it were, from the options that Democrats are pursuing through budget reconciliation.

Although congressional Democrats are moving full speed ahead with the budget reconciliation option, some Democrats, like Senators Joe Manchin (D-W.V.) and Krysten Sinema (D-Ariz.), have expressed a preference for a slimmed-down stimulus like the one proposed last week. While the viability of this Republican proposal continues to wane, emerging concerns about “unspent” funds and aid overkill are likely to endure in future stimulus discussion and are worth public consideration. While one can see the appeal of the argument that there’s a pool of unspent money just waiting to get into the hands of people who need it, that argument doesn’t quite stand up to facts.

First of all, it is worth remembering that even though Congress passed an additional stimulus in late December, that bill was months overdue. The CARES Act was never meant to last as long as it did, and to begin with, it was rife with underfunded, short-term, and unequal social programs.

For example, the Paycheck Protection Program, was widely criticized for disparate lending to minority- and women-owned businesses and creating real harms for American workers. Schools across the country continue to see budget cuts, despite increasing costs and federal aid, and lapses in funding for stimulus checks and expanded unemployment insurance have pushed millions of Americans into poverty.

So, despite appeals from moderate Senators to balance the needs of the most vulnerable against fiscal prudence, the scales are tipped in the wrong direction. Their answer is less aid to fewer people for a shorter time period—their version of “targeted relief.” A handful of Democratic Senators have even broken rank to support some of these policy proposals. Joe Manchin, for example, has advocated for smaller direct payments, arguing that checks won’t “get jobs back and get people employed.”

As millions of Americans find themselves suffering the hopeless precarity of economic depression, moderate Senators have asked us all to wait and see, without ever telling the public what to look for and for how long. Lags in data reporting means that if we wait until all the numbers are in, more people will suffer. Furthermore, this wait-and-see sentiment only tends toward the erroneous conclusion that there’s a downside to big, bold government aid.

We know that this approach is insufficient because these same moderate Senators call for action with all due speed when action serves the interest of their top campaign donors. Senator Susan Collins, for example, is pushing for more relief to rural hospitals - despite the fact that they are still receiving CARES Act disbursements. Perhaps the insurance-, health care-, and private equity-affiliated campaign donors, who fund a significant portion of Senator Collins’ campaign committee and supporting PACs, have convinced her of the urgency of the moment.

Prudence apparently didn’t factor in when the Senator Rubio (R-Fla.) and Senator Collins designed the PPP, handing out billions to corporations without question, or when the Senate added over $80 billion in tax breaks to the wealthy into the CARES Act. But for some reason, financial prudence is the guiding principle now that government is poised to support poverty reduction programs, education funding to low income students, unemployment insurance, and sick leave during a global health crisis.

Under a divided government, moderates had the opportunity to design effective stimulus policy. Although these policies provided some short-term assistance for working class, the assistance came in tandem with billions in grants, loans, and tax breaks to corporations and the wealthy. In effect, this deepened systemic inequality and set the foundation for a k-shaped recovery.

So, as the nation continues to dig itself out of this crisis, the American public cannot heed calls for austerity from the architects of last year’s top-heavy stimulus bills. Working Americans are buckling under the weight of this crisis, and without big, bold support from the government, they will find themselves in increasing economic distress.