America is now living under another state of emergency, only this time, it’s a real emergency and has nothing to do with border walls and “caravans”.
The US had 2,117 coronavirus cases as of the latest official figures available on Saturday morning. 49 people have died.
Trump’s emergency declaration frees up some $50 billion for states and localities, will entail massive buying of crude for the SPR, allows for delayed tax filing for some individuals and businesses, indefinitely suspends interest on federal student loans and paves the way for a speedier testing regime. As The New York Times dryly notes, “Mr. Trump followed none of the safety protocols recommended to combat the spread of the virus, shaking hands with multiple administration officials and chief executives and sharing a microphone with them”.
Hours later, around 12:30 AM in Washington, the House began voting on Democrats’ virus relief bill (embedded in full below), a separate measure hashed out over multiple meetings between Steve Mnuchin and Nancy Pelosi.
Apparently, it took more than 24 phone calls between the two to cement the agreement, which provides money for food stamps, enhanced unemployment insurance, free virus testing and new Medicaid funding – Democratic “goodies”, as the president derisively put it earlier this week.
Just let that sink in: America had to lean on Nancy Pelosi and Steve Mnuchin in a pinch. Not the president. Not the vice president. And not the team assembled by the White House to combat the epidemic. But rather the Speaker of the House and Steve Mnuchin.
The paid sick leave was a stumbling block during talks. Democrats sought to effectively make it permanent, with a provision creating a similar entitlement that would have applied to all public health emergencies. Republicans wanted that circumscribed, and limited to sick Americans and/or those tending to sick family members or kids forced to stay home from school.
By 12:40 AM, the House had the votes. Around 12:53, it was passed 363-40.
The Senate will take it up next week. It has Trump’s “full” support, despite misgivings he clearly communicated earlier in the week.
“We could have passed our bill yesterday”, Pelosi remarked on Friday evening. “But we thought it was important to show the American people that… we are willing and able to work together to get a job done for them”.
The Speaker isn’t done, either. “As the Senate works to pass this bill, the House will begin work on a third emergency response package to protect the health, economic security and well-being of the American people”, she wrote, in a letter.
After a week during which US stocks witnessed their worst single-day decline since 1987, “the demand for some kind of help was so strong that lawmakers rushed the bill through the House without even waiting for a formal estimate of how many billions of dollars it would cost”, Bloomberg notes.
That’s good. Because, as Stephanie Kelton – who was at wits’ end with the wrangling inside the Beltway this week – put it, “the Fed will clear every payment that is authorized by Congress. As it always does and always has. Find the VOTES, and the money will take care of itself”.
Trump, during his “it could get worse” Rose Garden spectacle on Friday afternoon, told America that “some of the doctors say it will wash through. It will flow through”.
Trump called those “interesting terms, and very accurate”.
“I think you’re going to find a number of weeks it’s going to be a very active term”, he added.
Good to have the enhanced sick leave, unemployment, and family leave measures. But they still seem to be only speed bumps that will slow but not prevent economic contraction.
Productivity and money velocity will be non-existent (…indeed, they weren’t all that good heading into this mess).
US Growth – “Lower For Longer”