Today, enhanced federal unemployment benefits that have been a lifeline for tens of millions of newly jobless Americans struggling to make ends meet are slated to run out — with no new lifeline in sight. Rather than focus on crafting a bill to assist hardworking Americans in need of support, Senate lawmakers put forth legislation that would fund Trump’s pet project (a new FBI headquarters) and help out CEOs and other big business executives.
As it currently stands, the Senate stimulus proposal does little to remedy the crushing economic stress felt by so many struggling workers and their families. In fact, their bill slashes the crucial $600 benefit by more than half, which experts suggest could diminish economic output by 2.5% in the remaining months of 2020 — and kill two million jobs.
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Willow Oak Asset Management commentary for the second quarter ended July 30, 2020. Q2 2020 hedge fund letters, conferences and more Overview The second quarter was one of the most consequential time periods in American history. Risks that existed in the economic and political systems revealed themselves during the quarter due to the COVID pandemic. Read More
This in unacceptable. The economy is still struggling, and it won’t get fixed until the public health crisis is addressed. Congress needs to get its priorities in line and secure a new relief package that will put workers — not corporate executives and Trump allies — first.
Congress is Failing Struggling Workers by Cutting Off Federal Unemployment Benefits
Why is it that Congress can throw in the towel amid economy-altering talks, but struggling American families are expected to drudge on without the assurance of unemployment aid?
The moratorium on unemployment insurance is just one piece of the puzzle as hundreds of thousands continue to grapple with the ins and outs of life during an economic depression.
Republican plan to cut enhanced federal unemployment benefits by $400 would cost 3.4 million jobs: analysis. “A separate analysis from the left-leaning Economic Policy Institute projected that reducing federal unemployment benefits by $400 would cost the US 3.4 million jobs and shrink the economy by 2.5% over the next year. The move would reduce Americans' personal income by about $339 billion over the next 12 months, costing the U.S. about 2.5% in gross domestic product and resulting in 3.388 million fewer jobs created over that time period, according to the analysis.” [Salon, 7/27]
Small businesses are drowning in coronavirus expenses. “Expenses are piling up for cash-strapped small businesses as they invest in what it takes to lure customers and workers back into shops: fancy air filters, plexiglass shields, and stockpiles of PPE.” [Axios, 7/26]
'A Band-Aid on a bullet wound’: Workers are getting laid off anew as PPP runs out. “National Federation of Independent Business, a trade association for small businesses, found that 22 percent of PPP recipients surveyed have laid off or expect to lay off employees after using up their PPP loan, up from 14 percent in June. A recent report from Goldman Sachs found that only about one in six businesses that received loans said they were confident they could pay their employees without further assistance.” [Washington Post, 7/24]
REPORT: PERMANENT BUSINESS CLOSURES ARE OUTPACING TEMPORARY ONES. “Data from online review site Yelp found that 55 percent of the 132,500 business closures as of July 10 were permanent, a 14 percent jump from June figures.” [Politico Morning Shift, 7/24]
Federal Unemployment Benefits: Handouts to the Interests of Trump & His Allies
To add insult to injury, Trump sneakily included provisions for weapon purchasing, border wall construction, and aircraft manufacturing (oh my!).
GOP coronavirus bill replaces money for Pentagon projects Trump raided for border wall. “Projects involving Navy aircraft and ships and Air Force planes that the Trump administration canceled this year so the money could pay for the wall have reappeared in the GOP package, introduced Monday... Apart from the money aimed at restoring programs that were cut to pay for the wall, the coronavirus bill includes money for an array of other weapons systems” [Washington Post, 7/28]
The Cherry on Top for C.E.O.s & the Well-Connected
Those that are well-positioned to benefit off the new stimulus iteration are already sitting pretty.
As the Pandemic Forced Layoffs, C.E.O.s Gave Up Little. “Only a small percentage of the companies cut salaries for their senior executives at all, which is surprising given that the pandemic has crushed profits and sales for many companies, forcing large layoffs. But even among businesses that did cut the boss’s pay, two-thirds of the chief executives took reductions that were equivalent to only 10 percent or less of their 2019 compensation, according to an analysis by CGLytics, a compensation analysis firm.” [NYTimes, 7/29]
How K Street sees the Senate Republican bill. “There are other wins for trade groups tucked into the package. It includes a provision authored by Sen. Tim Scott (R-S.C.) that would make business meals entirely tax-deductible. That provision was hailed by the hotel industry, along with the liability provisions and additional PPP funding. “We were pleased to see a number of provisions that we’ve been actively lobbying on included in the bill,” Brian Crawford, the American Hotel & Lodging Association’s top lobbyist, said in an interview.” [Politico, 7/28]
Lawmakers Think They've "Done Enough"
To top it off, Trump’s pals in Congress feel that their work here is done.
McConnell: Some Republicans think ‘we have already done enough’ pandemic aid. “About 20 of my members think that we’ve already done enough,” McConnell said, adding that many Republicans were concerned about adding to the national debt…“We think that’s clearly far beyond what is necessary to get us through this next period as we continue to wrestle with the coronavirus,” McConnell said.” [PBS, 7/29]