The Senate is about to pass the 'largest relief package in history' amid the coronavirus-induced economic crisis, but progressives say it isn't enough
- The Senate is poised to pass what will likely amount to a more than $2 trillion stimulus package on Monday as the coronavirus pandemic all but shuts down the US economy.
- But progressive activists and lawmakers say the spending package needs to be significantly bigger.
- Rep. Alexandria Ocasio-Cortez and others on the left say the economic crisis provoked by the pandemic requires a long-term and structural response, rather than a short-term flood of government subsidies.
- Several of Ocasio-Cortez's former aides with the group New Consensus are proposing $2,000 monthly checks for all Americans and significant subsidies for small businesses and the production of essential supplies, including medical equipment
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The Senate is poised to pass a historic stimulus package on Monday as the coronavirus pandemic all but shuts down the US economy. But progressive activists and lawmakers say the spending package needs to be bigger and more equitable.
Lawmakers have already passed two emergency bills, signed by Trump last week, sending $8.3 billion in funding for government health agencies and about $100 billion for expanded paid leave, unemployment insurance, and food and healthcare aid.
The stimulus that comes out of the current negotiations will likely amount to around $2 trillion, but it will almost certainly not be the last piece of legislation Congress will need to produce to fight the economic fallout from the pandemic.
The Trump administration is asking for massive bailouts for the airline, hotel, and cruise ship industries, among other affected sectors, and a $300 billion stimulus for small businesses.
"We're going big," Trump said at a White House press briefing last week. "We don't want airlines going out of business or people losing their jobs and not having money to live."
Senate Republicans introduced a stimulus bill on Thursday that would cut corporate taxes, provide up to $1,200 in direct cash payments to Americans who make less than $99,000 per year, offer $10 million loans to small businesses and hundreds of billions of dollars in loans to large corporations, and limit the paid leave expansion passed in the emergency measure.
But Senate Minority Leader Chuck Schumer announced Friday that Democrats won't sign on to any bill that doesn't include extra funding for rural hospitals, full unemployment insurance for laid-off workers, and a ban on stock buybacks for companies that take government aid, among other measures.
Sen. Bob Menendez, a New Jersey Democrat, said he was confident the stimulus would be the "largest - when it's all concluded - relief package in history."
Majority Leader Mitch McConnell said he's hoping to have the parties reach an agreement over the weekend and pass the legislation on Monday.
Meanwhile, progressive lawmakers and activists are pushing for a much larger relief package that prioritizes assisting struggling workers, expanding healthcare benefits, and investing in public systems over aiding corporations.
And many economists say the Senate stimulus bill is just a "down payment" on the further injections the economy will require as the pandemic ravages the country.
Torsten Slok, chief international economist at Deutsche Bank Securities, told Politico this week "$1.2 trillion in pure terms is going to cover about two to three weeks of economic activity."
"So if this were going to last just that long, $1 trillion might be enough," he said. "But really it's only a down payment."
'You have to go to a true war footing'
Rep. Alexandria Ocasio-Cortez and others on the left say the economic crisis provoked by the pandemic requires a long-term and structural response, rather than a short-term flood of government subsidies.
She and others have pointed to their climate change mitigation proposal, known as the Green New Deal (GND), a set of policies that would boost the working class while transitioning to a green economy.
"In the short term, we need emergency measures to get people through," Ocasio-Cortez tweeted last Wednesday. "Long term we should consider using current interest rates & make sweeping investments that create millions of jobs decarbonizing our economy, from [infrastructure] to [education]. The GND was written as a stimulus for people + planet."
In a podcast released Friday, the congresswoman advocated for "permanent systems and structures," including Medicare for all and a federal jobs guarantee, to be part of the government's coronavirus response. The other guest on the podcast, Stephanie Kelton, is a prominent proponent of Modern Monetary Theory (MMT), which proposes that the government print money and deficit spend to boost the economy.
Several of Ocasio-Cortez's former aides, including former chief of staff Saikat Chakrabarti, is working with the progressive group New Consensus, which helped design the Green New Deal, on an economic mitigation plan they hope will influence the government's coronavirus response.
The proposal calls for a debt holiday, $2,000 monthly checks for all Americans, coverage of all healthcare expenses, significant investments in small businesses and the production of life-saving supplies.
Zack Exley, a former adviser to Ocasio-Cortez and Sen. Bernie Sanders and co-founder of the group, said New Consensus is "trying to get a point across" by proposing "what you'd actually have to do to solve the problem" rather than what he described as the half-measures the Senate is poised to pass.
New Consensus is proposing that the government both scale up the stimulus and pay for it through non-debt monetary expansion, or simply having the government print more money.
"What they're proposing is just nowhere near on the scale of what needs to be done and what's going to need to be done with this crashing economy," Exley told Insider. "We're just saying you have to go so much bigger than what you're doing now, you have to go to a true war footing, World War II scale in terms of the size."
Robert Hockett, a Cornell University law professor and adviser to Ocasio-Cortez who helped write the proposal, argued that the Senate proposals focus too much on the supply side of the economy, boosting businesses while not giving consumers enough support.
Because social distancing is keeping so many workers and consumers home, Hockett argued that supply-side investments focus on the production of personal protective gear, which is already in short supply, to render that distancing unnecessary. And Hockett is pushing for the creation of a National Investment Authority, which would serve as a public-private director of spending on infrastructure and development projects.
"[The Treasury and the Federal Reserve] can supply the finances and they can facilitate the financing, but they don't specialize in the planning that you have to do with that financing," he told Insider.