No More $1,200 Stimulus Checks?

Congress has provided roughly $1.6 trillion in direct payments to assist individuals, businesses, hospitals, states and municipalities struggling during the coronavirus pandemic, and about 70% of the funds have already been distributed or committed, according to an analysis by The Wall Street Journal.

The money includes $1.2 trillion allocated in March by the CARES Act, which has provided enhanced benefits for unemployed workers, forgivable loans for small businesses and direct cash payments for households, hospitals, cities and states. In April, Congress added another $400 billion in aid for small businesses and hospitals.

“This fiscal stimulus has spent out very quickly relative to reasonable expectations, certainly relative to historical expectations, which is to the credit of the administration,” Ernie Tedeschi, an economist with Evercore ISI who served in the Obama Treasury Department, told the Journal. “In terms of the core assistance to households and businesses, we’re already past the peak.”

Here’s the Journal’s tally of major coronavirus relief programs:

• Paycheck Protection Program: The program providing forgivable loans to small business has disbursed or committed $511 billion out of $670 billion as of May 30.
• Economic Impact Payments: The Internal Revenue Service has sent $258 billion in direct payments to households, or about 89% of the expected 2020 total. About $35 billion in payments remain.
• Coronavirus Relief Fund: As of May 20, the Treasury had disbursed $144.3 billion out of $150 billion provided for states, territories and tribal governments

Democrats in the House are pushing for another massive relief bill with more than $3 trillion in additional spending, but Republicans have called for a pause to give lawmakers a chance to evaluate the strength of the economy and the effectiveness of the money provided so far. And GOP leaders are increasingly expressing doubts about the need to provide another round of $1,200 stimulus payments.

Sen. James Lankford (R-OK) said Tuesday that the CARES Act was necessary and effective, but the situation has changed. “Most folks are very grateful for the help,” he said. “But I don’t think we should set up a situation where we’re doing a check month after month after month.”

Sen. Mitt Romney (R-UT) said that another round of direct stimulus checks is “unlikely,” not least due to growing concerns about their cost. “I think it’s important for us to consider how we’re going to pay for all this and specifically how we’re going to deal with the structural deficit we have that adds a trillion to the debt every year. I hope that’s part of the next package,” he said.

Some Democrats in the Senate have also expressed doubts about sending out more stimulus checks, preferring instead to focus on employment and institutions.

“My concern is that it’s not focused in a way that is designed to help create or help sustain jobs, to deal with rental housing or education,” said Sen. Christopher Coons (D-DE). “My top priority is a robust round of assistance to state and local governments.”

What’s next: Legislation is unlikely to pass before July. White House advisers are scheduled to meet this week to discuss their plans for the next coronavirus package, which is expected to focus on promoting a national return to work and normal life as quickly as possible.

Ideas that have been discussed include a continuation of enhanced unemployment benefits but at a lower level; federal support for worker’s salaries; tax breaks for Americans who take vacations domestically; a payroll-tax holiday; and a capital-gains tax cut for investors.

The Senate voted along largely partisan Tuesday lines to confirm a White House lawyer nominated by President Trump to oversee the Treasury Department’s use of $500 billion in coronavirus recovery funds.

Senators voted 51-40 to confirm Brian Miller, a White House lawyer since 2018 who previously worked as a federal prosecutor and inspector general for the General Services Administration, as special inspector general for the pandemic recovery fund.

The position, created as part of the $2.2 trillion CARES Act passed in March, is certain to be highly scrutinized.

Democrats have criticized Miller’s work at the White House and questioned his ability to serve as an independent watchdog. "As an IG nominee with personal ties to the White House Counsel's Office and an administration outwardly hostile to anyone who tries to hold the president accountable, Mr. Miller failed in committee to explain, or in the letters afterwards, how he will establish his independence from his current boss," Democratic Senator Sherrod Brown said of Miller.

Senator Doug Jones of Alabama was the only Democrat to vote for Miller.

During his confirmation hearing last month, Miller pledged he would not seek Trump’s approval before communicating with Congress and would resist any pressure from the administration to undercut his independence. "If confirmed, I will conduct every audit and investigation with fairness and impartiality," Miller said at his hearing. "I will be vigilant to protect the integrity and independence of the Office of Special Inspector General."

The president, chafing at oversight, has fired several inspectors general in recent months, triggering criticism that the moves were political retaliation.

Miller's office will reportedly have a budget of $25 million.

“The bulk of our nation’s infrastructure — our roads, bridges, public transit and rail systems, the things that hundreds of millions of American families and businesses rely on every single day — is not only badly outdated, in many places it’s downright dangerous and holding our economy back. Yet for decades, Congress has repeatedly ignored the calls for an overhaul and instead simply poured money into short-term patches. The result? We’re still running our economy on an inefficient, 1950s-era system that costs Americans increasingly more time and money while making the transportation sector the nation’s biggest source of carbon pollution.”

– Rep. Peter DeFazio (D-OR), on the release of a five-year, $494 billion transportation bill Wednesday.

“With the acceleration of consumer and provider adoption of telehealth and extension of telehealth beyond virtual urgent care, up to $250 billion of current US healthcare spend could potentially be virtualized,” says a report by consulting firm McKinsey & Company.

• Extension of Paycheck Protection Loan Program Hits Senate Snags – Bloomberg
  
• ‘The Covid-19 Recession Is Over,’ Says Economist Zandi as May Job Losses Not as Bad as Feared – CNBC
• Major Employers Left Out of Government’s Coronavirus Relief Plan – New York Times
• Next Wave of U.S. Job Cuts Targets Millions of Higher-Paid Workers – Bloomberg
• Former CBO Director Calls for $1 Trillion Coronavirus Relief Bill – The Hill
  
• Fed's Massive 'Main Street' Business Rescue in Danger of Fizzling – Politico
  
• Fed Promised to Buy Bonds but Is Finding Few Takers – Wall Street Journal (paywall)
• Negative Interest Rates Could Be Needed for a ‘V’ Recovery, Fed Economist Says – CNBC
• Big Banks Call for Blanket Forgiveness of PPP Loans Under $150,000 – American Banker
• Wall Street Giant Faces Bipartisan Fire in Running Unprecedented Fed Bailout – Politico
• House Democrats Seek Information on Coronavirus Vaccine Contracts – The Hill
• The C.D.C. Waited ‘Its Entire Existence for This Moment.’ What Went Wrong? – New York Times
• Trump Administration Escalates Global Fight Over Taxing Tech – New York Times
• Contractors for Trump’s Controversial $3 Billion Food Aid Program Have Hired a Longtime Lobbyist to Tout Their Work – ProPublica
• Budget Nominee Looks Set to Clear at Least One Senate Hurdle – Roll Call
• Big Pharma Attacks Efforts to Guard Against Coronavirus Price Gouging – The Intercept
• Germany Agrees to $146 Billion Stimulus Plan to Revive Economy – Bloomberg

• I Helped Bail Out the Banks in 2009. Keep Corporations Accountable This Time. – Morris Pearl, Morning Consult
• Is the Economic Recovery Doomed to Take a Decade? – Robert J. Samuelson, Washington Post
• Big Job Gains Are Coming, But Not Yet and Not Enough – Conor Sen, Bloomberg
• Biden Begins to Map Out ‘Revolutionary’ Agenda, Reimagining His Presidency Amid National Upheaval – Matt Viser, Washington Post
• Joe Biden’s Retirement Reforms Are the Boldest We’ve Seen in Generations – Nick Buffie, MarketWatch
• HEROES Act Would Expand the EITC for Childless Workers and Help Fight Recession – Elaine Maag, Tax Policy Center
• The Coronavirus Crisis Has Revealed What Americans Need Most: Universal Basic Services – David Roberts, Vox
• The COVID-19 Crisis: How Do U.S. Employment and Health Outcomes Compare to Other OECD Countries? – Harry J. Holzer, Brookings Institution
• Balancing School Budgets and Tax Hikes in the Middle of a Pandemic – Renu Zaretsky, Tax Policy Center
• The Next COVID-19 Relief Bill Must Include Student Debt Cancellation – Michael Calhoun and Ashley Harrington, Brookings Institution