Sunday, March 15, 2020

Covid-19 Rescue Plan Should Be Vehemently Opposed

More than a few reasons exist to vehemently oppose the federal covid-19 economic rescue package. This is the hastily drawn up package, which Trump said he fully supports and is rapidly working its way through Washington on its way to becoming law. The two major reasons for strongly objecting to this bill are, we have no idea what it will cost and it will totally miss its target while dealing a crushing blow to small businesses across America. Still, because of politics, the measure passed in an overwhelming 363-40 vote in the House soon after Speaker Nancy Pelosi, and Treasury Secretary Steven Mnuchin reached an agreement.

 Politics And Grandstanding For The Masses
The 110-page bill is being painted as proof lawmakers could work together during a crisis after being sharply divided over party lines during the failed impeachment of President Trump.  By framing the poorly and hastily crafted pork-packed bill this way promoters are positioned to demonize those unwilling to support it. The chamber approved the bill less than an hour after the text was released. This bill is aimed at assisting millions of Americans directly and is in addition to the $8.3 billion emergency spending bill already approved to curb the spread of covid-19.

Jim Banks, a congressman from northeast Indiana was among 40 Republicans who opposed the bill. Interestingly, the rest of Indiana's nine-member delegation, six Republicans and two Democrats, voted in favor of the act which has been named "Families First Coronavirus Response Act." Banks claimed it was because "Some language will mean major harm for small businesses and our economy." Bank's office referred to a message sent to House leaders from the National Federation of Independent Business, which objected to a provision of the legislation that would require employers with fewer than 500 workers to provide paid medical and family leave. The question is, how many struggling businesses with two to twenty workers have the resources to weather this storm. 

90% Of Businesses Are Small (click to enlarge)
The bill scheduled to go to the Senate will provide free testing for the virus, expand unemployment assistance and increase spending on nutrition programs. Banks tweeted: "There is much in this bill we need to pass, but as the NFIB said in their letter of opposition, the bill would impose potentially unsustainable mandates on small businesses' hurting not helping the backbone of our local economies."

The NFIB correctly contends that "many small business owners simply cannot afford the cost of the new mandate at the same time as they experience increasingly slower sales." The advocacy organization said that many businesses "may not stay afloat" long enough to claim quarterly tax credits provided by the paid-leave provision. According to the bill, employers would have to provide 14 days of paid sick leave for at least two-thirds of a worker's pay. This applies to employees who have the coronavirus, are caring for a family member who has it or who need to care for children due to facilities being closed. For those now forced to take on this burden, this is enough to make their heads spin, unlike government agencies small business owners cannot turn to taxpayers when they can't pay their bills.

Below is a list of what this legislation promises to do:
  • Requires private health plans to cover covid-19 testing at no cost, and allocates $1 billion for testing for uninsured Americans
  • Ensures employers with fewer than 500 employees and government employers offer two weeks of paid sick leave through 2020.
  • Requires those same employers to provide up to 3 months of paid family and medical leave for people forced to quarantine due to the virus or care for family because of the outbreak
  • Offers payroll tax credits for employers providing those leave benefits
  • Puts $1 billion into emergency state grants for providing unemployment insurance benefits. It includes $500 million for staffing and logistical costs for states, with an additional $500 million reserved for states that see a 10% increase in unemployment
  • Puts $500 million into food assistance for low-income pregnant women and mothers with young children, $400 million into local food banks and $250 million into a senior nutrition program
  • Suspends the Supplemental Nutrition Assistance Program work requirements for the duration of the crisis

In an effort to silence GOP opposition Trump wrote this bill “will follow my direction for free CoronaVirus tests, and paid sick leave for our impacted American workers.” He also said he directed Mnuchin and Labor Secretary Eugene Scalia “to issue regulations that will provide flexibility so that in no way will Small Businesses be hurt.” Many political pundits see Trump's declaration of a national emergency on Friday and his endorsement of this package as an effort to mitigate damage from his administration's initially weak response to the crisis.

In what appeared a contrived stunt to rally stocks, Trump declared a national emergency, 15 minutes before the market closed on Friday. In his declaration, Trump said he would temporarily waive the interest on federal student loans but more importantly directed his administration to buy oil for its strategic reserve. This caused oil and stocks to soar. The reality and fears of widespread economic disruption with workers, either sick or laid off has resulted in all major U.S. stock indexes dropping by more than 8% for the week despite rising on Friday.

As expected, in a series of tweets, the president said “I fully support” the legislation negotiated by Pelosi and Treasury Secretary Steven Mnuchin and said he looks forward to signing it “ASAP!” The Senate has canceled its recess plans and is expected to take it up Monday. Senate Majority Leader Mitch McConnell said senators “will need to carefully review” the proposal. “But I believe the vast majority of Senators in both parties will agree we should act swiftly to secure relief for American workers, families, and small businesses,” he said.

4,000 Queue For Hours At Chicago O'Hare
It is difficult to think the incompetent clowns in Washington have a handle on the cost of this bill or that the Congressional Budget Office has had time it asset it. The information is so sparse few of us are able to get details about the language it contains but one thing is certain, the politicians are rushing to pander and pour forth "free stuff." Sadly, few are considering the unintended consequences that will flow from their so-called efforts to blunt the economic damage of the global pandemic.

Never underestimate the stupidity of government. An example of their lack of competence can be seen at the 16 US airports approved to handle Americans returning to the country. At these airports, unimaginable long lines of people crowd together for hours and hours without masks. This is also playing out in other airports, a passenger arriving at JFK confirmed that they were told to share pens and there was no hand sanitizer. "So if we didn’t have the virus before, we have a great chance of getting it now!" one passenger stated.

The reason to vehemently oppose the "Families First Coronavirus Response Act." is that it is ill-conceived. Why will anyone want to work, especially government workers when they can get paid to stay home? How do you staff healthcare facilities when nobody comes to work? The greatest irony of this farce is that small business owners will be the first to take it on the chin. Privately-owned companies with fewer than 20 are the backbone of America and what makes it work. This means Trump may not understand at what point a small business becomes a medium or large business or simply doesn't care. Ironically, the members of the NFIB strongly supported this same President that is throwing them under the bus.


  1. Several after thoughts occurred to me upon posting the above article. The first is this bill was rushed through so fast it did not have time to be properly scrutinized. We can only hope the next few days will stop the madness. The second is, I should have provided a couple of links to past articles dealing with small businesses in America. You can now find them below.

  2. Bruce
    I think madness and panic get worse as time goes on. I think we can rest assured that we are going to see some very rough times in the near future.
    Thanks Chris

  3. Looks like a reasonable bill to me with fair healthcare treatment for low paid workers.
    Most countries have a basic free medical care anyway - so should the US.
    To pay for it, try higher taxes, and lower input costs across the too powerful Pharmacutical and Healthcare industries.

    "America does not show its generosity by tipping - it shows its unwillingmess to pay a decent wage, thereby screwing the poor."