There’s no way Republicans would agree to the new $3 trillion Pelosi bill, right? A $900 billion bailout for the states, $75 billion for mortgage bailout, $100 billion for a renter bailout, $25 billion for the U.S. Postal Service, a $100 billion bailout for schools that didn’t lose any money and actually saved on overhead, and another round of $1,200 checks for adults making up to $75,000 along with the same amount per child, even if they never lost any income during the shutdown. There’s no way Republicans will support this, right? Wrong.
Republicans already passed a bill pretty similar to this one, and the same man who negotiated that bill for Trump doesn’t appear to have a problem with new spending. CNBC reports that Treasury Secretary Steven Mnuchin was “unfazed” by the staggering debt we are amassing because of our strategy to deal with coronavirus. “One of the reasons I do feel comfortable with us spending all this money is because interest rates are very low. And we’re taking advantage of long-term rates,” Mnuchin said on CNBC’s Squawk on the Street earlier this week.
Doesn’t he sound like a used car salesman?
What Mnuchin won’t tell you is that one of the reasons we have failed to grow our economy at 3% any year since 2005 and 4% since the late 1990s is precisely because the existing debt already weakened our ability to use peak employment for efficient economic growth. We cannot possibly comprehend how the bills they already passed will alter our economy for years to come.
But the broader implication of Mnuchin’s comments is that Republicans and the White House, absent early and vigorous opposition from conservatives, will likely go along with some form of this new bill. That is what they have done every time.
Unlike the White House, Democrats actually practice one of the dictates of “Art of the Deal,” which is always to ask for more than you think you will get. This is why they ask for slightly more money than they want and also stick in extraneous provisions dealing with other political priorities. For example, they originally only asked for a $500 billion state bailout and have now upped it to $900 billion.
Then Republicans, rather than militating against the entire premise of the lockdown and the faulty law and science behind it, as well as the premise of subsidizing unemployment and encouraging lockdown, agree to the entire strategy. However, they spend 100% of their time focusing on extraneous provisions of the bill or the exact dollar amount or structure of the socialist programs that they ultimately agree to.
Remember the GOP obsession with the Kennedy Center funding last time around? You would have thought that was the subject of the bill, judging by the rhetoric of Republicans during that debate. In fact, any sane person would have traded the Democrats a gold-plated Kennedy Center in return for not fueling and incentivizing a lockdown, bankrupting our nation, and creating monopolies for large conglomerates in every industry that we cannot even begin to imagine in the coming years. Republicans agreed to all of this before, and there is no reason they won’t agree again. In fact, Trump is already promising a state bailout to reward the states for destroying the country.
The first step for Republicans to properly fight the next legislative battle is to admit they were wrong to go along with it the first time. They must admit that the first $3 trillion bill they passed, along with the Federal Reserve shenanigans, will destroy small business in this country by creating artificial monopolies for large companies hooked into the orbit of the government – the same way Obamacare destroyed private practice and small insurers in health care, the bank bailouts destroyed community banks, and the recent farm bills destroyed family farms. Now, every industry will look like those three industries, where you can count the number of players on one hand. The bill passed by Congress will create more artificial inequality than anything a free market could have done in a thousand years.
According to researchers at the University of Illinois, Harvard Business School, Harvard University, and the University of Chicago, at least 100,000 small businesses will permanently close. What about the pathetic “stimulus” bills and Mnuchin’s promise of virtually free debt? Yeah, those market distortions actually hurt small businesses. As the Washington Post explained:
The result is likely to further shift the balance of power — and jobs — toward big businesses that have a better chance of surviving the uncertain year ahead by borrowing money or drawing on large cash reserves. Emergency actions by the Federal Reserve, backed by the Treasury, have made borrowing money almost free for large companies. In the 1980s and 1990s, small businesses employed over half of American workers, but that dynamic has shifted over time. By 2017, only 47 percent of private-sector employees were at small businesses, and the pandemic appears to be reducing that again.
Then there are the indiscriminate checks being mailed out to people who never lost their jobs. So much money was wasted that divorced families are now getting duplicate checks for the same child. Dead people are getting checks in the mail, as well as foreign nationals. $1 billion intended for small business wound up being mailed to public companies. Even nonprofits, including Muslim Brotherhood mosques, received funding. Has any Republican who supported the bill recognized the mistakes?
Once they recognize their errant ways, then we can trust them to actually fight the meat and potatoes (not just the gravy) of the Pelosi pander bill, conditioning funding on ending lockdowns permanently, targeting the money for reparations, not crony stimulus programs, and creating a true stimulus built on tax and regulatory cuts, not welfare. We need a paycheck bill, not a welfare and socialist monopoly bill.
However, that would require Trump to fire Mnuchin and actually appoint a negotiator who is somewhat different from what we would see under a Biden administration. Mnuchin is to fiscal policy what Fauci is to the lockdown policy – indistinguishable from the Democrats.
So yes, Senate Majority Leader Mitch McConnell and Republicans might promise that this bill is “dead on arrival” in the Senate, but it’s only dead in this exact form. The more they focus on fighting the cranberry sauce and pecan pie of the bill, the more we will see them acquiesce to the turkey itself. Like Lucy and Charlie Brown with the football, this happens every time.