President Donald Trump and the national government have taken extraordinary measures to stabilize the economy during this difficult moment of our history. In fact, the President has signed legislation that has injected more than $2 trillion worth of stimulus aid into the economy. Plus, the nonpartisan Federal Reserve has injected at least $2.3 trillion into the economy; the Federal Reserve may end up spending over $10 trillion by the end of the year, thereby pumping significant amounts of liquidity into the market. But the aforementioned stimulus will not be enough to restore America to prosperity. Just this past Monday, Treasury Secretary Steven Mnuchin called for another round of stimulus to be added into the economy.
So what type of new stimulus is optimal? The appropriate type of stimulus would invest primarily in the sectors that are most in need of help and that have been disproportionately hurt by the COVID-19 pandemic. Moreover, the best response would concentrate resources on national interests and transcend partisan interests.
President Trump has rallied behind a targeted stimulus package that rises above mere partisan interests. On Wednesday, the President indicated that he would support a $1.5 trillion stimulus package that is being sponsored in the House by Representatives Tom Reed (R-NY), Josh Gottheimer (D-NJ) and about fifty other Representatives combined from both parties. This compromise bill centers around the essentials of what the medical and economic responses to COVID-19 demand: over $300 billion in direct payments to families, which may be the most important feature of the bill, $100 billion for COVID-19 testing and healthcare, $500 billion for state and local governments, $400 billion for election infrastructure and security and $50 billion for broadband investments.
President Trump deserves credit for his willingness to work with Democrats and use the resources of the national government to help the American people in the most necessary ways. It is true, of course, that President Trump is not in love with everything that is in this compromise bill. For example, the President correctly noted back in May that assistance for state and local governments would benefit most heavily in those regions of the country that have large deficits and which are run by Democrats (like my home state of New York), bailing out and taking responsibility for poor fiscal decisions made by Democrats. But in showing support for this compromise bill, the President appears willing to sacrifice partisan interests for national interests.
Sadly, the House Democratic leadership is not willing to put the interests of the nation over the interests of the party. That is, the House Democratic leadership is not supporting the compromise bill. Why? Because Speaker Nancy Pelosi wants to incorporate as much as possible of the radical Heroes Act into the next round of stimulus. Back in May, The Heroes Act failed to be signed into law, because the Act was essentially a Democratic wishlist. The Act includes, among other things, giving money to undocumented immigrants and providing debt relief to college students. And perhaps most interestingly, the Act would permit marijuana companies to access banking services. Solving these issues is clearly not necessary for creating a robust and proportionate response to the pandemic economy. But a proportionate response was obviously not what the Speaker had in mind. Instead, Speaker Pelosi was trying to capitalize on the urgency of responding to the pandemic by ramming through partisan legislation to remake America in the Democratic image. And the Speaker is still employing this strategy. When asked about progress on a stimulus package this past Tuesday, Speaker Pelosi went right to the Heroes Act and recommended that Republicans and the President support it. Thus, Speaker Pelosi is steadfast in trying to exploit the desperation of responding to the pandemic to pass her Democratic agenda. In so doing, she continues to put partisan interests ahead of those of the nation.