The time is now for elected leaders in Washington to focus urgently on protecting jobs. The economy is shedding jobs at an unprecedented pace, and only federal intervention can prevent many jobs in San Antonio and beyond from disappearing forever.
While efforts continue to contain the coronavirus spread as states reopen economies and public life, a deeply polarized White House and Congress are at a dangerous standoff over extending critical economic support to states, cities, businesses, unemployed workers, and families.
The nearly $3 trillion approved in four different relief bills signed into law so far in stimulus spending, small-business support, aid to cities, and efforts to fight the pandemic has served as an imperfect but vital bridge to carry a battered nation through the last two months. Unfortunately, this is not a short-term crisis.
The United States saw 20 million people thrown out of work in April, a historic record. The unemployment rate has surged from 4.4 percent in March to 14.7 percent in the space of eight weeks, a number not seen since the Great Depression of the 1930s. President Herbert Hoover’s legacy remains his failure to lead the country forward after the stock market crash of 1929 and the Dust Bowl of the 1930s that savaged American farmers. The Great Depression endured for a full decade.
The United States is strong, still the global economic leader with the world’s most trusted currency. It can afford to spend now to insure its future.
The U.S. Treasury can borrow and print money. The Federal Reserve has reduced interest rates to zero, purchased $2.4 trillion in government bonds, and will soon begin buying private-sector debt. Beginning with the Trump administration’s historic overhaul of federal tax law in 2017, Republicans have shown a willingness to engage in deficit spending equal to or exceeding anything previously envisioned by Democrats.
The two sides ought to be able to agree to deficit spending to protect the nation’s most vulnerable just as they have to benefit the most prosperous.
States and cities, meanwhile, are required to balance budgets. They lack the same tools to address unforeseen deficits and thus need Washington to help bridge spending on vital public services until state and local economies and tax collections begin to recover. More support will be needed from Washington in real time. It can’t happen without bipartisan support.
Here in San Antonio and throughout Texas, where more than 2 million workers (surely an undercount) have lost their jobs, much depends on the Trump administration and Republican-controlled Senate ending an impasse with the Democratic-controlled House of Representatives to extend unemployment benefits and support for small businesses, cities, and states. If nothing changes, expect the Democratic-controlled House to put forward a new spending bill this week and the White House and the Senate to reject it.
If the impasse endures for even one month, business bankruptcies are predicted to soar and, with them, the permanent loss of jobs. Such a scenario will prove far more expensive in the long run for the Trump administration or a new Democratic administration if voters deny the president a second term in November.
If San Antonio is any measure, jump-starting urban economies throughout Texas and in other states that have gambled on early openings will not lead to the kind of spending activity needed to bring businesses back to life. Governors can sign executive orders reversing shutdowns and encouraging a return to public life, but consumer confidence is being impacted now more by fear of contagion, which is stronger than any inclination to dine out or go shopping for unessential good and services.
Even if the coronavirus spread is diminished here and around the state, which has yet to happen, and people begin to feel safer to gather in public, consumer spending will be suppressed by rising unemployment and workers who fear they, too, could lose their paychecks.
Texas and other states with governors who issued orders allowing reopenings have taken the steps even though they did not meet the standards drafted by the Centers for Disease Control and Prevention or even the more lax guidelines suggested by the Trump administration, which spiked the CDC’s more stringent guidelines written by medical and public health specialists and prohibited their publication and release.
A worse scenario in the coming weeks and months would be one where the reopenings trigger a new spike in the spread of the virus. That will send people back into home shelter and send subject the economy to new aftershocks.
By week’s end, more than 1.25 million Americans had tested positive for the coronavirus, and more than 75,400 had died. The real numbers are higher.
New funding for unprecedented levels of testing, contact tracing, and containment is critical, as is the economic lifeline Washington’s polarized leaders agreed to earlier in the pandemic. To do less is to risk plunging the country into a much deeper abyss.