The Next Federal COVID-19 Relief Package Explored

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The Next Federal COVID-19 Relief Package Explored

Published: Wednesday, August 5th, 2020 @ 10:26 pm
By: John Locke Foundation ( More Entries )

Publisher's note: The author of this post is Mitch Kokai for the John Locke Foundation.

Robert VerBruggen of National Review Online highlights the latest haggling on Capitol Hill over COVID-19.

You can give House Democrats credit for one thing: When they realized that another COVID-19 relief bill would be necessary, they got right on it. Their HEROES Act - I won't bore you with the full name - has been passed and sitting on the shelf for a couple of months now. Senate Republicans, by contrast, just unveiled their HEALS Act proposal this week, as the previous round of unemployment relief approached its end-of-July expiration date.

Thus, we're in for another one of those confusing bursts of last-minute legislative chaos, in which major provisions change constantly as the House, the Senate, and the White House try to whip up something they can all agree on. More than likely, we'll find out too late about a bunch of drafting errors and unintended loopholes, but that's Washington for you.

A big-picture way of thinking about the debate is this: The Democratic bill would cost $3 trillion, while the Republican bill would apparently cost around $1 trillion. ...

... The gap mainly boils down to this: The House bill would give a lot more money to state and local governments, and also to sympathetic constituencies ranging from the unemployed to those with student debt.

Social distancing, both voluntary and government-mandated, has wrought utter havoc on the economy, which obviously hurts state and local budgets as well. And while the federal government can easily borrow money, state and local governments have far less borrowing capacity and are often subject to balanced-budget rules. Helping them out could prevent them from reducing services, laying off workers, or even going bankrupt - but depending on how it's structured, relief could also bail states out of their own self-made problems or encourage them to lock down for longer than necessary.

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