Mar 24, 2020

The House Democratic COVID-19 Bill Is a Big Mess

Many provisions in the $2.5 trillion bill would do little to fight the pandemic or stimulate the economy
Veronique de Rugy Senior Research Fellow , Tad DeHaven Staff Writer

The Republican-controlled Senate and White House are putting the finishing touches on their massive legislative response to the COVID-19-induced economic crisis. The agreement-to-come in the Senate would spend approximately $2 trillion on questionable provisions ranging from bailouts for industries to bailouts for state governments to direct cash handouts to individuals regardless of need. House Democrats have released their own 1,432-page plan, which would see those provisions and raise them a reported $500 billion—tied, of course, with a slew of regulatory dictates designed to appeal to the party’s base.  

The real purpose of the House proposal may be to provide Senate Democrats with leverage in their negotiations with Republicans and the White House. Nevertheless, the contents of the proposed House bill offer strong proof that many policymakers wish to exploit COVID-19 as an excuse to grind well-worn policy axes.

The House bill can be divided into three categories: those unrelated to the crisis, those related to the crisis but excessive in scope and expense, and those that are related to the crisis but promote bad policies. Alas, none of the provisions are both related to the crisis and promote good policies.

Unfortunately, there isn’t time to comment on every item in this 1000-plus page bill as negotiations are likely to conclude today. (Of course, members of Congress who will be voting on this bill haven’t had time to read, and let alone digest, this multi-trillion-dollar text either.) Therefore, we offer a brief sampling from the House plan that will give readers an idea of the package’s intentions.

A spending free-for-all

The bill would allocate hundreds of billions of dollars to different federal agencies and programs. It is hardly clear that a lot of this money is necessary for immediate COVID-19 response needs. Rather, it looks like extra pork for the already fatty billions in regular appropriations that these bodies receive. Here are some of the goodies:

There is plenty of money in this bill for agencies to hand out as corporate welfare. It dedicates extra funds for programs that traditionally support commercial interests, like the Economic Development Administration, the Manufacturing Extension Partnership program, and Community Development Block Grants.

There is also a lot of extra money for programs with dubious or no connection to the crisis, including Juvenile Justice grants, unrelated Army Corps of Engineers projects, broadband access subsidies, Federal Aviation Administration grants for sustainable aviation fuel development, a “cash for clunkers” program for airplanes, a permanent expansion of Affordable Care Act premium subsidies, a technology modernization fund for the federal government, as well as additional funds for the Kennedy Center, National Endowment for the Arts, National Endowment for the Humanities, and Corporation for Public Broadcasting. As if that isn’t enough, billions of dollars would be appropriated to erase the US Postal Services’ $11 billion debt along with an additional $25 billion to keep the government’s anachronistic mail monopoly operating into the future.

Even the additional funding for agencies and programs that could be classified as crisis-related come with funds for administrative overhead costs which makes one wonder if the money is merely padding bureaucracies or actually financing immediate virus-related needs. Multiple agencies would receive additional money for similar efforts including telehealth promotion, health-related research and development, broadband expansion, and undefined “support activities to prevent, prepare for, and respond to coronavirus.” Indeed, it looks as if the House committees simply took the federal agencies and programs under their purview, pulled large numbers out of a hat, and passed them along to leadership to package together.

Direct cash payments

Each of the plans under consideration contains some element of a direct cash payment scheme to all or most Americans to counteract the economic downtown and help people through times of tight finances. Under the House plan, everyone would get $1,500 plus $1,500 per child up to a total of $7,500. But welfare programs would increase too. The bill would include additional money for the USDA’s emergency food assistance program, child nutrition programs, Head Start, the Low-Income Home Energy Assistance Program, support for paying water bills, housing assistance, an expansion of the Child Tax Credit, an effective blank check for the Supplemental Nutrition Assistance Program, and an across-the-board relaxation of program eligibility requirements.

Added support for low-income populations is understandable even if, like us, you’re not a fan of the federal government’s system. But even if one believes that all the additional resources are needed for low-income populations, wouldn’t it be more effective and efficient to skip the federal and state bureaucracies and have the funds go directly to eligible recipients?

A political grab bag

Unfortunately, many of the provisions in the bill are not even hidden as some kind of response to the pandemic. They are clearly a grab bag of pre-existing policy aims tacked onto to an emergency bill that must be quickly passed.

For example, student loan debt—long a bugaboo of the Democrats—would be reduced by $10,000 per student. Multiemployer pension plans that were failing before the crisis would be bailed out. Collective bargaining provisions are also included, which would do little to help our healthcare workers or our recently unemployed but would certainly curry favor with the Democratic Party’s base.

Like the Senate bill, the House version contains plenty of corporate bailouts, which would be bad enough on their own. But the House measure compounds matters by including conditions that are red-meat for the Democratic Party’s base: things like requiring a $15 minimum wage, or specifying diversity requirements for companies and boards, or promoting climate change policies. Regardless about how one feels about these issues, they shouldn’t be included in an unrelated emergency legislation.

The bill does contain a good amount of assistance for workers—surely a more worthy recipient of government largesse than bloated corporations who did not run their businesses very well. But if policymakers are unhappy with how the corporations who would receive this assistance have managed their finances in recent years, there is a simple solution: don’t bail them out.

Letting a good country go to waste

Americans are rightly cynical when it comes to their faith in the federal government’s ability to respond to the COVID-19 pandemic. Regardless of whether one generally supports the underlying policy aim of the House bill, the fact remains that much of it should be considered through the traditional legislative process: not an emergency bill. Unfortunately, it’s a time-honored tradition in Washington for both Republicans and Democrats to use a crisis for politically self-serving ends.

Photo by Alex Wong/Getty Images

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