Sadly, partisan politics prevailed over partnership as two sides failed to reach a common high ground on a second round of coronavirus relief funding that both agree is urgently needed.
Circumstances for agreement appeared far more optimistic as recently as last weekend. On Friday, Oct. 2, President Trump tweeted from Walter Reed National Military Center where he was hospitalized: "OUR GREAT USA WANTS & NEEDS STIMULUS. WORK TOGETHER AND GET IT DONE. Thank you!"
On Sunday, House Speaker Nancy Pelosi, D-Calif. told NBC's "Face the Nation," that "We're making progress."
By Tuesday, all prospects for reaching a pre-Nov. 3 election relief package budget and term agreement were bleak to blown. Pelosi and her side of the House put an all-or-nothing offer on the table not to accept anything below $2 trillion.
According to The Wall Street Journal, the Trump administration and GOP Senate majority reportedly set a top limit of $1.6 trillion, an amount equal to about half of the federal budget a few years ago. This was on top of the more than $3 trillion of coronavirus relief measures that the Congress and White House approved earlier this year.
In short, Pelosi wouldn't budge, and Trump – for very good reasons – walked.
In addition to compounding already spiraling federal debts, that extra $400 billion of ransom extortion money was planned for distribution bailouts to Democrat-led states and cities that have delayed economic recovery through overly long and restrictive lockdowns and general self-inflicted mismanagement.
The White House continues to support individual assistance packages for airlines and small businesses which both parties have previously endorsed. Last Tuesday President Trump tweeted, "If I am sent a Stand Alone Bill for Stimulus Checks ($1,200), they will go out to our great people IMMEDIATELY, I am ready to sign now."
Democrats have insisted on a broader "everything" deal. Not wishing to give the president any pre-election benefit, Speaker Pelosi said on "The View" that "All he has ever wanted in the negotiation was to send out a check with his name printed on it."
Contrasts between influences of Democratic versus Republican state lockdown policies and economic consequences, however, are dramatic.
Personal earnings dropped most in Democratic states like New York (-27.5%), New Jersey (-31.5%), California (-30.8%) and Connecticut (-29%) with stricter and longer closures. Forced construction shutdowns contributed significantly to earnings reductions in New York (3.1 percentage points), Washington (2.48) and New Jersey (1.62).
Republican states including Utah (-14%), Arizona (-18.1%), Texas (-21.6%) and Florida (-22.3%) that let more industries operate and others gradually reopen had smaller declines. States that allowed residential and commercial construction this spring like Arizona (0.25%), Florida (0.62%) and Georgia (0.80%) also experienced much smaller earnings declines.
Although most states paused nonessential health care during the early days of the pandemic, some maintained restrictions longer and broader than necessary to respond to or prepare for an infection surge. As a result, healthcare earnings fell much more in New York (-3.7%), New Jersey (-3.73%) and California (-2.28%) than Florida (-1.57%), Arizona (-1.58%) and Texas (-1.86%).
The Wall Street Journal calculated that the per-capita annualized increases in transfer payments that many Democrat-run states received were nearly double what GOP-run states did: New Jersey ($14,033), Illinois ($9,223), New York ($9,030), California ($8,673), Washington ($8,511), Oregon ($8,258) and Connecticut ($7,879) - versus Texas ($6,450), Indiana ($6,085), Tennessee ($5,430), Florida ($5,399), Georgia ($5,353), Arizona ($5,326) and Utah ($5,184).
These seven Democratic states hauled in 24% more in transfer payments relative to their share of the U.S. population, while the seven GOP states collected 23% less.
Nevertheless, by August those same Democratic states continued to post much higher unemployment rates: New York (12.5%), California (11.4%), Illinois (11%), New Jersey (10.9%), Washington (8.5%), Connecticut (8.1%) and Oregon (7.7%). By comparison, Republican Utah reported 4.1% unemployment, Georgia (5.6%), Arizona (5.9%), Indiana (6.4%), Texas (6.8%), Florida (7.4%) and Tennessee (8.5%).
Help from Congress's paycheck-protection loans was insufficient to enable countless small businesses to survive prolonged and severe Democrat closure and operating restrictions. In addition, enhanced $600 weekly unemployment benefits may often have made conditions even worse by reducing incentives for laid-off workers to later return to work.
University of Chicago economists recently estimated that 76% of unemployed workers made more from the $600 weekly jobless benefit enhancement than by working; the median wage replacement rate was 145%.
The longer workers stayed unemployed the more extra cash they received, and many probably have savings they can draw on while they intentionally stay on the labor market sidelines. Recognizing this work disincentive, President Trump reduced that benefit enhancement to $300 weekly beginning in August.
As discussed in my May 6 column, "No to Leveraging Coronavirus for Old State Debts," congressional Republican legislators are strongly and rationally disinclined to allow fiscally mismanaged states to use COVID relief transfer funds to bail out chronically underfunded, underwater pension plans as many Democratic governors have requested.
Whereas, for example, Florida's pension system was recently funded at about 84%, those of Illinois (38%), California (70%), and New Jersey (36%) are in a bad way despite imposing significantly higher taxes. Simply put, it's irresponsible to take money from America's taxpayers and use it to save generations of liberal politicians from consequences of reckless spending.
State and local government leaders have responded to shortfalls by raising taxes in hopes that the inevitable free-fall economic death spiral wouldn't occur during their terms in office — or before their personal pensions miraculously got bailed out by some remarkably naïve benevolent benefactors — the taxpayers in other more responsible states perhaps.
They must now be counting on a wonderfully unified American spirit of COVID-19 crisis generosity as a timely federal hand-out opportunity not to be wasted.
Yes, we all do share a huge stake in supporting this national recovery effort. So let's sensibly open up this country again and allow enterprise and prosperity to resume.
Larry Bell is an endowed professor of space architecture at the University of Houston where he founded the Sasakawa International Center for Space Architecture (SICSA) and the graduate program in space architecture. Larry has written more than 700 articles for Newsmax and Forbes and is the author of several books. Included are: "How Everything Happened, Including Us" (2020), "Cyberwarfare: Targeting America, Our Infrastructure and Our Future" (2020), "The Weaponization of AI and the Internet: How Global Networks of Infotech Overlords are Expanding Their Control Over Our Lives" (2019), "Reinventing Ourselves: How Technology is Rapidly and Radically Transforming Humanity" (2019), "Thinking Whole: Rejecting Half-Witted Left & Right Brain Limitations" (2018), "Reflections on Oceans and Puddles: One Hundred Reasons to be Enthusiastic, Grateful and Hopeful" (2017), "Cosmic Musings: Contemplating Life Beyond Self" (2016), "Scared Witless: Prophets and Profits of Climate Doom" (2015) and "Climate of Corruption: Politics and Power Behind the Global Warming Hoax" (2011). He is currently working on a new book with Buzz Aldrin, "Beyond Footprints and Flagpoles." Read Larry Bell's Reports — More Here.
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