The Washington PostDemocracy Dies in Darkness

Opinion Americans still need pandemic aid. Trump is ensuring they’ll get nothing.

President Trump at a rally in Duluth, Minn., on Sept. 30.
President Trump at a rally in Duluth, Minn., on Sept. 30. (Jabin Botsford/The Washington Post)
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WE DO not pretend to understand the political logic that impelled President Trump to call off talks over a new economic support package with House Speaker Nancy Pelosi (D-Calif.). An agreement could have boosted his flagging electoral prospects; and surely his popularity among Republicans gave him the clout to overcome the hesitancy of some GOP senators to vote yes on any package, which was apparently one factor in his decision.

What is evident, though, is that Mr. Trump has made the wrong call for the U.S. economy. It remains weak due to coronavirus-related limitations, especially in sectors such as retail, airlines, restaurants and hotels. Unemployment is still at 7.9 percent — concentrated among low-income workers, who are disproportionately Black and Latino — and temporary job losses are mutating into permanent ones. Federal Reserve Chair Jerome H. Powell is openly calling for more aggressive fiscal intervention, warning policymakers not to focus on “the risks of overdoing it.” And yet Mr. Trump, with $800 billion separating Ms. Pelosi’s $2.4 trillion offer from his $1.6 trillion proposal, refuses to budge. His subsequent tweets offering to sign separate bills bailing out the airlines and sending a new round of rebate checks to households amounted to a transparent effort at political damage control, not a good-faith effort to restart negotiations.

Full coverage of the coronavirus pandemic

Mr. Trump’s position would be legitimate, even admirable, given its political costs, if based on some issue of higher principle. That is not what’s going on, though. The president’s main objection, and that of his party, is that Ms. Pelosi is demanding too much money for state and local governments, which Republicans call “a blue state bailout.” Mr. Trump derided Ms. Pelosi for wanting to “take care of Democrat failed, high crime, Cities and States.”

In truth, the novel coronavirus has had the same general effect on all states, well-run and otherwise: It has cost them revenue while forcing them to spend more. This is not a case of “moral hazard.” What’s more, economic research suggests that federal support for state and local budgets stimulates overall economic growth more effectively than many other forms of spending during recessions, in part because it enables jurisdictions to keep taxes down while continuing to employ police, firefighters, sanitation workers and teachers. (States and localities have already been forced to lay off 1.2 million people since February.) The economic fate of all states in the union is ultimately intertwined. Casting the issue as an attempted raid on Texas and Florida by New York and California is not just economically illiterate but also politically divisive — unconscionably so.

No doubt Ms. Pelosi’s initial “ask” for state and local aid — nearly $1 trillion — was too high when she first put it into a House bill five months ago. Yet the National Governors Association, a bipartisan group, had called for $500 billion in April, and Mr. Trump’s own negotiator, Treasury Secretary Steven Mnuchin, had recently been willing to accept $250 billion in a previous round of talks. Clearly the wrong answer would be “nothing,” but by quitting the negotiations now, Mr. Trump may have ensured that that is what the American people get.

Read more:

Catherine Rampell: Trump blows up stimulus talks, and with them perhaps his chances of reelection

Kate Cohen: America is failing everyone now. That’s what gives me hope for change.

The Post’s View: The U.S. economy needs modernization. We can’t wait another 4 years for that to happen.

Fareed Zakaria: The pandemic upended the present. But it’s given us a chance to remake the future.

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