That’s correct. Unfortunately, Mr. Powell spoke as Congress has begun to divide along partisan lines about how much more to spend, when and for what purposes. House Speaker Nancy Pelosi (D-Calif.) has unveiled a $3 trillion measure, key provisions of which are $895 billion in cash for state, local, tribal and territorial governments and another round of direct payments to households potentially larger than the first, which cost an estimated $290 billion. The bill also includes $3.6 billion in new aid to meet a crucial non-economic need: helping as many voters as possible participate securely in the November elections.
The huge measure has no chance of passing the Republican Senate and is therefore part political statement, part opening bid in inevitable negotiations with the GOP. Republicans are balking, both because they insist on their own policy priorities, such as lawsuit protection for reopening businesses, and because they believe there’s “no rush” (President Trump’s phrase) to tee up more spending before the money already approved has had a chance to work.
Indeed, only about $1.4 trillion of Congress’s total $3.6 trillion in covid-19-related spending and tax relief had actually hit the economy as of May 8, according to the Committee for a Responsible Federal Budget. (Notably, Mr. Powell has yet to activate a $600 billion business lending program backed by capital Congress gave to the Treasury Department.) It’s also true that states have received significant federal help already and that the next installment must be based on carefully assessed needs — especially given the inevitable difficulties of asking taxpayers everywhere to help states, sometimes wealthy ones, where they don’t live.
Nevertheless, as even many Republican senators admit, red- and blue-state and local governments alike have taken a revenue hit and need aid, as will households — especially low-income ones — small businesses and health care. Ms. Pelosi’s bill is expensive, and studded with pet Democratic policies like reinstating much of the state and local tax deduction for federal income taxpayers. But it actually omitted much of the wish list of the House’s most progressive members, a bit of restraint Republicans could choose to see as a sign of Ms. Pelosi’s willingness to be pragmatic, as she has been in previous talks. Senate Majority Leader Mitch McConnell’s (R-Ky.) initial reaction was to denounce the House bill and double down on his demand for lawsuit protection. Republicans should start talking in earnest, sooner rather than later. The country’s needs are too urgent to withstand much more partisan posturing.