Sens. Elizabeth Warren and Bernie Sanders rose to prominence via outrage over a $700 billion rescue for Wall Street in 2008. Rep. Ilhan Omar (D-Minn.) regularly rails against corporations as a member of the liberal “squad.” Rep. Pramila Jayapal (D-Wash.) co-chairs the House Progressive Caucus.
Yet all four, with varying degrees of enthusiasm, backed the $2 trillion stimulus signed into law Friday. While that earlier package sparked fury and a rebirth of liberalism that remains a powerful force today, this year’s version is largely winning acceptance from the populist left.
That support for a measure that includes roughly a half-trillion dollars for America’s largest companies reveals how the coronavirus pandemic, with its life-or-death terrors, has altered the country’s political DNA, transforming some of the nation’s most fiery politicians into team players. At the same time, the bill’s substantial aid for working Americans reflects how the country’s leaders have taken to heart the left’s critique of the 2008 bailout.
“Everybody understands that this is an absolute desperation measure for the whole country,” said Rep. Jamie Raskin (D-Md.), an outspoken liberal and a member of the House Progressive Caucus. “We have tens of millions of people being thrown out of work. The hospitals are stressed to the point of collapse. The states and cities are completely overburdened, the public health systems are on the precipice. So, you know, there’s really no choice.”
Many liberal groups — even on far left — stopped short of calling for lawmakers to vote “no” on the package, instead hinting they’ll put up a bigger fight over a fourth potential relief package — two had been approved before Friday’s — that Congress could pass if the current one proves insufficient.
Beyond the urgent nature of the outbreak, another mitigating factor for progressives is fault: the corporations due to receive help in Friday’s bill did not cause the health crisis, unlike in 2008, when the same financial institutions that liberals say crashed the economy received the benefit of a generous government action.
Riding the resulting resentment, the Occupy movement erupted in 2011, Sanders mounted two powerful presidential runs, ideas like a wealth tax gained new currency and liberal newcomers like Rep. Alexandria Ocasio-Cortez (D-N.Y.) catapulted into Congress.
Certainly many liberals are also queasy about the aid to corporations in the current stimulus bill. The legislation creates a fund of more than $400 billion for loans and loan guarantees for large companies — a pool of cash that economists say companies will be able to leverage into trillions of dollars in new financing.
Passenger airlines like Delta and United will have access to $25 billion in federal grants and another $25 billion in loans. Industries considered critical to national security can access a separate $17 billion pool of loans — partly a carve-out for Boeing, the struggling aerospace manufacturer.
Missing from the legislation are liberal priorities including a $200-a-month boost in Social Security payments, $10,000 in federal student loan debt cancellation, free health care for those sickened by the virus and a robust fund to create a vote-by-mail system for this year’s general election.
“What’s so offensive to progressives is that you have corporations feeding at the public trough again,” said Jeff Cohen, a co-founder and policy adviser for RootsAction.org, one of the few liberal groups to flat-out oppose the bill. “Whenever there’s a crisis, corporations increase their wealth, power and hegemony. And that seems to be what’s happening here.”
But Cohen said he understood the support shown by liberal lawmakers. Speaking of Sanders, whom his group endorsed for president, he said, “There are many in his base who believe that corporations taking advantage of this crisis is more evidence that Bernie’s critique of the system is totally correct. It doesn’t even matter how he votes.”
Ocasio-Cortez, who considered opposing the measure but did not do so, still took to the House floor to voice liberals’ frustration over what they consider a huge trade-off.
Calling the measure “one of the largest corporate bailouts with as few strings as possible in American history,” Ocasio-Cortez said it was “shameful” that liberals faced a choice between giving Americans nothing, by voting no on the bill, or providing a big boost to corporations.
The measure will “contribute to the largest income equality gap in our future,” she predicted.
But other liberals focused on changes they won since the rollout of the first version of the Senate bill, which initially included far less oversight of the companies receiving money. The final version, in contrast, includes restrictions on stock buybacks, executive raises and dividend payouts.
In addition, Warren successfully pushed for an oversight panel that will evaluate how the money is distributed, along with an inspector general to watch for fraud and abuse. She chaired a similar panel created as part of the $700 billion Troubled Asset Relief Program passed in 2008.
Airlines will have to report loans within 72 hours, instead of six months as Republicans initially proposed. Other companies must report loans within two weeks, compared with the initially proposed six-month period.
Warren spoke with Senate Minority Leader Charles E. Schumer (D-N.Y.) about a dozen times as Democrats pressed for changes in the Senate bill, including a phone call shortly before the vote when she pushed for more transparency for the loans, according to a person familiar with the conversations who spoke on the condition of anonymity to discuss them frankly.
In a sign of Democratic leaders’ urgent desire to be seen as working with the party’s liberal flank, Schumer frequently credited Warren in news interviews. Warren recently dropped out of the Democratic presidential race, while Sanders is still assessing his options, and party leaders would fervently hope to bring their supporters into the fold.
“Frankly, Elizabeth Warren, who’s had experience with this, with the TARP, helped us, had many suggestions we incorporated into making the accountability provisions,” Schumer said on MSNBC’s “Morning Joe.”
Taking a cue from former presidential candidate Andrew Yang, who called for a universal basic income of $1,000 a month, the legislation signed Friday would provide $1,200 payments to adults with annual incomes up to $75,000, plus another $500 per child.
Many liberal activists were most enthused about the changes to unemployment insurance. Benefits will be boosted by an additional $600 per week, a significant increase given that the average unemployment check is $300 per week.
The legislation also allows freelancers and gig workers to receive unemployment benefits for the first time, including those who cannot go to work because they contracted the virus.
“I would call it the biggest reform in unemployment since the act” that created the current unemployment system in 1935, said Larry Cohen, chairman of Our Revolution, a nonprofit launched by Sanders after his 2016 presidential campaign. “People had been pushing it, like pushing a boulder up a hill. . . . It’s a major breakthrough.”
He added, “You’re not going get perfection in the U.S. Senate that has a majority of Republicans. But I couldn’t have imagined a better bill coming out of that Senate.”
Beyond the actual contents of the package — an increase in government spending and authority that would have been unthinkable just weeks ago — liberals hope the stimulus sets the stage and creates a paradigm for further action.
The staggering cost of the package — at $2 trillion it’s nearly half of the $4.45 trillion spent by the federal government in 2019 — is raising hopes among some liberals for a wealth tax.
Warren put a proposed wealth tax at the center of her presidential campaign, and Sanders adopted a similar idea. Polls suggest the idea is popular with voters, though top officials in both parties are wary of it.
“The federal government, and every state and local government, are going to need new revenue to meet the people’s urgent needs,” said Joe Dinkin, the national campaigns director of the Working Families Party. “Progressives will push hard for a Warren-Sanders-style wealth tax to meet those needs.”
That may be part of the next fight, which is already being discussed by liberals and groups that support them, even while Republicans are urging caution before jumping into another round of massive government spending.
“Everybody has made their peace with the situation,” said Raskin. “The next round you’re going find the progressives punching real hard for liberal priorities.”
Heather Long contributed to this report.