Americans urgently need Congress to deliver a fresh round of economic aid. Millions of people who lost jobs in the spring are reaching the end of their unemployment benefits. Many have fallen behind on rent or mortgage payments. Many do not have enough to eat.
A wave of good news about vaccines offers reason for hope that the coronavirus pandemic will loosen its grip next year and that economic growth will accelerate. That makes it all the more important to build a bridge allowing people to get through the winter months.
It is heartening that legislative leaders in both parties say they want a deal before heading home for the holidays. A $908 billion proposal advanced by a bipartisan group of senators offers a reasonable starting point. It’s not enough money, but Republicans are refusing to do more, and Democratic leaders have concluded that some aid is better than nothing.
President Trump now appears to have lost interest in leading the country. But President-elect Joe Biden has stepped into the void, repeatedly urging the necessity of an aid deal and rightly arguing that Congress can do more next year.
“It’s just the start,” Mr. Biden said on Friday. “Congress will need to act again in January.”
The need for aid has been obscured to some extent by the rise of the stock market and by seven consecutive months of job growth. But stocks are owned mostly by the wealthy, and the jobs gains need to be placed in the context of the enormous job losses in the early months of the pandemic. Even after those months of job growth, the share of Americans who have lost jobs and have not found new ones is greater than in any other year since World War II.
We are climbing out of a hole so deep that we’re still farther down than we’ve been before.
Nor is it sufficient to rely on coronavirus vaccinations to revive economic growth. Bringing the pandemic under control is a necessary precondition for recovery, but it won’t happen soon enough to protect millions of workers and businesses from experiencing deep damage to their fortunes. Some of that damage, like the closure of a business or the loss of a home, may not easily be reversed even once it is safe for people to return to something like normal life.
In the early months of the pandemic, the government took strong and effective action to limit the economic fallout, pumping trillions of dollars into the economy. But the flow of aid has been dwindling since the summer, and several programs are on the verge of ending.
About 12 million Americans are currently receiving federal unemployment benefits under pandemic programs that are scheduled to expire at the end of the year. The federal government is sending weekly checks to roughly 7.3 million freelance and contract workers who are not eligible for standard state unemployment benefits. It also is sending checks to 4.6 million workers who have exhausted their eligibility for state benefits.
In normal times, cutting off benefits is intended to encourage people to look for work. In the midst of a pandemic, with few jobs available and public health authorities urging people to stay home, that amounts to mindless cruelty.
The end of a patchwork of restrictions on evictions and foreclosures threatens to expose millions of families to eviction. According to the Census Bureau, 6 percent of homeowners and 16 percent of renters reported in mid-November that they were behind on their rent or mortgage payments.
Businesses also need help, particularly as state and local governments impose a new round of restrictions. The number of small businesses nationwide was 29 percent lower in November than at the beginning of the year, according to Harvard’s Opportunity Insights project. Without federal aid, many more restaurants and stores simply will not survive.
The consequences extend beyond a few months of pain. Rebuilding is much harder than preserving. As businesses close, there are fewer jobs for workers to reclaim. Workers who lose their homes may be forced to move — away from former jobs, schools, communities.
It is worth emphasizing that there is no substitute for congressional action. State and local governments lack the resources; unlike the federal government, they cannot run deficits.
The Federal Reserve is engaged in a wide-ranging effort to support the economy by making it cheap and easy to borrow money, but the painfully slow pace of recovery following the last recession provided an object lesson in the limits of relying on low interest rates.
Investors are eager to lend money to the federal government, and borrowing costs are low. Those raising concerns about future interest payments on federal debt tend to compare the burden with the present size of the American economy. But as the economists Jason Furman and Lawrence Summers argue in a new paper, it makes more sense to compare future payments against future economic output, and by that measure, the burden looks a lot less scary. There’s no guarantee of future growth, of course, but that’s the point: Invest in economic recovery now, and the nation’s debts will be easier to pay tomorrow.
The compromise now on the table is flawed. It does not provide enough help for state and local governments or for workers. In addition to providing necessary financial help for businesses, it includes a twisted provision providing special legal protections to businesses that fail to protect their workers. But there is no obvious benefit in turning it down.
Millions of Americans are suffering. The situation is deteriorating. Send money now.