The Biden administration’s COVID-palooza is with the U.S. House, which probably will pass it Tuesday and send it to the president so he can sign it Wednesday. Democrats cite public opinion polls with 76% backing the bill.
I’d wager a nontrivial amount of money that 76% of any scientific polling sample couldn’t tell you what’s in the bill other than the $1,400 checks … if that.
I’ll remain silent on whether tossing an extra $1.9 trillion in this economy would “overheat” things. I’m a journalist, not an economist. It’ll be months before much of the money actually goes anywhere.
But it’s clear the economic recovery is underway, even before this bill become law.
Here’s two genuine howlers in the bill:
• Private pension bailout. The bill commits $86 billion to prop up multi-employer private pension plans. The New York Times reported these plans, “bring groups of companies together with a union to provide guaranteed benefits.” The employees, from retail clerks to delivery drivers to construction workers, often move from job to job. And this work force is getting older, retiring, and stressing out their pension plans. The plans have chased high-risk investments that haven’t kept pace with the plans’ baked-in liabilities.
“As the work force ages, an alarming number of the plans are running out of money. The trend predated the pandemic and is a result of fading unions, serial bankruptcies and the misplaced hope that investment income would foot most of the bill so that employers and workers wouldn’t have to.”
The feds normally require ailing private pensions to take loans and restructure benefits. They haven’t handed over tax money, especially without strings. Since the bailout doesn’t require the companies to change their investment strategies, the plans can continue throwing money at risky schemes. If the pensions fail, Uncle Sam will step in. (See “moral hazard.”)
• State government bailout. Roughly 20% of the $1.9 trillion will go to state and local governments, presumably to cover lower tax collections and higher state spending from the pandemic. (Another $130 billion heads to K-12 schools, “ostensibly to help them make the health and safety adjustments necessary to reopen for in-person learning,” as The Dispatch put it). This bailout gives a mulligan to states that managed finances poorly even before the pandemic.
It also indirectly says states (including North Carolina) that managed the people’s money well before and during the pandemic are suckers. No matter. You get a bailout! You get a bailout! Everybody gets a bailout!
A researcher at the Urban-Brookings Tax Policy Center, a nonpartisan think tank, found that total state revenues from April through December were down just 1.8 percent from the same period in 2019. Moody’s Analytics used a different method and found that 31 states now had enough cash to fully absorb the economic stress of the pandemic recession on their own.
To be sure, many local governments that rely on dedicated local taxes are in awful shape. Just spitballing here, but you could make a case for temporary loans or even direct aid targeted to the ones in the worst shape. But the bill doesn’t do that.
Then there’s the debt pile on. Dealing with federal debt may not be an immediate problem, but life can sneak up on you fast. Inflation, soaring interest rates, credit crunches, cuts in retirement programs. They’ll happen. We don’t know when. Buckle up when they do.
Praise all around
The inaugural Deregulator Standing O goes to … The Rev. Willam Barber, who on Friday very publicly received his COVID-19 vaccination. Rev. Barber has done many vexatious things to delay and obstruct sensible, right-leaning policies. But Friday, he did something that literally should save lives.
He receive the vaccine in public, at PNC Arena, with the cameras rolling. He sent a message to members of low-income and minority communities, who’ve been among the most skeptical of the need for or the effectiveness of the vaccines. (An outstanding piece on this at northcarolinahealthnews.com.)
“Let people know they don’t have to die,” Barber said. “They don’t have to get sick and go to the hospital.”
Well done, sir.
State Senate leader Phil Berger and Sen. Deanna Ballard of Watauga County, the education committee chair, have scheduled a 3 p.m. news conference to discuss getting kids back in class and … another attempted override of Gov. Cooper’s veto of the reopening bill.
The responses I got from Friday’s “internal review” were constructive and helpful. I’m taking them to heart. Thank you!
The main thing I heard: Too many posts! This week, I’ll cut back to four — three to everyone, one behind the paywall.
Next: Pick a lane (or a couple) and, with a few exceptions, stay there. Yes, thank you. It turns out a couple of big themes that have gotten solid responses are elections and COVID recovery.
Elections would include candidates, campaigns, redistricting, laws, coalition building, etc. I’ll not run out of material any time soon.
COVID recovery includes the resumption of whatever becomes normal. How well will communities bounce back? Are downtowns dead? Will housing policies account for more people working (or, more to the point, running a business) from home? What about landlords who’ve lost out on rent … for a year? Are policies restricting occupational licensing so last century? How soon will sporting events, festivals, weekend get-togethers return? Is our children learning? (Sorry. Couldn’t help.)
Again, plenty of angles to take here.
I’ll also try not to take things too seriously when appropriate.
A couple of them.
Pink Floyd’s David Gilmour turned 74. It’s possible his brilliant guitar playing is underappreciated. He’s made tons of guest appearances over the years. Here’s one of my favorites, joining Warren Zevon in the apocalyptic “Run Straight Down” from 30+ years ago.
Then, there’s Phil Alvin of The Blasters (and the Alvin Brothers). I paid tribute to Phil’s bandmate, the late Gene Taylor, not long ago. Phil turned 68. He’s been in questionable health the past few years, but when he can perform, he delivers. As my friend Charles Oliver says, he may be the sweatiest singer in rock history. And that voice …