Poverty Is Skyrocketing and Congress Is Doing Nothing
It is a capital mistake to think the bill will not someday come due for the massive aggregate of human suffering we've seen—or often, chosen not to see—over the last months across the United States of America. The expiration on August 1 of boosted unemployment benefits that came with the CARES Act, along with a failure from the national government to send additional rounds of stimulus checks, has erased so much of the good from those initial interventions and plunged people living within one sphere of existence in this country into real peril. The other sphere, the one where people work white-collar jobs from home and own stocks that keep going up because the market seemingly has no relationship to economic reality on the ground, is doing A-OK. Recession's over. Not so for the people whose lives are far less visible to the movers and shakers in New York and Washington.
This is the K-shaped recovery. It's not a V-shape, like the president and his extremely and notoriously wrong chief economic adviser, Larry Kudlow, like to talk about. Another 898,000 people filed for unemployment last week, the highest since late August. While the number of people collecting benefits from regular state programs declined that week, the Wall Street Journal reports that 2.8 million people collected from a federal extended-benefits program that provides an extra 13 weeks for people who have exhausted their state benefits. Put simply, a lot of people have been unemployed for a long time. "Labor market indicators," the Journal says, citing an economist at jobs site Indeed, "suggest the recovery is slowing down." And the extended-benefits program is set to expire at year's end.
But the really untold story, as is so often the case in America, is the story of poverty. This is a country where politicians of both parties, with a few exceptions, talk about "the middle class"—not the poor. The New York Times reported Thursday on two studies, one from Columbia University and the other from the University of Chicago and Notre Dame, which both found millions of Americans have been plunged into poverty over the last few months. The Columbia study found the number of poor people in America has grown by 8 million since May. The Chicago-Notre Dame work found 6 million have entered poverty in the last three months. These numbers map onto existing inequities in our society, falling more heavily on Black Americans.
One of the study authors put it simply: "These numbers are very concerning," Bruce D. Meyer of U. Chicago told the Times. "They tell us people are having a lot more trouble paying their bills, paying their rent, putting food on the table."
The collapse in so many people's fortunes is tied directly to the expiration in federal benefits, which the Columbia study found kept 18 million people out of poverty in May. About two thirds of Americans who received the boosted $600 weekly benefits were actually getting more money in their pockets than they were at their old jobs, according to the Times. (Conservatives decried this as proof people would never go back to work if the boost continued. The real story is that, by amassing enough power and influence—and crushing the power of workers and unions—many firms have gotten away with not paying their workers a living wage.) The measures from Congress to rope gig and self-employed workers into the benefits, which greatly reduced the potential poverty rate, will also be gone at the end of this year. The $1,200 checks were also key, but they're long gone.
Meanwhile, there seems to be little hope for life preservers from the federal government. It's easy to look to Nancy Pelosi, the Democratic Speaker of the House, on this, as she is the only person in a position of political leadership with any discernible capacity for empathy. Some doubt how committed she really is to striking a deal before Election Day, considering the likelihood that the president's party will be punished for that failure. She also did not cover herself in glory while discussing the issue with CNN's Wolf Blitzer this week, though she was right to point out that her Republican counterpart in the Senate, Mitch McConnell, never faces the kind of scrutiny she did there.
While a lot of focus has centered on Pelosi's reluctance to take the $1.8 trillion deal the White House has put on the table—two members of her caucus have urged her to do so publicly—even Treasury Secretary Steven Mnuchin has publicly admitted there are "policy" hurdles involved. One appears to be the Democrats' (very reasonable) demand that any deal should feature a mechanism—and funding—to set up an actual national testing program, rather than the ongoing farce constructed by the Trump administration. Mnuchin has reportedly signaled some openness on that, which is an incredible thing to write about the administration that is theoretically in charge of the national response to this virus. It's also unclear whether there are still some poison pills involved, such as the old and relentless Republican push to grant employers liability protections if they bring their employees back and they get sick. This should be a deal-breaker for Democrats, as it places workers at the mercy of firms who would be granted genuine moral hazard. Employers must assume some risk tied to unsafe conditions in order to incentivize good behavior.
(The president, for his part, is simply insane: when he's not yelling about various grievances pulled from the Fox News Universe, he is swinging wildly between calling off negotiations and trumpeting his willingness to "go big." He does not seem to have any actual role in the legislative process, and it's not clear anyone is listening to him.)
In a way, this is all moot for a reason related to Pelosi's point in that cringe interview with Wolf Blitzer. Mitch McConnell is enough of an unreconstructed ghoul that, at a Kentucky Senate debate this week, he could be found laughing at the suggestion he'd chosen to ram through a Supreme Court nominee in record time having left the multiple Democratic COVID relief bills in the purgatory of his desk for months. (Democrats first passed an extension of benefits in May.) While there's suspicion Pelosi isn't overeager to do a deal before the election because of the politics, there is even more reason to believe McConnell wants to schedule a re-run of his ratfucking of the Obama presidency, presenting Joe Biden—should the election be free and fair, and should he triumph—the worst economy possible. The work of digging out of that hole would consume the early part of his presidency and perhaps set the stage for Republicans to seize electoral—if not moral—redemption beginning with the 2022 midterms.
Meanwhile, McConnell might not be able to wrangle his caucus even if he wanted to, as Senate Republicans rediscover their grave concerns about The National Debt just in time for the possible rise of Democrats to power. The $1.8 trillion deal on offer from the White House, even if it's a relatively clean one with a minimal number of slush funds for Mnuchin or anyone else to control, is really a theoretical construct when McConnell is only just now making noise about maybe putting a $500 billion bill on the floor—one he simply knows Democrats will not accept. So who is it that's not interested in a deal? We certainly know who's going to suffer. Even if Senate Republicans take big losses next month, it won't really be them. You have to fear for these Americans, and the country more generally, if nothing is done until February. It simply cannot be allowed to happen.
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