In the past several days, congressional Democrats and Republicans compiled a 5,593-page spending bill that is “so unwieldy that it kept crashing Congress’s computers.” Unfortunately, it is likely that the bill—which provides COVID-19 relief and funds the federal government through 2021—will pass without any member of Congress having read it in full.
Among other things, the $900 billion of coronavirus-related funds extends $325 billion for small business loans, boosts state unemployment benefits by $300 a week, allows for 50 weeks of unemployment benefits instead of 26, and offers a $600 check to Americans who made less than $75,000 in the previous year (and another $600 for each of their children).
Fortunately, there are people in the Senate who still care about our nation’s national debt of $27.5 trillion. Senator Ron Johnson (R., Wisconsin) railed against a proposal for a $1,200-per-person check, managing to reduce the handout to $600 a person and saving taxpayers at least $88.6 billion. People in dire need will still be accounted for thanks to the $300-a-week enhanced unemployment benefits, which made it into the final bill.
The taxpayer is also lucky to have Senator Pat Toomey (R., Pennsylvania). He managed to bar the Federal Reserve from restarting lending facilities it activated at the beginning of the pandemic, when there was a crippling liquidity crisis that no longer exists. Congress previously appropriated $454 billion for losses emanating from these facilities, but this princely sum was barely touched and Treasury Secretary Steve Mnuchin declared in November that he would allow the facilities to expire on December 31, 2020.
Toomey managed a good compromise, per the Wall Street Journal: “Under the deal, remaining funding previously provided to the Treasury Department to backstop losses in Fed lending programs would be revoked, and the Fed wouldn’t be able to replicate identical emergency lending programs next year without congressional approval, according to aides familiar with the legislation.”
The Toomey-driven text is optimal because it limits the market distortions the Federal Reserve has managed thus far; partially restrains the growth of the Federal Reserve balance sheet, which already clocks in at $7.36 trillion; and prevents a bailout of bankrupt states and municipalities absent political accountability. Sadly, the cancelation of the lending facilities will have little effect on the Federal Reserve’s other efforts, which include the monthly purchase of $80 billion of Treasury bonds and $40 billion of mortgage-based securities.
Regarding President Donald Trump's stance on the omnibus package currently under consideration, POLITICO reports, “The White House has signaled that Trump, who has been mostly absent from the negotiations, will indeed sign the measure.” Though Johnson and Toomey made the bill considerably more palatable, Trump would be within his rights to reject it and force Congress to override his veto.
Among other things, the $900 billion of coronavirus-related funds extends $325 billion for small business loans, boosts state unemployment benefits by $300 a week, allows for 50 weeks of unemployment benefits instead of 26, and offers a $600 check to Americans who made less than $75,000 in the previous year (and another $600 for each of their children).
Separately, the $1.4 trillion in government funding provides everything from foreign aid money to plans for presidential libraries. The Washington Post, hardly a bugle for austerity, disapprovingly reports, “The proposal includes numerous provisions -- from Smithsonian American Women’s History Act, legislation to rein in surprise medical billing, and policies supporting Tibet -- that appear to have nothing to do with the coronavirus pandemic or national economic emergency.”
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| Pat Toomey and Ron Johnson (Roll Call) |
Fortunately, there are people in the Senate who still care about our nation’s national debt of $27.5 trillion. Senator Ron Johnson (R., Wisconsin) railed against a proposal for a $1,200-per-person check, managing to reduce the handout to $600 a person and saving taxpayers at least $88.6 billion. People in dire need will still be accounted for thanks to the $300-a-week enhanced unemployment benefits, which made it into the final bill.
The taxpayer is also lucky to have Senator Pat Toomey (R., Pennsylvania). He managed to bar the Federal Reserve from restarting lending facilities it activated at the beginning of the pandemic, when there was a crippling liquidity crisis that no longer exists. Congress previously appropriated $454 billion for losses emanating from these facilities, but this princely sum was barely touched and Treasury Secretary Steve Mnuchin declared in November that he would allow the facilities to expire on December 31, 2020.
Toomey managed a good compromise, per the Wall Street Journal: “Under the deal, remaining funding previously provided to the Treasury Department to backstop losses in Fed lending programs would be revoked, and the Fed wouldn’t be able to replicate identical emergency lending programs next year without congressional approval, according to aides familiar with the legislation.”
The Toomey-driven text is optimal because it limits the market distortions the Federal Reserve has managed thus far; partially restrains the growth of the Federal Reserve balance sheet, which already clocks in at $7.36 trillion; and prevents a bailout of bankrupt states and municipalities absent political accountability. Sadly, the cancelation of the lending facilities will have little effect on the Federal Reserve’s other efforts, which include the monthly purchase of $80 billion of Treasury bonds and $40 billion of mortgage-based securities.
Regarding President Donald Trump's stance on the omnibus package currently under consideration, POLITICO reports, “The White House has signaled that Trump, who has been mostly absent from the negotiations, will indeed sign the measure.” Though Johnson and Toomey made the bill considerably more palatable, Trump would be within his rights to reject it and force Congress to override his veto.
Or, better yet, Congress should split the coronavirus-relief funds from the general budget, give each spending package the thoughtful consideration it deserves, and limit the pillage of the American taxpayer.
All unsigned FDL Review content is the product of Declan Hurley.
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