News & Politics

The Real Reasons Democrats Stopped the Coronavirus Stimulus Bill

Senate Minority Leader Sen. Chuck Schumer of N.Y., right, and House Minority Leader Nancy Pelosi of Calif., left, speak together during a news conference on Capitol Hill in Washington, Wednesday, May 16, 2018, after the Senate passes a resolution to reverse the FCC decision to end net neutrality. (AP Photo/Andrew Harnik)

On Sunday, Senate Democrats blocked the massive $2 trillion coronavirus stimulus bill intended to inject new life into an economy struggling to survive under the weight of social distancing necessary to combat the global pandemic. Democrats claimed they opposed the bill because it would give Treasury Secretary Steve Mnuchin the ability to direct billions in a secret “slush fund” — which he would ostensibly use to benefit political allies and President Donald Trump’s companies, but Democrats had other reasons to delay the bill, as well.

Congress has already passed — and the president has already signed — two emergency coronavirus measures earlier this month. The current stimulus bill has been worked out in meetings involving Mnuchin, Senate Majority Leader Mitch McConnell (R-Ky.), Senate Minority Leader Chuck Schumer (D-N.Y.), House Speaker Nancy Pelosi (D-Calif.), and House Minority Leader Kevin McCarthy (R-Calif.).

Yet after these negotiations — which involved a great deal of compromise on both sides — Democrats blocked the bill on Sunday night, The Hill reported. Democrats condemned what they call a secret “slush fund” for corporate America, Politico reported. The stimulus bill includes a $500 billion “Exchange Stabilization Fund” under Mnuchin’s control, designed to help industries struggling from the fallout of the coronavirus. It includes $58 billion for U.S. airlines and air cargo companies.

“We’re gonna give $500 billion in basically a slush fund to help industries controlled by Mnuchin with very little transparency? Is that what we ought to be doing?” Sen. Mazie Hirono (D-Hawaii.) asked, rhetorically.

“We’re not here to create a slush fund for Donald Trump and his family, or a slush fund for the Treasury Department to be able to hand out to their friends,” railed Sen. Elizabeth Warren (D-Mass.), fresh off a failed presidential campaign. “We’re here to help workers, we’re here to help hospitals. And right now, what the Republicans proposed does neither of those.”

Schumer claimed Democrats opposed the bill because “it includes huge bailouts without protections for people and workers and without accountability, and because it shortchanges our hospitals and healthcare workers who need our help.”

But Democrats had already secured key concessions from Republicans in the process of drafting the bill. Democrats secured $250 billion in additional unemployment insurance payments, along with $75 billion in new funding for hospitals. They also demanded hundreds of billions for a “State Stabilization Fund” to help state and local governments, and Republicans supported a limited bailout for these governments.

Democrats claimed the $500 billion to distressed industries would have less oversight than the Troubled Asset Relief Program (TARP), the 2008 financial services industry bailout. Yet Senate Republicans and the White House claimed the coronavirus fund program had actually built on the lessons of TARP.

“The proposal provides desperately needed resources for affected industries and sectors in order to keep people employed and at work,” Eric Ueland, the White House director of legislative affairs and a former top Senate aide who is closely involved in the negotiations, told Politico. “This carefully drawn language contains significant pro-taxpayer and pro-consumer protections in a way unprecedented since the invention of these vehicles really 12 years ago.”

So what is really going on? Why did Democrats vote to block the bill, leading to a 47-47 split in the Senate?

A Democratic aide dropped an essential clue when discussing the bill with The Hill. The aide complained that the stimulus bill’s small business provision would exclude nonprofits that receive Medicaid from being eligible for Small Business Administration assistance. The aide complained that this provision would impact Planned Parenthood, community health centers, rape crisis centers, and disability service providers.

As PJ Media’s Rick Moran pointed out, Planned Parenthood is not a “small business,” and neither are nonprofits.

On Monday, a senior Republican aide told Townhall’s Guy Benson that Schumer and Pelosi are pushing “unprecedented collective bargaining powers for unions,” “increased fuel emissions standards for airlines,” and “expansion of wind and solar tax credits.” These provisions would arguably make the situation even worse for businesses.

Democrats may hope to get more of their liberal wish-list crammed into the coronavirus stimulus bill because Senate Republicans entered self-quarantine after Sen. Rand Paul (R-Ky.) tested positive for the coronavirus. Sens. Mitt Romney (R-Utah) and Mike Lee (R-Utah) missed the vote because they entered self-quarantine after exposure to Rand Paul. Sens. Cory Gardner (R-Colo.) and Rick Scott (R-Fla.) also entered self-quarantine unrelated to Rand Paul’s announcement.

Democrats are engaging in political gamesmanship on this essential stimulus bill in part because some of their Republican colleagues are out-of-pocket due to the very coronavirus their bill is aiming to combat. This is utterly disgusting.

While Democrats loudly complained about a “slush fund,” they did not adopt one of the most obvious responses to it — a response put forth by the Heritage Foundation. Companies impacted by Americans’ efforts to combat the coronavirus should receive some relief, but a bailout is arguably the wrong way to go about providing it. The Heritage Foundation suggested a two-pronged alternative: first, apply the same paid sick and family leave provisions granted to small business employees to workers at large businesses; and second, the government can “pre-purchase expected goods and services to supply businesses with liquidity.”

Democrats are right to fear an unchecked government expansion to meet the coronavirus crisis — in fact, their fears that Mnuchin might abuse government funds in this crisis should serve as an important warning about the big-government solutions Democrats favor. “Progressives” support government solutions in part because they assume they will always be in control of the government — always a dangerous assumption.

Yet the coronavirus crisis is no time for political gamesmanship, and it appears Democrats are working overtime not to let this crisis “go to waste.”

Tyler O’Neil is the author of Making Hate Pay: The Corruption of the Southern Poverty Law Center. Follow him on Twitter at @Tyler2ONeil.