The jobs report for April hit the country like a left hook in the face. About 20.5 million people were thrown out of work, the most rapid decline in the job market since the Bureau of Labor Statistics began keeping records. The unemployment rate rose to 14.7%. Treasury Secretary Steven Mnuchin admitted the actual figure was probably much higher, possibly closer to the Great Depression-like levels of 20% to 25%. The COVID-19 pandemic has wiped out more than a decade of job growth in a little less than six weeks. Not even the most dire economic forecasters could have anticipated such a precipitous fall from grace.
The economic shock and awe has been so sudden that Republican and Democratic lawmakers on Capitol Hill were able to put aside the usual partisan gamesmanship about spending to pass four separate coronavirus-related bills. One, a $2 trillion package that President Trump signed into law last month, was the largest economic rescue bill in U.S. history. Even the most fiscally attuned conservative lawmaker recognized that increasing budget deficits to put money into people’s pockets was a necessity at this point in time, not a luxury.
In the weeks since the $2 trillion measure was passed, the economy has continued to bleed jobs. The country is in an extremely dire state, with the virus shutting down sectors of the workforce normally insulated from a recession (like white-collar jobs). The urgency on Capitol Hill to save the economy is as high today as it was weeks ago. The only difference: The shiny bipartisan armor is beginning to wear off.
House Democrats led by Speaker Nancy Pelosi are forging ahead with their own “transformational” coronavirus relief bill. The proposal is likely to plow at least an additional $3 trillion into the economy — a good portion of which, $800 billion, will go to state and local governments to help them offset cuts in revenue. It’s a venture Senate Republicans are less than enthused about. Senate Majority Whip John Thune called Pelosi’s bill “more like a messaging document than anything else.”
It’s hard to disagree with Thune’s point because Pelosi’s bill is going nowhere. Yet it’s also hard to dispute that another big cash infusion is going to be necessary sooner or later. The record-high $3.8 trillion deficit could very well be higher in the weeks to come.
Senate Republicans are divided among themselves. Some, such as Sens. John Kennedy and Bill Cassidy of Louisiana, want more discretion for state governments in how federal assistance can be used. Others, such as Sen. Rick Scott, are strongly opposed to giving states additional leeway, going so far as to block Kennedy’s legislation to that effect. Senate Majority Leader Mitch McConnell wants to take a timeout before more legislation is enacted. Trump, meanwhile, changes his mind depending on the circumstances of the moment.
Add to the picture a House Democratic caucus divided between its centrist and liberal members, and it’s becoming quite difficult to envision another rescue bill being sent to Trump’s desk for a signature in the foreseeable future.
The only thing that may force some consensus on Capitol Hill is another jobs report next month that shows millions of additional workers unemployed and a series of economic predictions from the country’s big banks that look even more apocalyptic than they already are. It’s an outcome everyone is praying to avoid.
Daniel DePetris (@DanDePetris) is a contributor to the Washington Examiner’s Beltway Confidential blog. His opinions are his own.
