Republicans, who have long opposed massive stimulus measures, are now spearheading the most expensive one in history to try to rescue the economy from the effects of the coronavirus.
By the time Treasury Secretary Steven Mnuchin outlined a nearly $1 trillion federal spending plan to Senate Republicans last week, the stock market had approached levels not seen since before President Trump took office.
Mnuchin warned of a 20% unemployment rate as businesses large and small shuttered thanks to federal guidelines calling on people to stay home. Grim-faced Republicans left the meeting with little praise for the proposal, which included sending $1,000 checks to adults to help weather the economic storm.
“It’s a very fluid situation, and Republicans are having intense discussions,” Sen. Pat Toomey, a Pennsylvania Republican, told the Washington Examiner. He called the proposal to send people cash “one of the ideas under discussion.”
By the end of the week, Republicans had increased the direct cash payments to $1,200 plus $500 for each child for individuals earning under $75,000 and couples making less than $150,000.
The plan also includes forgivable loans to small businesses and financial aid to the hard-hit airline industry.
Majority Leader Mitch McConnell, who — along with nearly every single Republican — opposed President Barack Obama’s $787 billion stimulus in 2009, led the effort to get the coronavirus stimulus passed swiftly and said he backed the direct cash payments.
“Money for people,” McConnell, a Kentucky Republican, said. “From the middle class on down. Period. For laid-off Americans, this infusion would complement unemployment insurance and could be put toward immediate needs during this crisis.”
McConnell plowed ahead with the proposal despite misgivings from some in his GOP conference who opposed the cash payments.
Sen. Lindsey Graham, a South Carolina Republican, argued it would make more sense to administer the aid through the existing unemployment insurance system. Other Republicans sided with him, but they were overruled.
Some Republicans also opposed the bailout for airlines, which spent billions on stock buybacks that left them financially vulnerable when people stopped flying last week.
McConnell defended the aid and said it was not a bailout but rather a move by the federal government to protect a critical mode of transportation from going under.
“Our nation needs airlines,” McConnell said. “Yet they have ongoing maintenance costs that do not disappear just because the government has chased away customers. We cannot expect this key industry to mothball itself overnight, then dust off in weeks or months and pop right back online as the nation will need and expect.”
Sen. Marco Rubio, a Florida Republican who authored the small-business portion of the stimulus package with Sen. Susan Collins of Maine, said the federal government needed to pump billions into loans for businesses to stay afloat — even if it violated a fundamental GOP principle of not growing the debt.
“I believe very much that we should not be growing the debt,” Rubio said. “But these are not normal times. The circumstances in which we live in now have no precedent. We are not talking about businesses that made bad decisions and are asking to be bailed out. We are talking about a virus. We are talking about an effort to control this virus that has us telling businesses to be closed and people not to frequent them. That is extraordinary.”
