Senate Majority Leader Mitch McConnell, House Speaker Nancy Pelosi, and Senate Minority Leader Chuck Schumer are at an impasse over a new coronavirus relief bill. Unfortunately, their short-term political interests are not necessarily aligned with the public interest. Ideological differences can reinforce the political will of constituents. But at moments like this, they can also get in the way of an agreement that is in everyone’s interest.
So much is at stake that it’s worth agreeing to a few common-sense policies that are neither conservative nor liberal, neither Republican nor Democratic.
First, let’s start with what to scrap: Schumer’s tax cut for the rich. We understand why Schumer would want to undo the least-favorite part of the Tax Cuts and Jobs Act. He wants a massive tax cut for high earners with expensive property in high-tax New York. This is his political base, and the local politicians who impose high taxes are screaming out for it.
We’re all for tax cuts, especially as part of tax reform, but this is an effort to undo a salutary tax reform measure. It’s not reform to expand deductions that are claimed almost solely by the wealthiest Americans. Certainly, a tax cut where 50% of the benefit goes to the wealthiest 1% is not a well-targeted intervention.
The Senate bill has a better-targeted tax relief: Tax credits for businesses that hire and retain employees. We’re generally not crazy about tax credits, but in these times, when businesses are fully or partly closed by government action and when consumers are scarce and impoverished, these tax credits are called for. Specifically, the tax credits offset payroll taxes. That means that while they are subsidies, they are also proposals to remove federal barriers to employment.
Employers need not only money, but also certainty. Small businesses need the clarification that their forgiven PPP loans will not be taxed. They need certainty that their loans will be forgiven. They need protection from liability if they take reasonable precautions against infection, yet their employees or consumers become sick with the virus.
Schools need money, too, so that they can reopen safely — and so that the parents in their communities can resume something resembling normal life. Not all schools will be able to reopen their doors for in-person instruction. Where the worst outbreaks are occurring, prudent local officials may not want to reopen the doors. Some schools are far too overcrowded to allow for safe schooling.
But many schools could reopen if they had the money to update air conditioning and filtration systems, install plexiglass, buy protective equipment for teachers, hire extra staff, buy a disinfectant fogger, and so on. In-person schooling is crucial, as we’ve argued, for both children and for parents. Getting kids back to school gets parents back to work.
All in all, these are common-sense, nonideological principles that both sides can and should accept and act upon. There has already been so much politicization of the coronavirus. The issue is wearying for anyone who has been following it. It is time for the politicians to come together and work out a practical solution that sets ideology aside and provides the help Americans need right now. The whole world is watching.
