Congress absolutely needs to come up with an emergency plan to support the US economy heavily affected by the pandemic. The result looks disappointing.
The arrival of vaccines sparks hope in the United States, as the country passes the milestone of 300,000 deaths from COVID-19, but the economy urgently needs a cure.
It is far from certain that Congress will be up to the challenge, as the outgoing president could put a damper on it.
Still billions …
Even though COVID has hit the United States much harder than Canada, the share of the GDP devoted to fiscal stimulus measures remains lower there than at home.
The US economy, however, needs a boost.
The recovery in employment and consumption is slowing, which weighs down the prospects for economic recovery, even if the health situation improves in the coming months.
The amounts required for the revival are gigantic. The political challenges too.
Partisanship and immobility
Even though the election has passed and many lawmakers are in their head in their moving boxes, Congress is working hard to find a deal before Friday, but partisan polarization complicates matters.
The process is not overwhelming. Everyone agrees that the sums to be committed must be around 900 billion dollars, but the two parties are holding a dialogue of the deaf on the priorities which must guide their actions and on the particular favors which will accompany this aid.
Democrats want to improve unemployment insurance programs to target first employees in sectors paralyzed by health measures, while Republicans fear the long-term effects of strengthening unemployment insurance and demand distribution more general fund to stimulate demand.
In addition, Republicans are insisting that companies be protected from remedies employees might bring against those who have forced their employees to work under conditions where they have been exposed to the coronavirus. Meanwhile, the president shares certain objectives of his party and badly conceals his intention to make life difficult for his successor.
Disappointment almost guaranteed
Congress has little choice but to do anything to prevent this deep recession from turning into a long depression.
That’s what he’ll be doing soon, probably in the early hours of the morning, before everyone gets home for the holidays. As we want to prevent the president from screwing up everything with his veto, we will have to be content with the lowest common denominator, which risks not satisfying anyone.
Will the next president have the elbow room to put a more coherent program on track? That remains to be seen. Even if the Democrats do the impossible by snatching Georgia’s two seats and a precarious Senate majority, the Biden administration will have its hands full in repairing the economic damage of the pandemic.