President Donald Trump and his Republican majority in the Senate are actually working against their own political interests. They both yearn for a rapid economic recovery, but in recent weeks they have managed to sabotage any chance of that actually happening. The so-called “skinny” coronavirus stimulus bill Senate Republicans are now considering – in contrast to the “Heroes Act,” passed in May by House Democrats – does not advance their and the president’s main political objective: to ensure a rapid economic recovery over the next eight weeks. Indeed, it just reflects the president’s monumental stupidity and mendacity – not to mention that of many Senate Republicans.
Q2 2020 hedge fund letters, conferences and more
The Skinny Coronavirus Stimulus Bill
At best, Trump and his Senatorial minions will get most of what they’re asking for. At worst, they won’t get anything. So either way, they lose!
The Hero’s Act was the Democrat’s own $3.4-trillion wish list. It reinstates the $600-a-week supplementary unemployment insurance benefits to tens of millions of Americans, and calls for sending another round of $1,200 economic stimulus checks to most adults. The Republican skinny bill provides just a $300 supplementary unemployment benefit, and no $1.200 stimulus checks will be sent out.
But the measure in the Heroes Act that especially infuriates Mr. Trump is the $1trillion of aid to state and local governments, who have been laying off hundreds of thousands of employees. The Skinny bill does not provide any money at all.
During the spring months, as the pandemic spread rapidly across our nation, virtually every governor pleaded with Trump for help. The president grudgingly provided just a fraction of what they needed, all the while threatening and insulting especially the “Democrat governors.”
A man who proudly holds multiple grudges, the president is still bound and determined to send as little aid as possible to the “Democrat” states, and consequently, to the rest of them as well. Apparently, his well-honed sense of personal grievance “trumps” his instinct for political survival.
The President's Political Priorities
The skinny bill also reflects the president’s political priorities with respect to aid to education. It rewards public schools that hold in-person classes, while penalizing those that have remote learning.
In negotiations last month with President Trump’s emissaries, Treasury Secretary Stephen Mnuchin and Chief of Staff Mark Meadows, House Speaker Nancy Pelosi and Senate Democratic Minority Leader Chuck Schumer did agree to lower the cost of their own proposal from $3.4 trillion to $2.2 trillion. Mnuchin countered with a $1.5 trillion offer.
But now, the new initiative proposed by Republican Senate Majority Leader Mitch McConnell, calls for spending less than half that sum. And even that is too costly for perhaps twenty Republican Senators, thereby dooming the skinny bill if it is voted upon later this week.
Now, let’s get down to Trump’s bottom line, which is obviously to do nearly anything to get reelected. Yet, he is so blinded by his grievances against so many political enemies that he cannot grasp that the more money the federal government pumps into the economy, the better the chances of a sustained economic recovery.
How stupid is it to try to hold down that spending if that provides his best chance of staying in office? Well, we’re about to find out.
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