FRIDAy, MARCH 27 , 2020. THE WASHINGTON POST EZ RE A23
S
tates are facing huge shortages —
and not just of ventilators, masks
and health-care personnel.
They’re about to confront enor-
mous budget shortages, too. This is the
sleeper issue of the current economic
crisis, and aiding states now could well be
the difference between a brief recession
and a prolonged depression.
P articularly in ailing regions of the
United States that still haven’t recovered
from the last recession.
The bill the Senate passed Wednesday
would give state and local governments
$150 billion to help plug budget holes. It
also includes $31 billion for local schools
and colleges. That money is definitely
welcome.
But it will be nowhere near sufficient to
prevent cascading state and local govern-
ment layoffs and cuts to critical public
services that otherwise lie ahead. For
context: States suffered a cumulative
$600 billion revenue shortfall in the first
five years after the Great Recession hit.
And there are ample reasons to be-
lieve the fiscal crunch could be worse
this time around. Many states entered
this dual public health and economic
emergency in poor budgetary shape,
with too little in their “rainy day” funds
to handle this Noah-style deluge. As of
late last year, only about half the states
had t he funds they need to weather even
a moderate recession, according to
Moody’s Analytics.
Seemingly every state will take a huge
hit, for different reasons. Those whose
economies are especially dependent on
tourism (Florida, Nevada), energy (Texas,
Oklahoma) and other hard-hit sectors are
in trouble. As are those dependent on
capital gains revenue (New York, Califor-
nia), given stock market declines. High-
fixed-cost public transit systems every-
where will suffer as they lose rider reve-
nue. And so on.
Among the biggest problems are the
expected declines in sales tax collections,
which make up about a third of state
revenue. With millions of retail stores,
restaurants and other businesses shut-
tered, sales on which those taxes are
based have stopped. Even the early-
p andemic panic-buying is unlikely to
help, because groceries, medications and
other necessities are often exempt from
sales taxes.
Ta king a cue from the feds, many states
have delayed their deadlines for filing
2019 income taxes, too, meaning they will
not be able to count on an April bump.
Ta x money that would normally be
withheld from people’s paychecks this
year will also be depressed while people
are out of work, suggesting revenue
shortfalls will continue for a while.
Depending on how long layoffs last,
they could eventually start to depress
property values, too — and thus the
property taxes that disproportionately
pay for schools and local services. Which
suggests there could be reverberating
fiscal effects for years after this pandemic
ends.
That’s j ust one side of the ledger. Mean-
while, states’ expenses are spiking, too.
This always happens during reces-
sions, as people seek a safety net when
their income falls. But the particular
cause of this recession — a public health
emergency — means there will be even
more demand for public services than
usual.
Already, unemployment insurance
claims are off the charts, with initial
claims filed last week reaching an all-
time high of 3.3 million. (The past record
was 695,000, in 1982.) That figure proba-
bly understates the severity of the need,
because government unemployment
websites have crashed.
The aid package passed the Senate
Wednesday would top off what states will
offer workers seeking unemployment
benefits, and extend benefits to new cate-
gories of workers, but states will still be
on the hook for huge obligations.
Medicaid enrollment also usually ris-
es during a downturn, as jobless people
lose their private insurance a nd reduced
earnings make people newly eligible for
benefits. But given that this downturn
was caused by a pandemic, we should
expect that more people than usual will
seek public insurance, and that the
spending per enrollee will be higher
than normal.
In i ts “phase two” b ill, Congress tempo-
rarily increased the share of Medicaid
costs borne by the federal government —
but not by nearly as much as is needed,
and not even by as much as it did in
response to the Great Recession. Which is
a shame, given that Medicaid is such a
useful vehicle for distributing federal
funds to states even when there isn’t a
public health emergency.
“The fastest, most efficient way to get
money out to the states is through
Medicaid, because t here’s a whole m ech-
anism already that allows for that all in
place,” s aid Scott Pattison, former execu-
tive director of both the National Gover-
nors Association and the National Asso-
ciation of State Budget Officers.
Unlike the federal government, most
state and local governments are legally
required to balance their budgets. With-
out more federal help, states and cities
shouldn’t expect a swift snapback from
this crisis. Instead, they should brace for a
downward spiral — o f service cuts, deteri-
orating conditions for households and
businesses, and depressed economic con-
ditions for years to come.
[email protected]CATHERINE RAMPELLStates face
a downward
spiral
C
ongratulations, America, you
hit a record: 3.3 million people
filed for unemployment in a
single week.
That might sound like sarcasm. It’s
not. We needed those 3.3 million folks
to stay home. In fact, we need tens of
millions more to do the same thing. For
the first time in history, o ur No. 1 policy
goal is to prevent people from working.
So in some sense, record unemploy-
ment numbers are a terrific victory.
But they are also a monumental
policy failure, because while we need
people to stop working, we don’t a ctual-
ly need, or want, them to become unem-
ployed. If members of Congress had
grasped that they were facing an entire-
ly novel sort of crisis, we’d h ave gotten a
better relief bill, and much sooner than
we actually did. One that could have
kept many of those people at work.
Congress could have done what gov-
ernments in other countries have done,
notably Denmark and Britain: offered
to pay employers to furlough workers
rather than laying them off. Britain is
promising to replace 80 percent of the
salary of those workers, through grants
employers will get from the treasury.
Denmark is offering to pay 90 percent
of the wages of hourly workers who
have been sent home and 75 percent of
the pay of salaried workers. There are
also other forms of assistance to help
employers cover fixed expenses as their
revenue drops.
By keeping workers attached to their
employers, and keeping employers sol-
vent, these countries will make it easier
for the economy to restart when the
epidemic is under control. Our Con-gress, unfortunately, seems to be strug-
gling with the idea that this is not your
standard recession.
To their credit, lawmakers did even-
tually settle on a relief package of
unprecedented size.
To t heir discredit, they took too long,
produced only middling results and
made no provision for what they’ll do if
additional relief proves necessary.
Worse, the process suggested that
they don’t really understand that new
problems require new ideas.
Democrats wasted time trying to
restructure the relief bill as they always
do, to punish any company that re-
quired assistance — as if those compa-
nies had grievously wronged us by
failing to be in the “delivery-of-basic-
goods-and-services” business at the
moment when a once-in-a-century pan-
demic struck.
Once the Democrats were done drag-
ging their feet, Republicans had to
pause for a good scuff of the carpet,
fretting that a four-month, $600-per-
week top-up of unemployment benefits
was just too darned generous to the
unemployed slobs we’re forcing to stay
home.
“We’ve incentivized people not to go
back to work,” s aid Sen. Lindsey O. G ra-
ham (R-S.C.). This was, of course, the
point.
Worrying about moral hazard during
a pandemic misses that point by a
country mile. And structuring so much
of the relief through the unemployment
system means we’ll struggle to put the
economy back together when the time
comes. Most worrying of all, Congress
doesn’t even seem to be contemplatingthe need to change course.
Now that work on the relief bill is all
over but the shouting, members of
Congress are preparing to leave town
and shelter in place along with their
constituents. What happens if it isn’t
enough? Do they fly back to Washing-
ton, possibly picking up something
along the way, and then infecting their
colleagues with it?
Congress could easily switch to re-
mote voting for the duration of this
crisis; if legislators are worried about
hackers interfering, it wouldn’t be very
difficult to set up an old-fashioned
system where recording clerks collect
the votes by calling each legislator at
home. Sens. Rob Portman (R-Ohio) and
Richard J. Durbin (D-Ill.) have been
pushing for some sort of remote voting
capability, and Congress should have
enacted some sort of emergency mea-
sure before adjourning. Unfortunately,
both the speaker of the House and the
Senate majority leader seem to have
rejected the idea out of hand.
If this epidemic proves as bad as
many fear, the relief package just
passed will prove inadequate, and our
legislature will need to do more. But the
same mind-set that kept Congress from
matching the scope of its action to the
unprecedented breadth of the crisis
will now make it harder for its members
to come back to Washington and do
what’s needed.
The 3.3 million people who filed for
unemployment last week already un-
derstand that we’re facing something
entirely unprecedented. Congress obvi-
ously doesn’t, yet.
Twitter: @asymmetricinfoMEGAN MCARDLEPeople need to stop working,
but don’t need to be unemployed
MATTHEW STOCKMAN/AGENCE FRANCE-PRESSE/GETTY IMAGES
A Waffle House restaurant sits closed on Thursday in Thornton, Colo.for this,” said Thomas Wright, a senior
fellow at t he Brookings Institution. “ If the
leadership on this isn’t coming from the
administration, it has to come from Con-
gress, and it’s deeply concerning that it’s
not.”
Two senior administration officials de-
fended the U.S. government’s i nternation-
al response in a Thursday afternoon con-
ference call. They noted (correctly) the
United States is by far the largest humani-
tarian and health security donor, and they
announced new commitments of
$174 million in international assistance
for coronavirus response, bringing the
Trump administration’s total to $274 mil-
lion before the stimulus bill comes into
play.
“We will drive the global response to
the novel coronavirus disease, even as we
battle it on the home front,” said Bonnie
Glick, deputy administrator at USAID.
But on Sunday, when President Trump
was asked directly about international
funding in the stimulus, he said, “No, no,
not in the stimulus bill.” H e added that the
United States “probably will end up eco-
nomically doing something for other
countries” later on.
The president was responding to the
statement of two retired military leaders,
Adm. James Stavridis and Gen. Anthony
Zinni, who co-chair the National Security
Advisory Council of the U.S. Global Lead-
ership Coalition, an advocacy organiza-
tion for diplomacy and development.
They called on legislators to beef up the
stimulus bill with added funds to help
people in other countries that aren’t pre-
pared.
“No matter how successful we are in
fighting the threat of the COVID-19 pan-
demic at home, we will never stop it
unless we are also fighting it around the
world,” their statement said. “If there is
anything that we have seen in the lastC
ongress is set to pass a $2.2 tril-
lion stimulus package to combat
the coronavirus pandemic, but
only a tiny portion is devoted to
dealing with the crisis’s impact outside
America’s borders. That’s penny-wise,
pound- foolish. A global pandemic re-
quires a global response led by the
United States.
On Wednesday, the Senate passed the
Coronavirus Aid, Relief, and Economic
Security (CARES) Act, also known as
“phase three.” The details suggest the
United States only “cares” about itself,
not the plight of other countries with
vulnerable populations. The entire bill
contains only $1.15 billion in supplemen-
tal funding for the State Department, the
U.S. Agency for International Develop-
ment and other international programs.
It’s about the same amount the bill gives
just to Amtrak.
That’s 0 .05 percent of the total $2.2 tril-
lion package. Traditionally, foreign aid
makes up roughly 1 percent of the federal
budget, with strong bipartisan support.
Within the stimulus bill’s international
assistance funding, about half of those
funds are dedicated to protecting or evac-
uating U.S. diplomats and aid workers
dealing with the coronavirus — crucial
missions, to be sure. The other half ad-
dresses coronavirus impacts on refugees,
migration and humanitarian crises
worldwide.
This short shrift for diplomacy and
development reinforces the narrative that
the United States is not interested in
leading a coordinated and cooperative
effort to fight the virus and rebuild the
world economy afterward. This approach
has many shortcomings. Perhaps the
most important is that it leaves a vacuum
China is eager to fill.
“It’s compounding the errors of the last
few weeks not to provide more resourcesseveral weeks, it is that a deadly virus
threat anywhere is a deadly threat every-
where.”
The Obama administration contem-
plated a much more international ap-
proach to the situation we currently face.
A pandemic early-response playbook
drafted by President Barack Obama’s Na-
tional Security Council, but discarded by
the Trump administration, was published
Wednesday by Politico. It included an
“international assistance and response
checklist,” and it is based on the assump-
tion that the U.S. government has both the
mandate and capability to support out-
break and epidemic responses in other
countries.
Foreign obligations must not come at
the expense of the health and economic
needs of Americans. But by leaving vul-
nerable populations to fend for them-
selves, we are sowing the seeds for insta-
bility, migration and extremism to ex-
pand. Also, we are failing to prevent the
next pandemic after this one. And we are
not saving enormous amounts of money,
relatively speaking, by failing to properly
address the underlying issues.
“The cost of baseline preparedness is
estimated at only about a dollar per
person per year—and building and sus-
taining preparedness need not be an
open-ended donor commitment,” s tated a
November 2019 report on global health
security compiled by the Center for Stra-
tegic and International Studies.
It’s ridiculous that China can portray
itself as the world’s s avior on the coronavi-
rus crisis after its initial mistakes contrib-
uted to the current dire situation. But
that’s the risk we are running. If the
United States doesn’t play a leadership
role in the worldwide response now, there
will be damaging consequences for our
security and economy down the line.
[email protected]JOSH ROGINA stimulus that ignores the rest of the world
F
or the symbolic reopening of
the U.S. economy, President
Trump has picked the first Sun-
day after the Paschal Full Moon,
which lands on or just after the spring
equinox. This is the way Easter has
been determined in most of the Chris-
tian world since the Council of Nicaea
in 325 A.D., and Trump’s target date for
the resumption of normal life in Ameri-
ca seems just as arbitrary.
“Easter’s a very special day for me,”
explained Trump. “Wouldn’t it be great
to have all of the churches full?” And
later: “You’ll have packed churches all
over our country. I think it would be a
beautiful time.”
To be sacrilegious requires some
recognition of what is actually sacred
— a type of knowledge Trump has
never displayed. To him, choosing
Easter must have been like selecting
Independence Day or Arbor Day or
Groundhog Day — a useful date on
which to hang a ploy.
But Easter is the holiest date on the
Christian calendar, when the resurrec-
tion of Christ is celebrated. And it
would be blasphemous to use a day
dedicated to the renewal of life in a
manner that leads to further death.
The packing of churches in a little over
two weeks would almost certainly be
an epidemiological disaster in much of
the country. It is impossible to imagine
most priests and pastors treating the
lives of their congregants with such
disdain.Ye t some Americans, under the pres-
ident’s guidance, may now regard the
defiant resumption of their lives as a
kind of partisan duty. It is, in Trump’s
words, the “LameStream Media” that
wants to “keep our Country closed as
long as possible in the hope that it will
be detrimental to my election success.”
The president is sending the signal to
his core supporters that media cover-
age of the virus — and thus the advice
of experts at the Centers for Disease
Control and Prevention and the Na-
tional Institutes of Health on which
that coverage is largely based — is
purposely and maliciously over-
wrought. The “real people,” in contrast,
“want to get back to work ASAP.”
It is one of the strangest, most
dangerous moments in presidential
history. At a time when American cities
remain on the rising side of the
coronavirus infection curve, Trump is
preaching recklessness and selling the
idea that coronavirus pessimists are
engaged in a plot against him. This is
not normal partisanship. It is not
normal, period. Trump is not only
proposing a celebration of the Resur-
rection that would fill graves. He is
implying that one way to “own the libs”
is by further exposing the elderly to a
cruel illness. He is urging his “pro-life”
followers to increase their tolerance for
death.
This represents a different kind of
sickness — a moral sickness that took
hold in Trump long ago. His immedi-
ate, selfish interest is the cause — the
only cause — t o which he has dedicated
his life.
All this raises the question: On what
basis is Trump making decisions in the
current crisis? His Easter festival of
infection was certainly not proposed
on any medical or scientific basis.
American experts at the highest
level simply do not know whether the
nightmare we are witnessing in New
York City is an outlier or a vision of the
future for other U.S. cities. Because of
its population density, New York was
always the kind of place where a
pandemic would hit hard. But the
policy of sheltering in place is provid-
ing a glimmer of hope. The doubling
time for hospitalizations has gone from
two days to 4.7 days. This does not
mean that New York is over the top of
the curve, but it may mean that current
measures are beginning to work.
Will other large urban areas follow
the same course as New York? Hopeful-
ly, they have started their mitigation
efforts — closing schools, sending
workers home, enforcing social dis-
tancing — soon enough to avoid the
steepest part of the curve. But that
remains to be seen.
In the absence of compelling evi-
dence, Trump’s premature declaration
of victory — and the postulation of a
plot against his presidency — must
have other motivations. I think we can
safely discount Trump’s aesthetic ex-
planation — his attraction to Easter’s
beauty. Is he trying to talk up the stock
market? Laying the groundwork to
defy his health advisers? Shifting
blame for an economic slowdown to
the governors?
In t he end, it matters little. Whatever
the reason, Trump is wishing us all a
very deadly Easter.
[email protected]MICHAEL GERSONTrump’s
Easter festival
of infection
It is impossible to imagine
most priests and pastors
treating the lives
of their congregants
with such disdain.