ASSOCIATED PRESS
As the impasse over another round of stimulus benefits drags on, House Speaker Nancy Pelosi (D-CA) made a noteworthy claim this week. She claimed that the White House refused to acknowledge the funding that “experts” knew was needed in the next stimulus deal. Here's what she said:
“The Administration’s continued failure to acknowledge the funding levels that experts, scientists and the American people know is needed leaves our nation at a tragic impasse."
I immediately reached out to Speaker Pelosi with questions related to her claim. I was particularly interested in the funding levels she is demanding on the two key issues blocking a stimulus deal—enhanced unemployment benefits and aid to state and local governments.
I asked the Speaker three things:
- To identify the experts and scientists she was referring to in her statement.
- To identify the experts that support her demand for $600 a week in unemployment benefits
- To identify the experts that support her demand for $915 billion in aid to state and local governments.
She has not responded.
On the two key issues, in fact, many experts do not support either a $600 a week unemployment benefit or $915 billion in state and local government funding.
Stimulus Issue #1: Enhanced Unemployment Benefits
It's easy to find partisan opinion supporting either a $600 weekly benefit proposed by Democrats or a lower amount proposed by Republicans. In terms of a bipartisan report by leading economists, however, one published by The Aspen Institute in June stands out.
The report, Promoting Economic Recovery After COVID-19, was authored by four experts from both sides of the aisle:
- Jason Furman, named by President Barack Obama as chair of the Council of Economic Advisers
- Timothy Geithner, Treasury Secretary during the Obama administration
- Glenn Hubbard, who served as chairman of the Council of Economic Advisers under President George W. Bush
- Melissa Kearney, Director of the Aspen Institute’s Economic Strategy Group
They do not support Speaker Pelosi's position of a $600 weekly benefit. Because $600 in extra unemployment benefits replaces more than 100% of lost wages, the authors noted that continuing that rate would be "a problematic system going forward, especially as the unemployment rate starts to fall."
Rather, the goal should be to balance the need to help individuals during this difficult time while not helping so much that they don't want to go back to work. The report states, "[o]ptimal unemployment insurance requires balancing the desire to help households smooth their consumption against the moral hazard of unemployment insurance discouraging work."
to accomplish this goal, they propose a system that would pay, at most, $400 a week in unemployment benefits. Specifically, the report argues for federal unemployment assistance "of up to 40 percent of covered wages with a maximum federal UI benefit of $400." It notes that such a benefit would replace 80 to 90% of of lost wages for those making the median wage.
In negotiations over a stimulus package, the Republicans have offered $400 a week in unemployment benefits. So far, Speaker Pelosi continues to demand $600.
Stimulus Issue #2: State and Local Government Funding
Speaker Pelosi's position on state and local government funding is even more tenuous. I have yet to find a single expert report that supports a funding level of $915 billion. Even the most left-leaning economists that I can find come in hundreds of billions of dollars less than this.
Perhaps the most respected estimate of state and local government budget shortfalls comes from Moody's Analytics. In a report released in June, Moody's Analytics called for $500 billion in aid, almost half of what Speaker Pelosi is demanding: "Under baseline economic assumptions, we project that Congress and the White House will need to enact approximately $500 billion in additional flexible aid to states and local governments over the next two fiscal years to avoid major damage to the economy."
And that amount wasn't what was needed right now. It covered the next two years. Even if one assumes a second Covid-19 wave, Moody's Analytics doesn't support $915 billion in aid. They put the number at $750 billion. And as for the funding levels Speaker Pelosi wants, the report had this to say, "the $1 trillion in aid recently approved as part of the house’s HEROES Act would be enough to raise the eyebrows of even the most aggressive advocates of fiscal stimulus."
Even left-leaning organizations don't put the need anywhere close to $915 billion. For example, The Center on Budget and Policy Priorities (CBPP) estimates that states face about $555 billion in projected shortfalls through June 30, 2022.
To be sure, these numbers are significantly below the Republican's current offer of $150 billion. Of course, the $500 billion would cover shortfalls over the next couple of years. There's no requirement that Congress address today budget shortfalls over the next two years. More importantly, the experts do not support Speaker Pelosi's demand of $915 billion.
We will update this article if Speaker Pelosi responds to our request for comments.
"really" - Google News
August 29, 2020 at 08:02PM
https://ift.tt/3b8w6UD
Fact Check: Do Experts Really Support Nancy Pelosi’s Stimulus Deal Demands? - Forbes
"really" - Google News
https://ift.tt/3b3YJ3H
https://ift.tt/35qAk7d
Bagikan Berita Ini
0 Response to "Fact Check: Do Experts Really Support Nancy Pelosi’s Stimulus Deal Demands? - Forbes"
Post a Comment