Dave Weigel reports on House Republican leadership’s preemptive strike against a new stimulus bill. The details, quite frankly, boggle the mind. Among the items Republicans have a problem with are extending unemployment benefits, extending COBRA subsidies, extending child tax credits and extending higher FMAP matching rates (Medicare).
One would have to imagine that the Democratic campaign committees are licking their chops over such brutal honesty from Republican leadership. Those on the left side of the aisle have always maintained that in order to cut spending, without touching defense, would mean cutting some very popular (and good) programs. But up until now, the GOP did a good job about making vague references to cutting spending. Now, the Democrats have evidence of just where the GOP priorities lie.
Cutting popular social safety net programs is a dangerous political game, even in relatively good economic times. But to call for such cuts while the country is facing a 10% unemployment rate and suffering through the Great Contraction is pretty close to political suicide. Not only is it politically dangerous, but it’s terrible policy.
To some degree, this reflects the current fetish over deficit size, which even has some adherents in the Democratic Party. It is rather amazing that some in Washington fail to grasp economics or public finance. Concern about deficits when the country is in such dire economic straits is Neo-Hooverism. They fail to understand the important role government spending plays in spurring economic growth, particularly when monetary policy is useless (zero lower bound). And they fail to realize that borrowing is virtually cost-free, with respect to interest on debt service.
I am shocked and appalled that a major political party would actually be calling for less spending on social safety net programs at a time like now. It is not only ignorant of economics, but amounts to political suicide. This is not how to grow a party, unless the only people you want in your party are the lunatic fringe.