Unsanitized: The COVID-19 Report for July 23, 2020

Mitt Romney Wants to Use the Crisis
to Cut Your Social Security
A Bowles-Simpson-style process to cut benefits could end up in the
Republican economic relief bill

 

At least Mitt's happy; Social Security and Medicare recipients may not
be. (Tom Williams/CQ Roll Call via AP Images)

First Response

Treasury Secretary Steven Mnuchin went on CNBC this morning to describe
the agreement between Senate Republicans and the White House on a
coronavirus response bill. This is one half of the Republican caucus,
with no Democratic or House Republican input, and it took three and a
half days. The boosted unemployment runs out in two or three days for
most of the 25 million recipients with a July deadline. Another 1.4
million signed up last week, and millions more are joining them

as the economy sags. The lack of urgency is as cruel as the details in
the bill.

Quickly, here are the elements in a bill that's less than one-third
the size of the House Democrats' opening bid, the Heroes Act.
There's $105 billion for helping schools, with $35 billion of that
only for schools that reopen

on time; second Payroll Protection Program checks for businesses that
lost more than 50 percent of their revenue; $16 billion for testing; a
vague promise of direct payments to individuals (no amount or
eligibility requirement given); some hiring tax credit; and unemployment
benefits with a "70 percent wage replacement." Corporate liability
immunity wasn't mentioned but you can assume it's in there.

The extra $600 a week in unemployment right now, at least in theory, was
supposed to provide 100 percent replacement for workers at the median
income. It was given as a flat benefit to everyone because state
unemployment systems were said to be unable to alter it for individual
applicants. So that's at least a 30 percent cut to unemployment
benefits, pushing them down to at least $420 a week, and maybe more
depending on how they define the wage replacement and what they plan to
do. There was talk yesterday of an extension as low as $100 a week
.

Missing here is the payroll tax cut Trump wanted, but also missing is
any money for state and local government; the $150 billion from the
CARES Act could now be used for budgetary purposes rather than just
coronavirus-related uses, but that's it. This is arguably worse than
the UI cut; the lack of state fiscal aid in the last bill induced
premature reopenings
,
and will just keep us on a perpetual yo-yo until there's a vaccine,
with millions of state and local workers thrown off the job. The bill is
a nightmare and it puts the two parties miles apart as the cliff looms
.

But this may not be the worst of it. To placate angry conservatives
who think you
can only break budgets with trillion-dollar tax cuts and unlimited
military spending, not help for unemployed or sick people, a measure
facilitating future cuts to Social Security and Medicare could find its
way into the bill. And the prime mover behind that is every Democrat's
favorite 2012 presidential candidate, Mitt Romney.

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Romney has been pushing publicly

for including a bill of his in the relief package called the TRUST Act.
Written with Sen. Joe Manchin (D-WV), Romney's TRUST Act

would create bipartisan "rescue committees" to come up with plans to
make each federal trust fund-Social Security and Medicare primarily,
but also the Highway Trust Fund and others-solvent for the next 75
years. It's modeled after the "Catfood Commission" in the
Bowles-Simpson process. Like with that, once the plans are approved,
they get a fast-track delivery to the House and Senate floor, with no
ability for amendment. The plans would still need to reach a 60-vote
final threshold to pass the Senate.

Rising host Saagar Enjeti was the first to report
that the TRUST
Act could be folded into the relief bill. The New York Times included it
in their roundup

last night.

This would be appalling. No federal trust fund, by definition, can reach
bankruptcy; Congress can always replenish it. What Romney wants to do
here is create a process to force a resolution to earned benefit
programs on his terms. While it doesn't fully eliminate the filibuster
for Social Security cuts, it builds a process to invite those cuts to be
made. Just a decade ago, Barack Obama favored some cuts, remember.

Moreover, it's designed to trap Democrats. Mitch McConnell wants
nothing more than to kill social insurance spending while keeping his
fingerprints off it. Passing the TRUST Act would set in motion a runaway
train that has to move inexorably toward chipping away at Social
Security and Medicare. It would restart the fiscal mania in Washington,
and pressure Democrats to be "serious" by degrading the most popular
programs the party ever created. Fierce grassroots pushback stopped this
cold during Bowles-Simpson, but the deficit hawks only have to be right
once. It would also conveniently be an enormous distraction during
what's expected to be an extended economic downturn.

There are a few decent ways to achieve solvency (eliminating the payroll
tax cap for Social Security, for one), but that's not what this
process is meant to do. By design, it brings together everyone in D.C.
to cut your grandmother's Social Security check, so no one can be
fully blamed.

Let's at least blame Romney, the great hero of the resistance, the GOP
dissident who dares to question his party
.
This man of principle who rejects the evil Trump wants to increase
senior poverty. That's his great project. He was a severely
conservative presidential nominee on economics and he remains severely
conservative today. With friends like these, who needs enemies?

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: I was
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.
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Days Without a Bailout Oversight Chair

118
.

We Can't Do This Without You

Today I Learned

* There was a "Mitch Better Have My Money
"
rally for unemployment benefits in Kentucky yesterday. (WJLA)

* Richie Neal successfully kept surprise billing fixes out

of the next bill. (Politico)

* Only 1 in 10 Americans

want schools to reopen in person. (Washington Post)

* Under cover of the pandemic, the asylum system, even for small
children, has been eliminated
. (Associated
Press)

* The government pays Pfizer nearly $2 billion

for 100 million hypothetical vaccine doses. (HHS.gov)

* The notion of reinfection

is complicated by original false positives so it's hard to show real
evidence of it. (New York Times)

* Another retail bankruptcy
,
this one the parent company of Ann Taylor and Lane Bryant. Expect many
closures. (CNBC)

* Wells Fargo put people into forbearance

without their knowledge. Shades of the foreclosure crisis. (NBC News)

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