Federal Reserve Chairman Jerome Powell acknowledged the severity of the economic circumstances this morning, while conceding there are limits as to what the Fed can do through monetary policy. The Trump-appointed chairman made clear the onus is on Congress to step up -- by spending more.
"Additional fiscal support could be costly, but worth it if it helps avoid long-term economic damage and leaves us with a stronger recovery," Powell said.
House Democrats appear to be on the same page as the Federal Reserve chairman.
Democrats controlling the House have unveiled a $3 trillion-plus coronavirus relief bill -- the fifth coronavirus response legislation so far -- and are planning to pass the measure on Friday. The legislation replenishes existing accounts to respond to both the COVID-19 health care crisis and to try to ease the economic impact of the pandemic, which has produced record job losses and fears of a depression.
NBC News dug in on some of the key details in the HEROES Act -- the Health and Economic Recovery Omnibus Emergency Solutions Act -- and the Center on Budget and Policy Priorities' Robert Greenstein, who was not at all impressed with the latest economic bill, praised the House Democrats bill because it "steps up to the plate and provides the type of response the nation needs."
Republicans have been unrestrained in their condemnations of the bill, though they have not offered a proposal of their own. What's more, a GOP alternative should not be expected anytime soon: Donald Trump has said he's in "no rush" to engage in economic policymaking; Mitch McConnell said his party has not "yet felt the urgency of acting immediately"; and the White House said talks may not begin in earnest until June. If Jerome Powell's comments changed the Republicans' calculus at all, party leaders have remained silent on it.
We're instead left with bizarre criticisms from assorted GOP lawmakers, one of whom suggested the Democratic legislation might require him to wear a face mask in the shower. (It wouldn't.)
All of which is to say, as conditions worsen and the crisis becomes more acute, Democrats are acting like members of a governing party, while Republicans are acting like members of a post-policy party -- which, incidentally, is what my upcoming book is all about.
Vox's Ezra Klein had a compelling piece a couple of weeks ago, noting that Democrats aren't in a majority position in the nation's capital -- the GOP still controls the Senate and the White House -- but Dems are nevertheless playing the role of the party in power, in part because they want to, in part because it comes naturally, and in part because it's a role their rivals are content not to fill.
"Democrats are acting as the governing party even though they're in the minority," Ezra wrote. "They're fighting for the baseline policies that any normal administration, Republican or Democrat, would be begging for right now."
It's a curious dynamic: in an election year, Democrats are fighting for policies that would boost the economy and help the party in power. Dems are largely indifferent to the electoral effects because they're desperate to help the public and they believe the progressive ideas in the HEROES Act would make a positive, material difference.
As counter-intuitive as it may seem, Republicans -- who no doubt realize that Donald Trump would be in a stronger political position if Congress did more to help those crushed by the severe economic downturn -- are responding to the Democratic plan by hitting the brakes and questioning the need for additional investments, even in the face of Depression-level unemployment, even as the Republican-appointed Fed chairman pushes Congress to pursue ambitious action.
Why? There's a combination of factors unfolding simultaneously. Some Republicans are uncomfortable with an expansive federal role in response to a pandemic, and may have ideological objections to the public seeing Washington, D.C., solving problems. Other Republicans appear to be preparing for a Biden administration by pretending anew to care about the deficit. Plenty of Republicans are open to the idea of passing some kind of bill, but not if it means helping constituencies the GOP doesn't like.
Whatever the motivation, the political landscape features one party scrambling to at least try to help, while confronting a rival party that prefers passivity.
Rep. Ro Khanna (D-Calif.) told Ezra, "The irony is, a Republican Congress would never have given this to Obama in an election year. They didn't give it to him in his first year of the presidency. We have been far more responsible about how we're operating."
That's unambiguously true. It's also emblematic of how a governing party is expected to operate. Its post-policy rivals should take note.