Congress Hits Coronavirus Crossroads   05/26 06:33

   Congress is at a crossroads in the coronavirus crisis, wrestling over 
whether to "go big," as House Speaker Nancy Pelosi wants for the next relief 
bill, or hit "pause," as Senate Majority Leader Mitch McConnell insists.

   WASHINGTON (AP)  Congress is at a crossroads in the coronavirus crisis, 
wrestling over whether to "go big," as House Speaker Nancy Pelosi wants for the 
next relief bill, or hit "pause," as Senate Majority Leader Mitch McConnell 
insists.

   It's a defining moment for the political parties heading toward the election 
and one that will affect the livelihoods of countless Americans suddenly 
dependent on the federal government. Billions of dollars in state aid, jobless 
benefits and health resources are at stake. As questions mount over 
Washington's proper role, it's testing the ability of President Donald Trump 
and Congress to do the right thing.

   "These are the eternal debates in American history," said Richard Sylla, a 
professor emeritus of economic and financial history at New York University.

   "It's a bit like what Andrew Hamilton was facing in 1790," he said, 
describing the plan to have the new federal government assume the Revolutionary 
War debts of the states, despite protests of a bailout. It was, he said, as 
Hamilton framed it, "the price of liberty."

   As negotiations develop on Capitol Hill, the coronavirus response offers 
Congress an opportunity to shape the country's post-pandemic future but also 
carries the risk of repeating mistakes of past crises, including the 2008-09 
recession, that history does not easily forget.

   Trump and McConnell huddled late last week on next steps after rejecting 
Pelosi's plan. The Democratic speaker set the table with passage of the 
sweeping $3 trillion coronavirus relief bill, which includes $1 trillion to 
shore up states and cities to avert municipal layoffs, $1,200 stipends to 
Americans and other aid.

   "We could have done bigger," Pelosi told The Associated Press in a recent 
interview.

   With more than 38 million unemployment claims, the Republican response 
centers on kick-starting the economy to reduce the need for more federal 
intervention.

   Republican priorities are to wean Americans off unemployment benefits to 
nudge people back to work and provide liability protections for businesses that 
reopen.

   Republicans want to eliminate the $600 weekly unemployment benefit boost, 
arguing it "handcuffs" some employees with higher pay than they earn at their 
jobs. McConnell also wants to protect doctors, schools and others from 
COVID-19-related lawsuits  a "red line," he says, for any deal.

   "There's a high likelihood we will do another rescue package," McConnell 
said on Fox News. "We need to work smart here."

   The political and economic debate stretches beyond the halls of Congress as 
wary Americans await Washington's next move.

   It was Federal Reserve Board Chairman Jerome Powell who counseled Pelosi to 
rely on historically low interest rates to "go big," while Treasury Secretary 
Steven Mnuchin warned of "permanent damage" to the economy unless businesses 
reopen.

   Washington has been here before. Staring down the 2008-09 financial crisis 
forced the House and Senate into a historic debate over the size and scope of 
government that still resonates today.

   Then, like now, countless Americans fell swiftly into the ranks of the newly 
unemployed, while the very foundations of the American dream  home ownership 
then, health now  hung in the balance. Then, banks needed a federal 
lifeline; today, businesses look to Washington for help.

   Pelosi told the AP the biggest lesson learned was to be "very prescriptive" 
in how the money would be spent after facing a backlash that the rescue 
benefited Wall Street over Main Street.

   But perhaps another lesson from the earlier crisis was the voter revolt 
against big government. The bank bailout and recovery act sparked the rise of 
the tea party wing of the GOP. Pelosi lost her gavel in the 2010 election, and 
Republicans took control of the House.

   Many of the same tea party forces  including the deep-pocketed Koch 
network  are aligned with Trump's push to prevent state aid, reopen the 
country and get people back to work.

   "The American people need to understand the choices they have," said North 
Carolina Sen. Thom Tillis, one of the most endangered Republicans seeking 
reelection in the fall, during an online forum with the Koch-backed Americans 
for Prosperity.

   Tillis opposes Pelosi's "manifesto" and doesn't expect the Senate to act 
before July. He said of the GOP-held Senate, "We're a bulkhead against bad 
happening."

   Despite rare bipartisan support for earlier aid, the $2 trillion bill 
approved in March, neither side was particularly pleased with the outcome, the 
largest federal intervention in U.S. history.

   Polling, however, shows Americans favoring the federal response, even as 
they have some concerns about spending.

   An AP-NORC poll conducted in late March found that elements of the stimulus 
package were widely popular. The poll found that about 9 in 10 Americans 
favored the federal government providing funding to small businesses and 
hospitals.

   About 8 in 10 said they were in favor of suspending evictions and 
foreclosures, giving lump-sum payments to Americans, increased unemployment 
benefits and suspended student loan payment.

   A mid-April NBC/Wall Street Journal poll showed registered voters somewhat 
more likely to say they were concerned about the federal government spending 
too much on economic stimulus and driving up the budget deficit than they were 
worried that too little money would be spent, lengthening the recession, 48% to 
40%. The remaining 12% said they didn't know.

   Democratic Sen. Debbie Stabenow acknowledged the $3 trillion proposal is a 
"big number."

   But she said on her drive home to hard-hit Michigan, "The cost of inaction 
will be much higher."