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March 29th, 2024

The Nation

How a bipartisan stimulus became a political stumbling block

 David Weigel

By David Weigel The Washington Post

Published July 13, 2020

The Cares Act, a $2 trillion stimulus bill designed to float American workers and businesses through the coronavirus recession, passed with almost unanimous support. If any government program might be robust enough to survive campaign politics, it would be this - an election-year deal between an unpopular president and a party that desperately wants to beat him.

Yet in the past week, "the single biggest relief package in American history," as President Donald Trump accurately labeled the legislation, has evolved toward the political fate of most other spending bills. Candidates who benefited from it, however indirectly, are accused of taking handouts; calls for another round of benefits have been muted.

Less than two weeks before the bill's expanded unemployment benefits expire, the Cares Act has emerged as a political stumbling block in House and Senate races. The Paycheck Protection Program, which provided loans that companies are to repay and has helped at least temporarily halt some business losses, gets attacked as a giveaway; unemployment benefits that added up to more than some workers' salaries have become cautionary tales for Republicans.

"We knew there was a problem with enhanced unemployment, in that [in] certain cases, people were paid more than they made," Treasury Secretary Steven Mnuchin said in a Thursday interview on MSNBC. "We want to incentivize people to go back to work."



In Congress, Republican jitters about more generous benefits have led to proposals for benefits that would go to fewer people, making less money - though Democrats are ready to cut more checks, even if a president they oppose would get a political win. In campaigns, meanwhile, a PPP program that made 4.4 million loans in an attempt to prevent businesses from laying people off has become a source of occasional embarrassment, with candidates getting hammered for benefiting from those loans, whether or not they supported the program in the first place.

"I don't think we ever dreamed that we would be providing financial assistance to political campaigns," Sen. John Cornyn, R-Texas, said after a KXAN reported that Christine Mann, a Democrat seeking a suburban House seat near Austin, got a $28,600 PPP loan.

Mann, even before getting negative press for the loan, returned it. (Any company was eligible to apply for, and get, a PPP loan.) But more tenuous connections have become problems for other candidates, with the attacks usually seeking out hypocrisy. In Arizona, Republicans have attacked Democratic Senate candidate Mark Kelly's business career and speeches; Kelly tweeted last month that "too many small business owners were left with no relief, especially those in tribal communities," and that Congress should "ensure that the relief is getting to those who need it most."

When names of PPP recipients were published, a company co-founded by Kelly was revealed to have taken a seven-figure loan, as did Giffords, the gun safety group he ran until last year. Neither was a large corporation, but Kelly got whacked anyway.

"Mark Kelly tried to score cheap political points by criticizing the bipartisan success of PPP while quietly taking the money for his own large corporation," Republican Sen. Martha McSally's campaign manager told the Arizona Republic, as Kelly retained a small stake in the company.

In Nevada, where Republicans are working to defeat Democratic Rep. Susie Lee, they've focused on her success in letting gaming companies obtain PPP loans, which came before her husband's gaming company got a PPP loan to rehire employees. "Conflict of interest would be putting my personal interests above the interests of my constituents," Lee told the Nevada Independent. Republicans responded with a nickname: "Swindlin' Susie."

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Candidates largely have been caught in the crossfire of PPP stories, which have frequently focused on large corporations or comfortably wealthy business owners who've benefited from a much needed bailout. There are echoes of what happened in 2009 and 2010, when the passage of the nearly trillion-dollar American Reinvestment and Recovery Act became a political football for Republicans.

The difference then was that all but three Republicans, all senators, opposed that legislation; Republicans were so happy with this year's legislation that the president, as he typically has done since the impeachment trial, held a signing ceremony that included no Democrats.

In ordinary times, bipartisan support for a program, or a bill, usually neutralizes the effectiveness of political attacks. For incumbents, the Cares Act has generally looked like a winner, with polling from both major political parties finding voters satisfied with Congress's initial response and, for most of the spring and summer, optimistic about recovery.

But decades of skepticism about "handouts," and about the winners and losers in any major government program, have led to an intermittent wide-scale shaming. That shouldn't have been surprising. Sen. Elizabeth Warren, D-Mass., who like every Senate Democrat backed the Cares Act, called for more transparency in the ongoing loan process, on the premise that the most powerful loan-seekers would crowd out small and minority business owners.

"We knew PPP was broken," Rep. Pramila Jayapal, D-Wash., tweeted last month. Like many Democrats, she preferred a support system that was more generous for small businesses and workers and less so for large businesses, like the ones deployed in Europe. "We knew minority-owned businesses weren't receiving help. We knew mass unemployment wasn't being ended. And now, it's clear the Trump [administration] has been completely corrupt with this program."


One month later, and after billions of dollars were distributed, coverage of a PPP success story - unemployment a bit lower than projected - has been nudged aside for coverage of whether some recipients didn't deserve it.

Was it inevitable? Worries about transparency for political money have been circulating for years. In the aftermath of the 2009 stimulus, many on the left argued that fretting about how handouts would look, and how grants to unsympathetic-looking projects would backfire, stopped the Obama administration from doing more. Obama's vice president has proudly defended the 2009 approach, repeatedly contrasting the lack of controversy back then to the high-profile stories about big businesses or politically connected people getting loans now.

"I'm the guy that had responsibility of handing out $84 billion in the Recovery Act in the financial recession," Joe Biden said this week in remarks near Scranton, Pa. "I met once every two weeks with the inspectors general. Everything was open. What are we finding out now? That large chains and hotel chains and chains of restaurants, they divided all the restaurants up and treated them as individual restaurants, they're already making hundreds of millions of dollars. The mainstream mom-and-pop businesses, they didn't get the money."

There was little chance, in an election year, that the biggest stimulus package in American history would hit without controversy. But when Congress returns to respond to the ongoing crises, months of cynicism and negative spin may weigh more heavily than the feelings of March.

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