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Alfonse D'Amato

We must be realistic in shoring up the economy

Posted

It’s becoming more apparent each day that the Unites States will not return to any semblance of normalcy until there is a working vaccine for Covid-19. In the meantime, we must face the reality that providing essential services to keep our economy going is job No. 1.

Our health care workers are our first line of defense against the pandemic. People who grow and transport our food, as well as the grocery store workers who stock the shelves, are critical. Our police, firefighters, sanitation workers, transit operators and other local government workers who provide basic services are keeping America running.

Add to this list of essential employees the teachers and school administrators, bus drivers and school workers who will soon be asked to take our children back into school. We are more fortunate in New York than many other states, because the pandemic here seems to have abated to the point at which carefully reopening our schools is possible. It will mean taking extra precautions to maintain the health of students, teachers and other school workers, including measures that will add considerably to school budgets.

The recent debate in Washington about the next round of federal pandemic relief has centered almost exclusively on helping the unemployed with a continued $600-per-week federal unemployment insurance subsidy. No one can argue that the 30 million unemployed Americans receiving this aid aren’t in need of assistance. They are out of work through no fault of their own.

But it’s important to understand that this generous benefit adds up to $18 billion per week. That money is being borrowed by the U.S. Treasury, and will eventually have to be paid back to those who are loaning it to the federal government. And for many workers, their unemployment payments — including state and federal benefits — now exceed the weekly wages they were earning before losing their jobs.

It is not unreasonable to ask that this benefit be adjusted to a more realistic and fiscally sustainable level. That doesn’t mean that the federal government should retreat on providing relief to Americans. Billions of dollars are needed to support the safe reopening of our schools. And billions more should go to helping states and local governments provide the essential services that would be drastically reduced without federal assistance.

A fair way to assist states and local governments would be for Washington to help them make up for the sales tax revenue they’ve lost due to the pandemic. These sales tax losses are fairly straightforward to calculate. And since every state collects sales taxes, federal aid making up these losses could be fairly distributed across the country. Red states and blue states would benefit equitably.

Another area where more federal aid is needed is for small businesses. Many received aid under the Payroll Protection Act, which extended them loans and grants to help keep their workers employed. Giving these businesses an additional lifeline so they can continue to stay open and provide jobs is a good investment. Economists of all stripes tell us that if these businesses were allowed to sink, many would never come back. The loss to the economy would be enormous.

Finally, our hospitals and other medical facilities have been badly wounded by the Covid-19 crisis, as almost all other hospital admissions and doctor’s visits dried up these past few months. They should get the extra help they need to continue to provide quality health care.

And it’s not too early to begin to think about what the economic future will look like once the virus is defeated. The business landscape will be altered for years to come. The real estate industry may see wrenching change if offices remain empty after the pandemic fades. Malls may never recover the business they’ve lost to online sales. We can expect what amounts to a national reorganization of our economy, with many old and respected businesses failing and many new ones struggling to emerge.

Let’s not lose our sense of hope and optimism. The American spirit is boundless. We’ve learned some hard lessons, including that we must bring critical manufacturing home rather than depending on the rest of the world to provide essential medicines and products.

The promising race to develop a Covid-19 vaccine by our scientists shows that with a concerted effort, even the seemingly impossible can be made possible.

Al D’Amato, a former U.S. senator from New York, is the founder of Park Strategies LLC, a public policy and business development firm. Comments about this column? ADAmato@liherald.com.