Neal calls to invest now to 'stem tide of disease'
SPRINGFIELD — In times of depression and war. And in a pandemic. That's when government must dig deep to help citizens, the Berkshires' representative in Congress said Wednesday.
For that reason, the crisis brought on by the coronavirus will again persuade lawmakers to overcome partisan division, U.S. Rep. Richard E. Neal told reporters outside his office at the U.S. District Court in Springfield, and will lead to passage of yet another immense allocation of federal money.
House leaders have outlined a nearly $3 trillion package of legislation they say is needed to to help Americans weather the pandemic's commercial downturn and to stimulate economic renewal. The 1,800-page measure may be voted on Friday.
"We are better off investing now, trying to stem the tide of the disease, rather than waiting too long when the problem becomes far worse," said Neal, chairman of the Ways and Means Committee and one the bill's authors. "This should not be a partisan issue."
While the Senate majority leader is dismissing the House measure as "aspirational," Neal said the plight of cash-strapped states will bring members of both parties into accord. The legislation, called the HEROES Act, would provide nearly $1 trillion to state, local and tribal governments.
"I can't believe there is a Republican in the United States Senate who is not going to vote to give his or her governor some assistance given the statistical data," Neal said in his open-air briefing, as cars and trucks rushed by on State Street. "These states are up against it."
He estimated that the package would be worth $22.5 billion in all to entities in Massachusetts, which faces a dramatic revenue shortfall. The bill allocates $100 billion for hospitals, which have lost revenue due in part to the cancellation of elective procedures.
Other provisions in the bill, ticked off in a 71-page summary, would extend unemployment assistance, authorize another round of $1,200 checks to Americans, underwrite the cost of child care for essential workers and provide benefits to families with dependent children in college.
Neal said the Senate leader opposed other pandemic relief measures coming out of the House, which is led by Democrats.
"If you read between the lines, Sen. McConnell did say that this is a nonstarter. Simultaneously he has said that states and cities are going to need more money [and] that he's working with the Trump administration," Neal said. "They are likely to outline a similar proposal. The president's comments have been more in line with us."
He added: "I understand that this is a document of negotiation. Despite some of the charged rhetoric that you hear about these proposals, there's another important ingredient to remember. The Senate has passed the previous three rounds unanimously."
On Wednesday, Jerome Powell, chairman of the Federal Reserve, said the nation faces an economic downturn "without modern precedent."
Powell called on Congress to help prevent bankruptcies and a period of extended joblessness. The April jobless rate in the U.S. rose to 14.7 percent, marking the biggest one-month jump ever.
If elements of the package are approved by both chambers and signed into law, the new allocations would bring the value of federal relief measures to more than $5 trillion. President Donald Trump's proposed budget for the 2021 fiscal year is $4.829 trillion.
Neal turned aside a question from The Eagle about whether it was proper to borrow so much money from future generations.
"What's the purpose? That's the better question," he said. "And I think in this instance here, we all should remind ourselves that Majority Leader McConnell authorized the borrowing of $2.3 trillion for a tax cut that overwhelmingly went to the people at the very top.
"Just think of where we'd be right now in terms of a cushion if we didn't have that tax cut of $2.3 trillion," he said. "We're borrowing money to deal with an international pandemic and I think when you talk about the consequences of borrowing from future generations, borrowing money at nearly zero percent interest to deal with a plague is a good investment."
The interest cost on borrowing for government spending is around 0.6 percent. "We are borrowing our own money. This is not like credit card debt, where you pay a credit card company or you pay a bank. This is money that we borrow from ourselves," Neal said.
Asked about timing, Neal said he'd like to see the new funding pass through Congress within days, but acknowledged that it faces high-stakes negotiations involving the four top leaders of both chambers, as well as the Trump administration.
"My preferences might not be the ones acknowledged here," Neal said.
Neal said the new package includes another $10 billion for loans that if used to pay workers can qualify as outright grants.
He again acknowledged missteps in the rollout of the Paycheck Protection Program loans through the Small Business Administration. One particular problem for many Berkshire businesses that have not yet reopened — a requirement that proceeds be used within eight weeks of the loan closing — is still unresolved, Neal said.
"We're working on that right now with Treasury guidance," Neal said."What I think was lacking in the early rounds on PPP, and I talked to Secretary Mnuchin extensively about it, was guidance from the Treasury."