A Socialist Perspective on the Coronavirus Stimulus Plan

Written by Florence Oppen
On March 27th, the House passed an historic $2 trillion stimulus bill with almost unanimous bi-partisan support. After denying the crisis for weeks, the government is now jumping into action, but not to help the working class.
The coronavirus health crisis is also becoming a social and economic crisis for working people and big businesses alike. Wildcat strikes have been spreading like wildfire as it becomes increasingly clear that the capitalist system in the most imperialist country in the world is unable to deliver basic healthcare services and supplies, such as masks, test kits, or hospital beds, to say nothing of more expensive life-saving equipment like ventilators.
This bailout is the largest in U.S. history, and it has been presented as a combination of measures “for everyone” from the unemployed to big business, a “bailout for all.” In reality, it is a combination of a massive bailout to major corporations, a mere two years after the big tax break Trump granted them, and just a mini-bailout for workers.
As socialists we embrace any measures that will benefit and relieve workers’ hardships, but we absolutely reject bailing out corporations, because all that money could and should go to granting critical services to workers, such as universal healthcare access and paid leave for all, and to the reconstruction of public infrastructure and the retooling of production facilities to mass produce critical medical supplies for which there are currently shortages. No company should be making any profit during this crisis. We need to declare a social emergency and redirect all productive capacities to basic needs and care with zero profit margin, and to do so in a bottom-up and democratic way where working people participate in decision making .

The Structure and Priorities of the Stimulus Plan: Profits over People

Official government communication has framed the breakdown of the stimulus package so that it appears to give more to workers (30% to the total with $600 billion) and small business (19%) than to big corporations (25% with $500 billion). The reality is very different, for the government is investing $454 billion into the very depleted Federal Reserve (which spent most of its savings in the 2008 crisis). This money, according to an article in American Prospect, will “then be placed into a ‘credit facility’ and levered up 10-1, creating a $4.5 trillion money cannon aimed at the largest corporations in America.”[1] What this is describing is for all intents and purposes a corporate slush fund.
The enormity of this bailout has been under-estimated, as some analyses are already arguing: “it’s not a $2 trillion bill, it’s closer to $6 trillion, and $4.3 trillion of it comes in the form of a bazooka aimed at CEOs and shareholders, with almost no conditions attached”.[2]  In the end it is promising corporations 17 times more than what is being given to working people. The difference between the support being granted to corporations as opposed to workers is obscene. As American Prospect points out, while working people will get “a $1,200 means-tested payment and a little wage insurance for four monthscorporations get a transformative amount of play money to sustain their system and wipe out the competition.”[3]

A New Bailout for Major Corporations

The Stimulus Plan includes $500 billion in loans for businesses, which includes loans to some of the major US corporations that have benefited from massive tax loopholes. According to an article by the New York Times: “The companies that will be receiving the largest bailouts were, until recently, enjoying unprecedented levels of corporate profitability, thanks to large corporate tax cuts, industry mergers and the avoidance of significant wage increases for employees.”[4] Airline companies will be getting $50 billion, and Boeing, brushing off the absurd levels of malfeasance in its development of the 737 Max which resulted in hundreds of deaths, will get $17 billion of public money! In the same vein, big hotel chains such as Marriott and Hilton will get public money after having spent their revenue in stock buybacks instead of increasing workers wages and benefits. The double scandal of this bailout is not that, once again, more money is given to big corporations, but that it is done with no conditions in exchange, such as the basic requirement that they pay at least a living wage of $15/hour to all workers.

A Limited Mini-Bailout for Workers

The mini-bailout for workers is short-sighted and falls way below the bare minimum necessary to weather this crisis. It consists of three measures: a direct one-time payout of $1,200 maximum for individuals making $75,000 or less and decreasing amounts for those making up to $99,999, with an additional $500 for each child in qualifying households, some unemployment measures, and a payment deferral for federal student loans. The most coveted measure is of course the one-time payout  But this money will allow most households to just cover rent for one month, with little left to spare. In parts of the country facing housing crises, such as the Bay Area, it likely won’t even cover that for many households. It will also exclude between 30 and 40 million waged workers (15% of total) who do not file taxes regularly.[5]  More than a one-time payout workers need to know that their basic needs (healthcare, food, housing etc) will be covered no matter what.
The so-called stimulus bill will also increase unemployment insurance by $600 across the country for 4 months. Now, gig economy workers, freelancers, and furloughed workers will be able to qualify for it––a positive development. The problem is that more than 3.3 million workers have already filed for unemployment, and that while the $600 extra will help, they will only allow unemployed workers to get closer to their original salary, which was often insufficient to begin witht. Workers facing additional financial strain due to the need for medical care or stocking supplies for quarantine will remain unable to face such costs.
Finally, the $350 billion in loans to help small businesses keep their employees on the payroll is a good idea, but still far below what is needed: “the total cost of payroll alone for American small businesses is $1.5tn every three months.[6] That is, small businesses need 4 times more money to ride out the crisis without firing anyone.

We Need Universal Healthcare and Paid Leave Now

This crisis is compounding the economic struggles faced by the US working class. The vast majority of workers in the US live paycheck to paycheck, which makes it impossible to accumulate any savings, pushes them into chronic debt and leaves them unable to cope with the fallout of a global health crisis using only their own resources.
Workers need another kind of relief: we need universal healthcare now with free treatment for all, universal paid sick leave which will give everyone a stable source of income, and the cessation of all non-essential economic activity to truly stop the spread of the virus. Furthermore, in order to overcome the pandemic we need to close down for-profit-America, retool all available manufacturing facilities for the production of essential medical equipment and reappropriate all existing infrastructure to fit the needs of this emergency.  Workers, through their unions, caucuses, committees, and workers centers, need to be at the forefront of planning and decision-making around this retooling to ensure that protective and safety measures are enacted.
This crisis reminds us that the only way out of these crises is to organize from below and coordinate our actions at the regional, state and national level in order to build a political alternative to neoliberal capitalism. We need to get all our unions and community organizations to form a united front to mobilize for emergency relief demands. We should follow the lead of unions like the CWA demanding that General Electric regear unused manufacturing plants to produce much needed ventilators, hire skilled union workers, and ensure their safety.  Additionally, a collection of workers has formed the Connecticut Workers Crisis Response to develop a solution out of this crisis that prioritizes the needs of working people. The immediate future and survival will be at stake in the weeks and months ahead. We cannot wait until elections in November, we need to organize now.
[1] https://prospect.org/coronavirus/unsanitized-federal-reserve-loads-cannon/
[2] https://prospect.org/api/amp/coronavirus/unsanitized-bailouts-tradition-unlike-any-other/
[3] https://prospect.org/api/amp/coronavirus/unsanitized-bailouts-tradition-unlike-any-other/
[4] https://www.nytimes.com/interactive/2020/03/27/opinion/coronavirus-bailout.html?action=click&module=Opinion&pgtype=Homepage
[5] https://www.theguardian.com/business/2020/mar/26/us-stimulus-bill-worker-relief
[6] https://www.theguardian.com/business/2020/mar/26/us-stimulus-bill-worker-relief

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