By Daniel H. Stewart
Our federal representatives are currently debating another COVID-19 relief package. One of the major points of disagreement with this bill is whether (and at what price) the federal government should bailout state and local governments. Many congressional Republicans oppose such aid, but their resistance is both misplaced and outdated.
I understand good, old-fashion conservative caution, but I am flummoxed by blanket Republican push back. For Nevadans, a federal bailout of our state and local governments is not only absolutely necessary, it is obviously necessary.
Before the pandemic, the arguments against the relief would have far more strength. Now, they seem stale - archaic even. We are in extraordinary times. We simply cannot expect unprecedented challenges to separate nicely (and naturally) along our preexisting ideological fault lines. Translating our troubles into our usual partisan tongues won’t cut it.
This is no time to retreat to a quaint fiscal conservatism we seem to forget as soon as the dark clouds of crisis dissipate. Our federal government already owes over $25 trillion dollars in debt. That number will likely keep growing without pause during both feast and famine.
But we trade one error for another if we let our prior financial imprudence scare us away from what needs to be done. If armed forces invaded our shores, the deficit would not hold us back; no fiscal worries would compel surrender. Can you imagine telling soldiers in Fresno foxholes that they have to ration bullets for fear of the debt? Not a chance. We’d marshal every single resource we had to win, and worry about the accounting later. World War II basically bankrupted the United Kingdom, but does anyone doubt the cost was worth it? How is the current battle against the pandemic anything less than a fight for national survival?
Interest rates are at historic lows, below even the expected rate of inflation. There has never been a better time for the government to take out another loan. What will our deficit look like if we fail to act, and the economy falls further into the abyss, and more immediate resources are siphoned into funding state and local governments, which, unlike the federal government, usually require balanced budgets?
If our massive deficits haunt us later, it won’t be because we had to borrow during bad times, but because we could not stop borrowing in good times. We backed ourselves into this mess with bipartisan support, so let’s not pretend that there is some principled place to draw a line in the sand. There is no comprehensible, meaningful difference between $25 and $35 trillion in debt based on the rules we have chosen to live by. If we can, without care, run trillion-dollar deficits during historic economic booms, we can certainly run them during historic catastrophes.
Bailout opponents also claim the moral high-ground, and they do have certain rhetorical advantages. The very term “bailout” has baggage. With “bailouts” we tend to think of saving people from their only folly. But when a town is devastated by a natural disaster, we don’t deride the relief effort as a bailout. How is this pandemic any different than the many other unexpected, mostly unpreventable catastrophes we rally to recover from? Rescuing and defending state and local governments from the COVID onslaught is not the same thing as a Wall Street bailout. Not even close.
Sure, some states and cities have been fiscally irresponsible, and the current crisis has exacerbated budget problems that were already in play. But there is no mystery as to why Nevada’s tax revenues are plunging, and it has nothing to do with prior budget priorities. We can limit the amount of the aid to compensate for only those budgetary damages the pandemic caused. There are enough wounds to heal right now; we can leave the self-inflicted ones for later.
I have also heard that bailing out governments is supposedly unfair, as if it spares the public sector from sharing in the private sector’s pain. There is plenty of pain to go around, and this is not a zero-sum game. We can and should help both the public sector and the private sector at the same time.
Moreover, a federal bailout will help avoid hurting the private sector even more. For better or worse, there is a baseline level of government we cannot and will not live without. At some point, we will cut no more. Without a bailout, then, we will have no choice but to raise taxes on struggling Nevadans. How is that inherently fairer than taking aid from the federal government and possibly raising taxes on all Americans later?
I realize the national mood is not one of conciliation and compromise. It seems like we wake up each day looking for new ways to hate each other, then process life through an all-encompassing us-versus-them filter, where what is good for “them” must be bad for “us.” But this outdated thinking misses the most important lesson the pandemic has taught. Try as we might to wish and act otherwise, we are all in this together. All we have is “us;” there is no “them.”
The virus respects no borders; and plays no favorites. It does not care where you live, where you work, or who you vote for. There is no fortress that cannot be breached.
Economic hurt sweeps through the whole community too. One less job means one less customer; one less customer may mean one less business; and one less business means more lost jobs. And so it goes.
Widespread government cuts will leave us with reduced public services during a pandemic and more Nevadans out of work during an economic crash. Both outcomes will only increase our combined community agony, and significantly delay the return to better days.
Nevada will never recover unless we adopt an all-of-Nevada approach to recovery. All of Nevada needs a federal rescue of our state and local governments. Survive today, and there will be time enough tomorrow to settle into the comfort of our old partisan fights. But not now. Yesterday’s debate, on yesterday’s terms, will not do.
Daniel H. Stewart is a partner with Hutchison & Steffen, where he leads the firm’s Election, Campaign and Political Law practice. He has practiced law in both the public and private sectors, representing elected officials, candidates, campaigns, social welfare organizations, and other political and policy-focused clients.