After Late Drama, Trump Signs $2 Trillion Coronavirus Bill

Plus, Trump orders GM to produce ventilators By Yuval Rosenberg and Michael Rainey After Late Drama, House Passes and Trump Signs $2 Trillion Coronavirus Bill The House of Representatives approved a massive, [$2 trillion coronavirus relief package]( on Friday and President Trump signed it into law, but not before some late drama that threatened to delay enactment of the unprecedented measure to lessen the economic toll of the pandemic. The House passage came by overwhelming voice vote, after an objection from one Republican lawmaker forced hundreds of members to scramble back to Capitol Hill. One congressman infuriates many: Rep. Thomas Massie of Kentucky, described by [Politico]( as “a libertarian-leaning gadfly frequently at odds with leadership,” opposed the relief bill because it adds to the deficit and included provisions he said were unrelated to the pandemic. And he argued that having a vote without a quorum present — at least 216 of the 430 current members of the House, far exceeding the CDC’s guidelines against gatherings of more than 10 people — would be unconstitutional, though as [The Washington Post]( notes, that requirement is rarely enforced. Massie’s procedural move drew the ire of President Trump and fellow lawmakers. Trump took to [Twitter]( to rip Massie as “a third rate Grandstander” and called for him to be thrown out of the Republican Party. Representatives of both parties criticized Massie’s stance as [irresponsible]( [selfish]( and [costly](. Leaders in both parties tried to talk the Kentucky lawmaker out of following through, to no avail. Some conservatives [defended]( Massie, but when he called for a recorded vote, he failed to get the required support of one fifth of the members present, ensuring the defeat of his motion within a matter of seconds. Lawmakers — spread throughout the chamber and the public galleries above the House floor to avoid close contact, armed with hand sanitizer and disinfectant wipes, with some donning gloves — cheered the passage. “House Majority Leader Kevin McCarthy elbow bumped a top leadership aid who’d counted numbers in his head,” the post reports. “Rep. Kevin Brady (R-Texas) walked across the aisle and elbow bumped Majority Leader Steny H. Hoyer (D-Md.). A few curses seemed to be hurled from rank-and-file members on both sides.” What’s next: The House will be in recess for an undetermined amount of time and the Senate is out until at least April 20. House Speaker Nancy Pelosi has indicated that Democrats will be working on the next phase of coronavirus relief legislation, but House Minority Leader Kevin McCarthy of California has questioned whether additional steps are needed yet. In the meantime, federal departments and agencies will have to confront the challenge of quickly implementing the sweeping relief bill, including sending payments to families and setting up loan facilities for businesses. Trump Orders GM to Produce Ventilators President Trump invoked the Defense Production Act Friday to force General Motors to start producing ventilators. In a presidential [memorandum]( directed at just one company, Trump authorized the Secretary of Health and Human Services “to require General Motors to accept, perform, and prioritize Federal contracts for ventilators.” Earlier in the day, Trump lashed out at the company and its CEO, Mary Barra, accusing the company of charging too much and moving too slowly in its effort to produce mechanical ventilators. “As usual with ‘this’ General Motors, things just never seem to work out,” Trump [tweeted](. “They said they were going to give us 40,000 much needed Ventilators, ‘very quickly’. Now they are saying it will only be 6000, in late April, and they want top dollar. Always a mess with Mary B.” Trump also appeared to order GM and perhaps Ford to start producing the medical equipment, though in doing so he referred to an auto plant GM no longer owns: “General Motors MUST immediately open their stupidly abandoned Lordstown plant in Ohio, or some other plant, and START MAKING VENTILATORS, NOW!!!!!! FORD, GET GOING ON VENTILATORS, FAST!!!!!!” The background: General Motors has been in negotiations with Ventec Life Systems to form a joint venture that would have the capacity to produce as many as 80,000 ventilators, but according a [report]( in The New York Times Thursday, the Federal Emergency Management Agency balked at what could be a $1 billion price tag. (It's not clear yet what the government will be paying under Trump's order.) Perhaps not coincidentally, Trump downplayed the need for more ventilators on Thursday night in an interview with Sean Hannity of Fox News. “I don’t believe you need 40,000 or 30,000 ventilators,” he said in an apparent reference to a request made by New York State. “You go into major hospitals sometimes, and they’ll have two ventilators. And now all of a sudden they’re saying, ‘Can we order 30,000 ventilators?’” The deeper background: Trump said more than a week ago that would invoke the Defense Production Act, a 1950 law that gives him the power to coordinate the production of goods needed to respond to a national emergency such as the coronavirus epidemic. But until today he had declined to order any companies to start producing desperately needed equipment, saying he prefers to allow private companies to meet the demand for medical supplies on a voluntary basis. Along with several key public and private White House advisers, the U.S. Chamber of Commerce had reportedly lobbied Trump to oppose the use of the act, and the president has recently suggested that he sees federal coordination of private production as something akin to socialism. "Call a person over in Venezuela," Trump said Sunday. "Ask them how did nationalization of their businesses work out. Not too well." Instead, Trump said that the country’s industrial base is mobilizing at a level not seen since World War II on its own, while [claiming]( that “[w]e’re getting what we need without putting the heavy hand of government down.” In a statement Thursday, the White said the response from private industry “has been overwhelming, fulfilling government-identified needs faster than anyone thought possible.” Facts on the ground say otherwise: A growing chorus of critics have argued that the country is falling well short of meeting the needs of the hospitals dealing with a surge of patients. More than 100 former national security officials sent Trump a [letter]( this week asking the president to use his authority under the DPA to increase the supply of medical goods, since “private efforts without more extensive government support are proving far from sufficient to meet the current and anticipated needs.” More broadly, the signatories said, the government needs to step in and play a central organizing role in the middle of a national emergency. “Beyond questions of supply, the private sector lacks the ability to process incoming requests, prioritize the most urgent needs, and coordinate with other companies absent more concerted government involvement,” they wrote. “That is precisely what the DPA is designed to do.” Why a Huge Deficit Isn’t a Huge Concern Right Now The enactment of the coronavirus relief package ensures that the federal deficit for this year, already expected to exceed $1 trillion, will swell by trillions more, potentially topping the post-World War II record of 9.8% of GDP set amid the financial crisis in 2009. Yet even many fiscal conservatives aren’t sweating this year’s deficit. Neil Irwin, an economics correspondent for The Upshot at The New York Times, [explains]( that not taking such aggressive, deficit-raising action could be even worse for the public debt outlook over time: “The very large deficits on the way in 2020 are more likely to leave the United States in a better fiscal situation for the years ahead than an alternative in which the government is more tightfisted but fails to prevent the widespread collapse of American businesses or help workers in desperate financial straits. “Economists focus not on the absolute level of the debt, but on the interest costs to service it relative to the size of the economy. So a prolonged recession tends to be worse for the debt picture than some extra spending. Moreover, signals from financial markets suggest that the government should have little trouble borrowing vast sums of money on favorable terms. “Finally, this spending is meant to last only as long as needed to get the economy on track after the containment of the coronavirus pandemic, meaning it should be a one-time increase to public debt rather than an increase to permanent deficits.” Irwin also notes that the United States can now issue 30-year bonds that pay less than 1.5%, meaning that borrowing costs are cheap — actually, negative in inflation-adjusted terms. House Speaker Nancy Pelosi said Thursday that Federal Reserve Chairman Jerome Powell had advised her to [“think big”]( given that interest rates are so low. And Fitch Ratings on Thursday reaffirmed the country’s AAA credit rating, indicating that investors do not see greater credit risk ahead. [Read Irwin’s full piece at The New York Times.]( Your Prize for Making It Through the Week It may be some time before we can see movies in the theater again. In the meantime, here’s a [rundown]( of some of the new and recent films that are being released through streaming services such as Apple TV and Amazon Prime. Hey, we made it through another week. That's something. Email your comments and questions to yrosenberg@thefiscaltimes.com. And please tell your friends they can [sign up here]( for their own copy of this newsletter. News - [How to Handle $350 Billion in Loans? 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The Pain Is Just Beginning.]( – Heather Long, Washington Post - [Sad About a Buyback Ban and Pay Cuts? Deal With It]( – Conor Sen, Bloomberg - [The Fed's Cure Risks Being Worse Than the Disease]( – Jim Bianco, Bloomberg - [No, Trump Is Not Going to Suddenly Become FDR]( – Paul Waldman and Greg Sargent, Washington Post - [Social Security Fixes to Protect the Poorest]( – Teresa Ghilarducci, Bloomberg Businessweek - [There Is No Reason to Bail Out Big Companies]( – Robert Reich, Bloomberg Businessweek [Like Us on Facebook]( [Like Us on Facebook]( [Read Us On the Web]( [Read Us On the Web]( Copyright © 2020 The Fiscal Times, All rights reserved. You are receiving this newsletter because you subscribed at our website, thefiscaltimes.com, or through Facebook. Our mailing address is: The Fiscal Times 399 Park AvenueNew York, NY 10022 [Add us to your address book]( Want to change how you receive these emails? [Update your preferences]( or [unsubscribe](.