How we can responsibly address coronavirus relief while helping to create a better tomorrow

The Congress is now considering another round of COVID legislation. In doing so, it needs to keep a number of things in mind in order to do what is right both for today and tomorrow. First, there is little question that another round of COVID legislation can be justified based on the current state of the economy, unemployment levels and the vaccination effort. At the same time, we should keep in mind that almost $1 trillion of the over $3.5 trillion in COVID related appropriations has yet to be spent. As a result, the real question should be: How much should we spend, for what, and based on what criteria?

I reviewed President Biden’s COVID-19 proposal and the ten Republican senators’ counter proposal in while considering the above questions. In doing so, three key criteria seemed to be appropriate in answering them. First, which items in the legislative proposals directly relate to the economic and public health impact of COVID-19? Second, how should the allocated funds be targeted to reach those with the greatest need and in a manner that will generate the biggest economic impact? Third, what conditions should be applied on any allocated funds in order to encourage all parties to do what is best for the country, our children and grandchildren?

The legislative proposals are far too vast to comment on in a comprehensive manner. Therefore, I will restrict my comments to several important issues.

First, if the proposed action or expenditure does not directly relate to COVID-19, it should be dropped from the legislation. This includes proposed foreign aid and domestic pork projects. It also includes the proposed increase in the minimum wage to $15/hour phased-in over time. An increase in the federal minimum wage should be considered but not as part of this legislation. In addition, including it in a budget reconciliation package is likely to violate the “Byrd Rule” that is applicable into the budget reconciliation process.

Second, while the additional $1,400 per person amount can be justified, the enactment of any addition support to individuals and households needs to be better targeted to people who need the money and are likely to spend the money immediately. In order to accomplish this objective, the annual income eligibility and phase-out levels should be reduced (e.g., $50,000 per person and $100,000 per household). My wife and I received a portion of the last stimulus payment based on our taxable income for 2018. In my opinion, we should not have been eligible.

Third, the additional unemployment insurance benefit period should be extended but the additional amount should not be increased. While it is clear that the economic impacts of COVID-19 are lasting longer than expected, we should not provide enhanced benefits to the extent that will discourage people from returning to work or seeking employment. There is clear evidence that the past incremental $600/week benefit did so, especially within the hospitality industry.

Fourth, any aid to state and local, and tribal governments should relate to direct and incremental expenses associated with COVID-19. In addition, any direct assistance to school systems to ready their infrastructure for a safe re-opening should be conditioned on returning students to the classroom in a timely manner. I have been teaching in person at the U.S. Naval Academy for five months with appropriate protocols (e.g., wearing masks, social distancing, and proper hygiene). Virtual learning is clearly less effective and is serving to increase our education gaps domestically while reducing our competitiveness internationally.

Applying the above criteria and concepts to the current legislative proposals will result in legislation that has a price tag of about $1.1 trillion. That is considerably more than the Republican senators proposed but significantly less that President Biden and the Democrats are proposing. It would bring total COVID-19 spending authorizations to over $4.6 trillion which is over 20 percent of annual GDP. That should be enough given current GDP growth and employment trends.

Finally, irrespective of what the final legislation looks like, it is clear that current U.S. fiscal and monetary policies are unsustainable. As a result, once we defeat COVID-19, the Congress and the president should create a new and trans-partisan Fiscal Sustainability Commission that would engage the American people in unprecedented ways, and make a set of budget control, tax, spending and investment related recommendations that would achieve a sustainable level of debt/GDP over time. Such recommendations should receive a guaranteed vote in the Congress if at least 2/3 of the commissioner members vote for the package of proposals.

We must do what we can to address the challenges of today while also taking steps to help create a better tomorrow. Hopefully, the Congress and the president will begin to do so in the near future.

David M. Walker is former U.S. Comptroller General and national co-founder of No Labels.