We're In A Deep Recession And McConnell And Congressional Republicans Are About To Turn That Into The First Depression Since 1929

The Senate Republicans-- Mitch McConnell and his cronies-- have decided to let the 4 month long moratorium on evictions during the pandemic lapse-- despite the fact that the pandemic is raging worse than ever. Friday saw +78,009 new one-day cases and 1,141 one day COVID deaths. The pandemic is out of control in Florida, southern California, Texas and Georgia and rapidly and dangerously rising in smaller states like Tennessee, South Carolina, Alabama, Mississippi, Missouri, Wisconsin, Arkansas... McConnell forced the moratorium to end Friday night, knowing full well that it would cause a surge of evictions from coast to coast-- including in Louisville, Lexington, Bowling Green, and Owensboro in his own state. And McConnell planned to see that the ban on evictions would end just as pandemic-related enhanced unemployment benefits also ended. Millions-- literally, millions-- of Americans will lose their homes because of two very wealthy men: Mitch McConnell and Donald Trump, the former having married into wealth and the latter who inherited it. Around 20 million Americans are now unprotected by either federal or state eviction moratoriums. Landlords who were covered by the moratorium-- 12 million households-- must give tenants 30 days notice before they can actually evict them from their homes.

In May, the House passed a rescue package-- enhanced last month by the addition of legislation that would extend the federal eviction ban until March of next year-- and both Sherrod Brown and Elizabeth Warren have introduced similar legislation in the Senate. McConnell and his Republican cronies have adamantly and arrogantly refused to take any of the bills up. On Thursday, on the Senate floor, Sherrod Brown said that "Right now, millions of Americans are in danger of losing their homes. The last thing we need in the middle of a public health crisis is families being turned out on the streets." This is a list of senators whose names should appear on every eviction notice-- along with Trump's-- before November 3:

• Mitch McConnell (R-KY)
• Cory Gardner (R-CO)
• Steve Daines (R-MT)
• Susan Collins (R-ME)
• Thom Tillis (R-NC)
• Joni Ernst (R-IA)
• Martha McSally (R-AZ)
• Lindsey Graham (R-SC)
• Kelly Loeffler (R-GA)
• David Perdue (R-GA)
• Shelley Moore Capito(R-WV)
• John Cornyn (R-TX)
• Dan Sullivan (R-AK)
• Bill Cassidy (R-LA)
• Ben Sasse (R-NE)
• Jim Inhofe (R-OK)
• Cindy Hyde-Smith (R-MS)
• Mike Rounds (R-SD)
• Tom Cotton (R-AR)
• Jim Risch (R-ID)

Neither rent relief nor unemployment relief are priorities for the Republicans; legal immunity for businesses that kill their employees is what drives them. As Annie Lowrey wrote Friday for The Atlantic, "Now We'll Know What The Recession Feels Like-- Congress Is Severing A Lifeline For Millions Of Americans. This week, Congress will decimate the economy, in an unfortunately literal sense: It will cut unemployment-insurance payments to more than 25 million people, more than one in 10 American adults. When it does, the coronavirus recession, already historic in its severity, will become far, far worse. The CARES Act, the coronavirus-relief legislation, included a huge expansion of the unemployment-insurance (UI) program, to include gig workers and freelancers not normally eligible for benefits. It also added a $600-a-week bonus payment to state UI payouts, which generally range from $100 to $400 a week. For four months, these $600-a-week bonus payments have prevented the country’s jobs catastrophe from becoming a catastrophe for family budgets too. They have helped laid-off workers pay their rent, put groceries on the table, and keep the lights on... [T]he $600-a-week payments were a lifeline. Research by the JPMorgan Chase Institute, a think tank housed in the mega-bank, found that the recession and the pandemic cut the spending of employed workers by roughly 10 percent. That makes sense: Many workers had their hours cut, many families spent less as they sheltered in place and worked from home, and many cut back due to fear and uncertainty about the economy. But unemployed workers actually spent a little more than they did before the pandemic hit, due to the additional UI money. The think tank concluded that 'expanded unemployment benefits are acting both as a source of stability for unemployed individuals and also as a form of stimulus to the overall economy.' Congress is now severing that lifeline. The $600-a-week bump functionally expires on Saturday. Even if Congress were to pass an extension now, state UI systems would not be able to program the benefits back in quickly enough to avoid a lapse for millions of recipients. Nor do Republicans want to extend the benefits in full. Concerned about the economy not restarting (a result of the virus, not UI), concerned about the $70-billion-a-month cost of the payments (chump change, given that the economy is collapsing), concerned about disincentivizing work (which, again, does not appear to be happening), Republicans are proposing to cut the payments to just $100 or $200 a week through December, or perhaps to cut them to $300 a week and then extend them only two more months."

Obviously, this kind of a reduction "will hurt families struggling to navigate the dangers of an incurable virus, the disastrous loss of child care and in-person education, and the worst job market in 80 years. Reopening is not leading to a boomerang in economic activity-- indeed, the number of people employed fell from mid-June to mid-July, the Census Bureau reported this week. Jobless workers can’t just go out there and make some money. Now they won’t be able to go out there and spend money either." In other words, what McConnell and his cronies are doing is quite simply "turning a stalled recovery into a double-dip recession. Workers on UI will see their income drop. With no work and no UI, they will spend less, hurting local businesses. Those businesses will purchase less from suppliers, cut their investments, and perhaps lay off employees. This vicious cycle will repeat millions of times, in millions of places across the country. The United States’ economic problems will get worse, not better." Republican politicians are already figuring out how to blame this catastrophe on Biden and the Democratic Congress in the 2022 midterms!

Last week, reporting for the Wall Street Journal, Ruth Simon, Amara Omeokwe and Gwynn Guilford wrote that small businesses are bracing for a prolonged crisis. Many small businesses are shutting down or slashing jobs again after having "brought back staff beginning in mid-April, believing they could get back to business. Now, many are shutting down or slashing jobs again as local officials and consumers pull back and the pandemic shows no signs of abating... [M]any business owners are facing make-or-break challenges. Many may not last. Businesses are entering this phase just as many are exhausting their rescue funds from the federal Paycheck Protection Program, a $670 billion coronavirus stimulus measure launched in April to offer loans to small firms." Billions of the PPP money was stolen for Trump and congressional cronies

An estimated 1.85 million U.S. businesses closed their doors or temporarily suspended operations in the second quarter, according to Oxxford Information Technology Ltd. in Saratoga, N.Y., which tracks roughly 32 million U.S. businesses of all sizes using data from credit bureaus, surveys and government sources.

Raymond Greenhill, Oxxford’s president, forecasts that total losses this year will be greater than in the last recession, when 20%, or roughly 4.5 million businesses, disappeared in just over a year. He added that some of the losses will be offset by new business formation.

Mr. Greenhill said small firms are especially vulnerable now and will account for most of the losses. He said most lack the working capital to survive the downturn or to meet customer needs when the economy recovers. He added that it’s more difficult for young businesses and for other businesses that entered the year in weak financial shape to tap funding from banks and other sources.

As states eased restrictions in May and June, spending at small businesses-- which commonly offer in-person services-- recovered more slowly than in the rest of the economy, according to Womply, a data and technology company with 500,000 small-business customers, mostly in the food and beverage, retail, health and beauty and automotive services sectors.

...Enterprises with fewer than 500 employees accounted for almost half of private-sector employment in 2017, the most-recent data, according to the Census Bureau. Small firms also employ a majority of the workers in industries such as restaurants and personal care that are most affected by capacity restrictions.

“If a small- or medium-sized business becomes insolvent because the economy recovers too slowly, we lose more than just that business. These businesses are the heart of our economy and often embody the work of generations,” Federal Reserve Chairman Jerome Powell said last month during testimony before Congress.

Michael Gibbons, co-owner of three restaurants in Portland, Ore., with his wife, Evelyn, reduced his staff in mid-March to 10 from 97 after shifting to takeout and delivery. The business experimented with outdoor dining on Father’s Day, but scrapped it. “Some guests are just not compliant with safety measures,” he said. Staffing was a hurdle too, as former employees were reluctant to return because they were concerned about their safety and earning more by collecting unemployment benefits, he said, adding that protests in the city didn’t factor in his decision.

Mr. Gibbons said he plans to test outdoor dining again later this month, but also said that Oregon’s uptick in Covid cases is worrisome.

Consumers are pulling back across the country, but spending in small-business categories such as food and beverage, retail, health and beauty has fallen even more sharply in places with rising coronavirus cases, such as Texas, Florida and Arizona, said Michael Stepner, economist at Opportunity Insights, a nonpartisan research institute.

At bars, for example, national spending in mid-July was less than half what it was a year ago, with even worse numbers in Texas, Florida and California, according to Womply.

“It’s hard for small businesses to weather the storm when they don’t know when this will be over,” Mr. Stepner added.

...Nearly one-third of small businesses had less than one month of cash reserves on hand at the end of June, according to the Census Bureau.

Congress sought to allay those strains with PPP funds. The program provided a quick influx of cash to struggling businesses, allowing many of them to retain employees or bring back workers. The loans are generally forgivable if businesses spend a certain share of the funds on payrolls and meet certain other requirements.

The federal government as of July 21 had approved about five million PPP loans, worth a total of $518 billion, according to the Small Business Administration, the agency overseeing the program.

But lawmakers designed the PPP to help owners manage through a V-shaped recovery-- a steep but brief collapse in demand, followed by a swift rebound. Many firms have now burned through the loans, but sales have only barely picked up-- leaving them without funds to keep paying their full pre-pandemic workforce.

On Friday, Treasury Secretary Steven Mnuchin said Congress should consider automatically forgiving PPP loans taken out by the smallest U.S. businesses and offer a second helping of aid to some firms.

...A July survey conducted by the National Federation of Independent Business, a small-business advocacy group, found roughly 22% of PPP loan borrowers have laid off or anticipate having to lay off employees after using their loan, according to the 615 survey respondents.

A renewed downturn in activity could especially affect minority-owned businesses, which have been harder hit by the pandemic and slower to rebound.

Robert Fairlie, an economics professor at the University of California, Santa Cruz, found that 81% of Black-owned businesses and 82% of immigrant-owned businesses that had been up-and-running in February were still operating in June, compared with 95% of white-owned businesses, in a study that analyzed Bureau of Labor Statistics data.

Immigrants and minorities are more likely to be in industries, such as restaurants and personal services, hard hit by social-distancing mandates and economic and health concerns, he said. Even more important, many of these businesses “are really small,” Prof. Fairlie said. “It’s much harder for them to operate during the pandemic, and many lack the financial resources to move forward.”

He said that Black and immigrant business owners tend to hire from their local communities. “If the business owners are struggling and the employees are struggling, it’s a double hit to those communities,” he said.

For some industries, economic pain might not end until the health crisis is fully extinguished.

A survey by Drizly, an online alcohol delivery company, found 13% of respondents said they would return to bars and restaurants again only when a coronavirus vaccine became available. A further 31% said they had no plans to return to bars soon.

Washington Post's Jeff Stein and Erica Werner reported that Mnuchin and the Democrats have said they want a deal by the end of the month, but McConnell said that reaching an agreement could take several weeks, "a timeline that could leave many unemployed Americans severely exposed... Part of the problem stems from a push by administration officials and GOP lawmakers to reduce a $600 weekly payment of enhanced federal unemployment benefits. The White House and the GOP disagree about how to do this, and talks remain highly contentious. They hope to release a proposal early next week... In practice, the coming lapse in the jobless benefit means millions of workers are receiving their last enhanced benefit payment this week... [L]eading Republican lawmakers have argued for cutting the $600-per-week bonus down to $200-per-week, these people said, with one possibility being that this amount slowly phases out over time."

The proposed legislation could come on Monday, a lag that has prompted scorching criticism from congressional Democrats who have been demanding action for months. Congress has not passed any coronavirus relief legislation since approving four bipartisan bills in March and April that pumped around $3 trillion into the economy. McConnell wanted to wait to see how the unemployment benefits and other programs approved in that unprecedented stimulus effort played out before taking additional action.

“This weekend, millions of Americans will lose their unemployment insurance, will be at risk of being evicted from their homes, and could be laid off by state and local government, and there is only one reason: Republicans have been dithering for months while America’s crisis deepens,” House Speaker Nancy Pelosi (D-CA) and Senate Minority Leader Charles E. Schumer (D-NY) said in a joint statement Friday.

If adopted, the new unemployment plan could complicate negotiations with congressional Democrats, who favor extending the $600 weekly payment through January. And it’s unclear if balky state processing systems would have the capacity to implement a complicated new formula on such short notice.

“We’re dealing with the mechanical issues associated with that,” Mnuchin told reporters about the wage replacement plan.

The proposal would, in key respects, meet the conflicting political and economic pressures bearing down on the GOP and White House as the unemployment deadline looms for millions of Americans months away from Election Day.

Senate Republicans and White House officials have been clear that they are not willing to extend the $600-per-week benefit, which conservatives and many business organizations say encourages people to stay home rather than work. Many economists dispute this notion. Senior Republicans have also said they do not want additional federal unemployment benefits to go away entirely, acknowledging that some additional federal help should still be provided to those made jobless during the pandemic. The benefits are politically popular, with a recent Washington Post-ABC News poll finding close to 60 percent of Americans supporting their extension.

...Congressional Democrats and many economists say the current benefit should be extended in full to prevent a crucial stimulus from disappearing from an already wobbly economic recovery.

Given the difficulty of reaching a deal with Democrats before the existing benefits expire, Mnuchin and White House Chief of Staff Mark Meadows on Thursday floated a stand-alone extension of unemployment provisions as part of a package with school funding and a type of lawsuit shield to make it harder for employees to sue their employers if they become sick with the novel coronavirus.

Senior lawmakers in both parties oppose this piecemeal approach, but if they are unable to reach a deal, they might be forced to pass some type of stand-alone benefit extension next week.

In March, lawmakers initially discussed increasing unemployment benefits so they would represent 100 percent of a worker’s prior income. Congress ultimately abandoned the idea in favor of the universal $600 bonus, in part because Labor Secretary Eugene Scalia warned that the nation’s unemployment systems could not handle the complexity of matching every individual’s unemployment benefits to the person’s prior income, according to Sen. Ron Wyden (D-OR), who led those negotiations.

“Scalia said, ‘It can’t be done,’ ” Wyden said in an interview. “We have not seen a single piece of paper describing how this would be administered without the downsides Scalia pointed out months ago.”

Mnuchin acknowledged the technical challenges posed by converting from one system to another when addressing reporters on Thursday. He said the matter was being discussed with state unemployment offices. “Let me just say, different states are in different places,” Mnuchin said. “Some states can implement this quickly. Some states will take time."

Some experts are skeptical. State unemployment offices have been badly overwhelmed by the unprecedented surge in claims, and there were another 1.4 million claims last week. Thousands of the newly jobless have struggled for months to obtain benefits and in some states have camped outside unemployment offices overnight to be ahead in line for help.

The $600-per-week bonus was chosen for its simplicity compared with targeted, individual wage replacement-- but it has proved tremendously difficult for states to implement as the nation’s unemployment rate spiked to 15 percent before falling to 11 percent.