Why Republicans are embracing bailouts
“This is not like the financial meltdown, where you had banks that made bad decisions and asked the government to bail them out,” said Sen. Marco Rubio (R-Fla.). “We are basically telling people not to go out, not to spend money at these stores, and in some jurisdictions, not go to work. … It’s an unprecedented challenge.”
Republicans are eager to make that argument as they embark on a wide-ranging rescue mission and fend off charges that they’re ditching their free-market principles. Senior administration officials have been careful not to refer to President Donald Trump’s plan as a “bailout” — a tacit acknowledgement that the proposal could spark a revolt while being politically toxic for the GOP down the road. Some outside conservative groups are already urging lawmakers on Capitol Hill to reject direct aid for industries.
But at least for now, Republicans are mostly brushing aside long-held cost concerns in order to salvage the economy — and perhaps Trump’s reelection, as well as their own.
“The term ‘bailout’ does give everyone pause, and justifiably so,” said Rep. Andy Biggs (R-Ariz.), chairman of the conservative House Freedom Caucus.
But even Biggs, who voted against the House’s $100 billion coronavirus bill last week, didn’t entirely shut the door on supporting the next round of stimulus. “We do want this country to be strong,” he said. “You have to consider future generations.”
Particularly in the face of an extraordinary public health crisis — which Sen. John Boozman (R-Ark.) compared to World War II — lawmakers are calculating that there is a far greater risk if they don’t take aggressive steps to protect the economy.
Treasury Secretary Steven Mnuchin on Tuesday pitched Senate Republicans on what’s likely to be a $1 trillion package, with around $500 billion in direct cash payments for individuals as well as money for emergency loans for small businesses hit by the economic slowdown and assistance for the airline industry.
GOP Rep. Peter King of New York, who backed the 2008 financial industry rescue, said he is inclined to support whatever Trump and GOP leadership come up with, even if it’s not ideal.
“In ordinary times, some would have those concerns,” about the cost and the deficit, King said. But, he added, “in times of crisis, you can’t let the perfect be the enemy of the good.”
Trump’s strong support for a stimulus package could also provide Republicans with some much-needed political cover — especially if it means resuscitating the economy, which was supposed to be the GOP’s crown jewel in the 2020 elections.
Last Friday, the Capitol was at a standstill waiting for Trump to tweet his support for the House’s coronavirus relief bill, which expands access to free testing, provides $1 billion in food aid and extends sick leave benefits to vulnerable Americans. When Trump finally did, all but 40 Republicans ended up voting for the legislation.
But some GOP lawmakers were frustrated that they voted in the early hours of Saturday morning on a bill they didn’t have time to fully read. And the legislation was so hastily written that the chamber had to pass 90 pages of “technical corrections” on Monday.
House Minority Leader Kevin McCarthy (R-Calif.) and Mnuchin sought to alleviate some concerns during a conference call with ranking members and GOP caucus leaders on Tuesday during which they walked lawmakers through the changes and vowed to be more inclusive in the next phase of their economic response. But Republicans also recognize the sense of urgency and the need to act fast.
“Would you like to slow it down? Yeah, we’re talking about a lot of money here. But we’re also talking about an unprecedented challenge to the economy,” said Rep. Tom Cole of Oklahoma, the top Republican on the House Rules Committee, who was on the call. “The sheer speed with how this virus spreads requires a speedy response.”
“Having lived through [Troubled Asset Relief Program] calls and TARP meetings,” Cole added, “there’s just not been the level of acrimony.”
The GOP’s early embrace of a pricey stimulus package caps a transformation of the party that has been three years in the making. Trump has kept a firm grip on the GOP, overseeing a massive tax cut and putting the deficit on track to surpass $1 trillion.
There are still a number of fiscal hawks and conservative hard-liners who have pushed back against deficit-busting bills — and they are certain to raise concerns during the coming debate.
Sen. Rand Paul (R-Ky.) is vowing to offer an amendment to cut spending from other programs for every dollar added in stimulus spending, while the Club for Growth and other conservative groups backed by megadonor Charles Koch are urging lawmakers to reject any tax-payer funded bailouts that provide direct relief to industries hit by the coronavirus.
Rep. Louie Gohmert (R-Texas) even threatened to hold up quick passage of the House’s revised coronavirus bill, though he eventually backed off. Still, his antics sparked some concern among Republicans that the party’s right flank will get in Trump’s ear and sour him on the idea of a massive economic relief plan.
“What we do have to worry about is Louie Gohmert, a few others, getting to Fox News,” said one GOP lawmaker. “If momentum [against it] builds up on its own, the president may turn on it.”
But Senate Majority Leader Mitch McConnell is undeterred, vowing to press ahead with the stimulus package at “warp speed.”
“These are not ordinary times. This is not an ordinary situation, the Kentucky Republican told reporters. “So it requires extraordinary measures.”
John Bresnahan contributed to this report.