Divided Government Will Doom the Economy

Divided Government Will Doom the Economy

As Washington dithers, the country will suffer.

Congress has failed since the spring to pass much-needed additional economic stimulus. The ousted Trump administration has lost interest in pushing for a new bill. With just a few working weeks left in their lame-duck session, House Democrats want a $2 trillion to $3 trillion measure, while Senate Republicans are recommending a skinnier $500 billion to $650 billion measure. The two sides might fail to come to an agreement, and once President-elect Joe Biden is inaugurated, obstructionist Republicans will have even less incentive to get a deal done.

As Washington dithers, the country will suffer. The novel coronavirus, fueled by indoor transfer over the winter holidays, will continue to maim and kill. States and cities will buckle under their budget gaps, and slash more jobs and social services. Millions of Americans will lose work. And the country’s unemployment-insurance expansion, student-loan-deferral program, and eviction moratoriums will expire, leaving the poor families bearing the brunt of this recession even more vulnerable. A double dip is possible, given that the recovery is already slowing down.

None of this might come to pass, of course. House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell might work out a middle-of-the-road stimulus measure, helping to speed the recovery. Democrats might take both of the Georgia seats in the January runoff, thus clinching control of the Senate. Biden—a congressional veteran who is legitimately liked on both sides of the aisle and has a history of bipartisan dealmaking—might break the logjam. The economy might recover faster than expected without additional support from Washington, as businesses adjust and reopen.