How should we spend future pandemic relief money? - Marketplace

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Senate Republicans are willing to spend around $500 billion on coronavirus relief; House Democrats prefer $2 trillion; a bipartisan group of senators has proposed spending $900 billion. Each has a different recipe for relief.

We asked a few economists what line items ought to go into any relief package.

Everyone seems to agree on fighting the virus.

“We need to make sure we have enough funding to deal with public health measures to combat the virus,” said Michael Strain, a labor economist with the American Enterprise Institute. Funding for public health and vaccination is in all the proposals on the table — Democratic, Republican, bipartisan.

Extended unemployment benefits, which expire at the end of the December, were top of mind for Vincent Deluard, macrostrategist for financial services group StoneX.

“The single biggest item down the list is unemployment benefits, because this is something where people are gonna really suffer,” he said.

Senate Republicans plan would extend some unemployment aid for a month. Democrats haven’t released details, but previous plans wanted to extend for longer. The bipartisan plan would shell out an extra $300 in unemployment per week for four months.

Constance Hunter, chief economist at KPMG, has got the business angle. “There should be grants to businesses, not loans. There are many businesses that really need fiscal assistance, or they’re not gonna be there when we start having the vaccine widely distributed,” she said.

Grants should also go to people, said Justin Wolfers, professor of economics at the University of Michigan.

“Unlike previous recessions, we should really design the package around income support for the millions of people who are either without work or on incredibly reduced hours,” he said.

The Republican and bipartisan plans don’t include stimulus checks and don’t appear to say anything about grants to businesses, but they would add $300 billion to the Paycheck Protection Program. Democrats have been favorable to more stimulus checks in the past. Wolfers and Democrats also want money for state and local governments, something which Chris Edwards, economist at the CATO Institute, does not want.

“I’m particularly against bailout money for state and local governments,” he said. “State and local government revenues are actually pretty solid.”

Aid to state and local governments is and has been a point of contention between Democrats and Republicans, as has the size of any coronavirus relief package. So far, the compromise everyone has made has been to do nothing. Only in Washington is that a compromise.

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Are states ready to roll out COVID-19 vaccines?

Claire Hannan, executive director of the nonprofit Association of Immunization Managers, which represents state health officials, said states have been making good progress in their preparations. And we could have several vaccines pretty soon. But states still need more funding, she said. Hannan doesn’t think a lack of additional funding would hold up distribution initially, but it could cause problems down the road. “It’s really worrisome that Congress may not pass funding or that there’s information circulating saying that states don’t need additional funding,” she said.

How is the service industry dealing with the return of coronavirus restrictions?

Without another round of something like the Paycheck Protection Program, which kept a lot of businesses afloat during the pandemic’s early stages, the outlook is bleak for places like restaurants. Some in the San Francisco Bay Area, for example, only got one week of indoor dining back before cases rose and restrictions went back into effect. Restaurant owners are revamping their business models in an effort to survive while waiting to see if they’ll be able to get more aid.

How are hospitals handling the nationwide surge in COVID-19 cases?

As the pandemic surges and more medical professionals themselves are coming down with COVID, nearly 1 in 5 hospitals in the country report having a critical shortage of staff, according to data from the Department of Health and Human Services. One of the knock-on effects of staff shortages is that people who have other medical needs are being asked to wait.