As Congress debates an economic stimulus, where should the money be spent?

by Ken Kimmel, President of the Union of Concerned Scientists


Highlights

  • Current situation: Federal government response to COVID-19: In Washington DC a bi-partisan effort to help the country cope with COVID-19 is underway. So far, one immediate emergency bill appropriated approximately $8 billion designed to treat and prevent the virus. A second bill has also passed that provides for extended sick leave and free testing for the virus. A third bill is also being debated to stimulate the economy by providing cash to many who are losing or will lose their jobs and helping states to cope with growing unemployment rolls.
  • A unique moment: Estimates of unemployment may be as high as 30%. It seems likely that these initial bills will fall far short of the stimulus needed to prevent an economic freefall. And so there will be pressure to do more to stimulate the economy, create jobs and consumer demand, either through direct government expenditures, tax credits, loans, or other means. This means the government will be directly and massively guiding the direction of the economy—a circumstance that may not happen again for years or decades.
  • The COVID-19 stimulus will likely not include the funds for the entire mobilization needed to address climate change. However, the stimulus can be a substantial down payment for the transition to a clean energy economy
  • Cleantech woes related to COVID-19: The solar industry is projecting to lose as much as thirty percent volume with job losses as high as 120,000 (almost half their workforce), and the wind industry estimates that 35,000 jobs and $43 billion in investments are at risk. Electric vehicles, which were starting to finally catch on, may stall as consumers hesitate to pay the higher up-front costs for an EV. These industries had robust job growth prior to the pandemic and supported the direction the world needs to move to avoid catastrophic climate tipping points. Thus, any government stimulus needs to support these industries, while moving away from fossil fuels.
  • Sustainable agriculture issues: Sustainable practices that build soil health and resilience to climate impacts are proving profitable for farmers and their communities. Thus, if the economic stimulus includes funds for farmers, the focus should be on incentivizing farmers to adopt sustainable practices. Once they take hold, they will flourish, but they need an economic nudge now.
  • Requirements of a bailout: In any bailout of industries, there must be strings attached to protect the public interest. For example, any bailout of the airlines should include a requirement to decarbonize over time.
  • Costs of a bailout: It is immoral to place the entire cost of this stimulus on future generations. This stimulus will be financed mainly through debt, but there are ways of paying for some of it now. For example, a concerted effort can be made to cut federal spending on things we don’t need and which do not generate jobs or stimulate the economy. A poster child example of this is the proposed trillion-dollar plan to rebuild the US nuclear arsenal.
  • Moving fast and in the public interest: COVID-19 is rapidly accelerating the usual timetable of congressional legislation. It is likely that in the next few weeks Congress will approve trillions of dollars in new spending. There will not be time for hearings, expert testimony, and vigorous public debate. Lawmakers must focus on the long-term direction of the economy, placing public interest conditions on bailouts to industries, and refraining from unnecessary spending to keep the debt in check.

The Climate Center’s Climate-Safe California campaign is a powerful solution to the climate crisis. Climate experts have called this a unique, bold, urgently needed and comprehensive campaign that will catalyze similar efforts in other states, the nation, and the world. Endorse the Climate-Safe California platform here.


Read more: https://blog.ucsusa.org/ken-kimmell/covid-19-coronavirus-congress-economic-stimulus?utm_source=twitter&utm_medium=social&utm_campaign=tw

Stacey Meinzen
0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.