Federal Reserve and Congress Take Different Approaches to Aid

Federal Reserve and Congress Take Different Approaches to Aid

(UnitedVoice.com) – COVID-19 continues to spread and worries about the economic impact become reality. The Federal Reserve and federal government are working to stabilize the nation in the midst of this outbreak. They’re trying to secure markets and ensure that working Americans aren’t financially devastated.

On Thursday, coronavirus fears caused the Dow, Nasdaq, and S&P to take a dive south. The Dow had the worst day on record since the market collapse in 1997, dropping nearly 2,000 points. As a result, the Federal Reserve announced it would bring back quantitative easing and inject $1.5 trillion in new money into markets. However, some think the money could be better spent elsewhere.

AOC Responds to the Federal Reserve’s Intervention

Democratic socialist Rep. Alexandria Ocasio-Cortez (D-NY) responded to the Federal Reserve’s pumping of new money into the economy.

In a tweet late Thursday afternoon, AOC said:

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https://twitter.com/AOC/status/1238195671540338691?s=20

Since taking office in January 2018, AOC has been adamant about the need for student loan debt relief. According to different estimates, the total cost to eliminate student loan debt is approximately $1.6 trillion – almost the same amount the Federal Reserve injected into the markets to try and stabilize them on Thursday.

In her tweet, AOC did not call for eliminating student loan debt. She simply made a comparison about helping markets versus helping working people during the crisis.

What she actually called for was two things she believes could help working American’s immediately during this time of crisis:

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  1. Pause student loan payments
  2. Mortgage and rent relief

It’s not clear if she was referring to helping just those directly impacted by the crisis or the entire working-class population.

In addition, Congress, House Speaker Nancy Pelosi (D-CA) and Treasury Secretary Steve Mnuchin have been working on an aid package for those affected by COVID-19. Congress included AOC’s suggestions on how to provide temporary relief to those who could miss work specifically due to COVID-19. Included in that was a provision to replace lost wages for ill hourly workers.

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On Thursday night, there was no agreement, but the two sides expect to reach a deal sometime on Friday. If so, a bill could be on the House floor on Friday and to the Senate early next week.

Due to the evolving nature of COVID-19 and too many unknowns, there isn’t a way to estimate the cost of legislation to taxpayers. However, the short-term concern lawmakers have is the economic impact the virus could have on working families and their ability to pay essential bills. Rent, mortgage, utilities, and food could be difficult to deal with if they are either quarantined or laid off by their employer.

Stay tuned to see how the bill changes as the legislation is negotiated inside Congress and with Mnuchin. Hopefully, it will help the people who need it most.

By Don Purdum, Freelance Contributor

Copyright 2020, UnitedVoice.com

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