Deficit Spending in Desperate Times
By State Representative Don Vruwink (D-Milton)
These are the opinions of the author, and do not necessarily reflect the views of the organization.
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During debate on our last session day in February, the State Assembly debated two major issues. One: What should we do with the projected state budget surplus? Two: Should we amend the United States Constitution to require the federal government to balance its budget?
The debate on whether to use the budget surplus for an income tax cut or to invest the money in public schools for a property tax cut caused us to remain divided and the funds remain uncommitted.
Because of the coronavirus pandemic, the projected surplus will probably now turn into a deficit, and it might work out best that neither Republicans nor Democrats got their way.
I have always tried to spend my money wisely, and I would like to see government do the same. But as a history teacher, I also know we cannot hamstring federal government to balance its budget during a major crisis if we want the economy to recover quickly.
The federal government has responded with a two trillion dollar coronavirus relief package. This legislation will increase our federal deficit, but at this time needs to be done because it affects so many people and businesses. What we did wrong was to allow our deficit to rise so fast when the economy was good.
The 880-page relief package, called the CARES Act, passed the United States Senate 96-0 and the House of Representatives on a voice vote. The overwhelming majority of money falls into four categories: Help for the health system, for people, for small businesses, and for big businesses.
There is about $180 billion in health-related spending, including $100 billion to help over-stretched hospitals.
According to the Wisconsin Legislative Fiscal Bureau, Wisconsin should expect about $2.2 billion in assistance, with $1.9 billion going to our state government. The state can use some of this federal money to help pay for what Governor Tony Evers has procured: more than 100,000 respirators, 260,000 face masks, 48,000 face shields, 40,000 surgical gowns, and 70,000 pairs of gloves.
For people, the plan provides $260 billion to expand and extend jobless benefits during the pandemic and that for the average worker who lost his/her job, they will receive 100 percent of their salary for up to four months.
For small businesses, the CARES Act provides federal guarantees for bank loans to businesses with fewer than 500 employees, then forgives the portions of the loan spend on payroll, rent, mortages and utilities. This forgiveness only applies for two months, but Congress will probably have to extend it.
Big business will get a $500 billion bail-out funding and $280 billion worth of business tax cuts. What kind of oversight will there be and what conditions will be imposed on bailed-out corporations? All taxpayers should be concerned. We gave big businesses a boost in 2017 when we re-did the tax code, contributing the increasing deficit.
What we do know is that the federal government has to provide relief because Wisconsin will take a huge loss in tax collections and is required to balance its budget.
Unemployment claims are skyrocketing. Some businesses will close their doors and not re-open. Only the federal government has the ability to lift up the economy on a large scale. Our states depend on it.
State Rep. Don Vruwink represents parts of Rock, Walworth, Jefferson, and Dane counties, which include the communities of Whitewater, Milton, Edgerton, Footville, part of the Village of Oregon, and 15 surrounding townships.
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COVID-19: EMPLOYER RESOURCES AND INFORMATION AVAILABLE
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NEWS FROM THE CAPITOL AND AROUND WISCONSIN
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PORK SPENDING AND SPECIAL EXEMPTIONS
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While the federal stimulus legislation will undoubtedly assist families, small business owners, and large industries grappling with government reaction in the wake of COVID-19, only a relative few provisions are making headlines. Among them are the $1,200 cash payments to individuals, expanded unemployment insurance, and forgivable small business relief loans.
But what was included in the package that went largely misreported by the media? A whole lot of pork.
Just to name a few:
- $50 million for the Institute of Museum and Library Services
- $75 million for the Corporation for Public Broadcasting (PBS)
- 88 million for the Peace Corps
- $150 million for the National Endowment for the Arts and the National Endowment for the Humanities
- $1 billion for Amtrak
- $30.8 billion for the Department of Education
- $17 billion "to companies crucial to national security," though no specific companies were named
In one version of the bill, taxpayer dollars would have been used to pay for private union pension debt, and would have pushed tougher emissions standards on the airline industry.
The final bill that passed included provisions that any businesses owned by elected officials, including President Trump and Vice President Mike Pence and all members of Congress, cannot in any way reap any financial benefits from any of the relief programs.
Meanwhile in Wisconsin, a group of more than 30 Republican lawmakers, voiced their concerns over how Governor Evers' "Safer at Home" order granted a special pass for abortion clinics in the State of Wisconsin.
"It is deeply distributing to find out that many lower risk businesses have been shuttered while you have given Wisconsin's abortion clinics special dispensation to remain in operation," the letter said. "We must not allow abortion clinics to put profit ahead of the public welfare and continue with these elective surgical procedures which now are done at a greater risk to the patient as well as our community."
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GOV. EVERS DENIES REQUEST FROM GOP LEADERS TO ALLOW CHURCHES TO OPEN FOR HOLY WEEK SERVICES
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Assembly Republicans called on Governor Tony Evers over the weekend to allow for in-person church services on Easter and Passover.
"Finally, during this crisis," their letter said, "it is more important than ever that we allow Wisconsinites to observe their individual faiths. To that end, we ask that you work with Wisconsin churches and temples to allow them to hold Easter or Passover services, even if it's outside. For many of us, being part of these services will offer much-needed solace during these uncertain times."
Evers promptly denied the request for people to exercise their first amendment right.
"The governor understands that for many Wisconsinites their faith is a source of comfort, especially in these difficult times, but in order to protect the health and safety of all Wisconsinites he will not be rolling back provisions of the Safer at Home order," a spokesperson told reporters.
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EVERS POSTPONES ELECTION, GOP APPEALS TO STATE SUPREME COURT, HIGH COURT REINSTATES ELECTION
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As the tensions mount between Governor Tony Evers and the Republican leadership of the State Legislature, Evers this afternoon made the unprecedented move of suspending in-person voting in tomorrow's election, and again trying to call the legislature into Special Session tomorrow. Evers last week had called the legislature into Special Session on Saturday, but lawmakers adjourned the session within seconds of beginning.
Through Executive Order #74, in-person voting for tomorrow's election, April 7, has been suspended, and moved to June 9th. There is still a possibility that the legislature convenes tomorrow to take up a number of bills proposed by Evers, one of which would allow for absentee voting to continue until May, when the votes would be tallied and results would be released.
In a statement immediately following the Governor's actions, Republicans who control the State Legislature said:
"We are immediately challenging this executive order in the Wisconsin Supreme Court.
"The clerks of this state should stand ready to proceed with the election. The governor's executive order is clearly an unconstitutional overreach.
"This is another last minute flip-flop from the governor on the April 7th election. The governor himself has repeatedly acknowledged he can't move the election. Just last week a federal judge said he did not have the power to cancel the election and Governor Evers doesn't either. Governor Evers can't unilaterally run the state."
UPDATE: At about 5:20PM, the Wisconsin Supreme Court reinstated tomorrow's election in a 4-2 ruling by undoing the emergency order Governor Tony Evers issued earlier in the afternoon. Justice Daniel Kelly abstained from this decision, as he is on the ballot in tomorrow's election.
**This article was originally written immediately following Evers' executive order. Please check for updates with your local elections officials and local media outlets**
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REPUBLICANS SEND EVERS OUTLINE OF PRIORITIES FOR STIMULUS FUNDS
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Among those items were prioritizing the needs of hospitals and healthcare facilities, safeguarding business owners and workers, and assistance to local governments.
"We know that this pandemic is going to bring with it a high price tag. These stimulus dollars will help stem the tide that we know is going to affect our state finances," the letter said.
GOP lawmakers also stated they understand Governor Evers will soon be instructing state departments and agencies to craft their budget requests for the next biennium. That process is set to begin later this year and last until summer. "Tax increases or other economically detrimental policies cannot and should not be an option," they wrote.
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WISCONSIN UNEMPLOYMENT CONTINUES TO SKYROCKET
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The Wisconsin Department of Workforce Development (DWD) has created a website for the public to show the statistics of unemployment claims in Wisconsin during the government's COVID-19 response.
Sunday, 12,136 (2020) vs. 878 (2019)
Monday, 24,664 (2020) vs. 1,248 (2019)
Tuesday 18,480 (2020) vs. 859 (2019)
Wednesday 15,552 (2020) vs. 642 (2019)
Thursday 14,602 (2020) vs. 679 (2019)
Friday 13,155 (2020) vs. 709 (2019)
Saturday 4,637 (2020) vs. 158 (2019)
Total- 103,226 claims, versus the same week last year, which totaled 5,173 claims.
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SUMMARY OF C.A.R.E.S. ACT AND WISCONSIN
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The Legislative Fiscal Bureau released a summary of state funding from the "Coronavirus Aid, Relief, and Economic Security" (CARES) Act.
"It is important to note that the focus of the memorandum is not a comprehensive discussion of all items that potentially impact Wisconsin, but rather a description of the major items based on our review of the federal Act and materials that are available to us," the memo states.
Some key provisions, courtesy of Wheeler:
Elections
- The Act provides Wisconsin with an estimated $7.3 million in federal elections security grant funds. In order to receive the federal grant, there is a 20% ($1.5 million) required state match. Any federal funds unobligated as of December 31, 2020, would be returned to the federal government.
General Fund Taxes
- The Act specifies that required minimum retirement distributions provisions do not apply for calendar year 2020 for certain defined contribution plans, or for an individual retirement plan, as established by federal law. It is estimated this provision would reduce state individual income tax revenues by $34 million in 2019-20 and $41 million in 2020-21. However, it is estimated that income tax revenues will increase after 2020-21.
- The Treasury Department and the IRS announced that the deadline for filing federal income tax returns is extended from April 15, 2020 to July 15, 2020. Wisconsin law provides similar treatment.
- Under the Act, any minimum required contribution for single-employer pension plans which would otherwise be due in calendar year 2020 will be extended to January 1, 20201. This provision is expected to increase income and franchise tax revenues by $12.3 million in 2019-20, and $14.2 million in 2021, and $1.6 million in 2021-22. However, the provision is expected to decrease income and franchise tac revenues by $2.5 million in 2022-23.
Direct Payments to State and Local Governments
- The Act creates the Coronavirus Relief Fund and appropriates $150 billion to state, local, and Tribal governments. The funds are to be used for expenses incurred in response to the public health emergency between March 1 and December 30, 2020.
- The Act further provides that up to 45% of a state’s overall payment can be paid directly to local units of government with populations of at least 500,000.
- Wisconsin is estimated to receive approximately $2.3 billion. Wisconsin has three local units of government that would qualify to receive funds directly: Dane County, Milwaukee County, and the City of Milwaukee. These governments could receive an estimated $360.6 million of the total state payment with the remaining $1.9 billion being paid to state government.
- The funds received under this program may bot be used to fill in revenue gaps caused by slowing state revenue as a result of the public health emergency.
- Wisconsin’s payment will be made as direct aid to the state’s general fund and is expected to be made around April 24, 2020.
Unemployment Insurance Provisions under the CARES Act
- The Act provides that from the date the bill is signed through July 21, 2020, the federal government will provide temporary pandemic unemployment compensation of $600 a week to any worker eligible for state or federal unemployment insurance benefits. The $600 would be paid in addition to and at the same time as regular state UI benefits. The federal supplement would not affect income eligibility for Medicaid or the Children’s Health Insurance Program.
- The Act creates a pandemic unemployment assistance program that expands unemployment insurance coverage to certain workers who are typically not eligible for UI benefits, such as self-employed workers, independent contractors, freelancers, and worker who do not have a sufficient work history to qualify for regular state UI benefits. The temporary federal expansion would be for those workers not eligible for regular or extended benefits under state or federal law, or who have exhausted their regular state UI benefits as long as their unemployment was connected to COVID-19.
- The Act provides for an additional 13 weeks of unemployment benefits to UI claimants that have exhauster regular state UI benefits. Wisconsin allows UI benefits for 26 weeks, so the Act would extend UI benefits to 39 weeks. The additional 13 weeks would be fully federally funded for those states which enter into an agreement with the USDOL.
- For states that currently have federally approved work-share program, like Wisconsin, the Act would provide 100% federally funded UI benefits through December 31, 2020.
- The Act would provide federal funding to states to reimburse nonprofits, government agencies, and Native American tribes for 50% of the costs they incur to pay for UI benefits through December 31, 2020.
Wisconsin Housing and Economic Development Authority
- The Act provides HUD $1.25 billion for tenant-based rental assistance and $1.0 billion for project-based rental assistance to low-income households. FFIS estimates $6.3 million will be provided to state and local public housing authorities in Wisconsin for allocation to low-income tenants.
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WEEKLY MEMBER POLL RESULTS
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If you would like, share your thoughts on the opinion piece?
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I totally agree with John Jacobson!!
100% Agree!
I agree. The government has overreached. Making people aware of the need to be more careful to limit or eliminate exposure was a good idea. Assuming that people aren't going to be responsible is insulting and takes away the freedoms that we enjoy as Americans. Those that are healthy and not at risk should be allowed to continue with life as they use proper precautions to protect others. We're experiencing a dangerous shift in government that is feeling a bit socialist. And that is not and has never been good for anyone.
Isn’t the point of rights that they can’t be disregarded? I like what my senator, Dave Craig said about it... rights are most valuable in a time when they are at risk of being infringed upon.
Well written and I could ot agree more.
I like it and totally agree!!!!
a little extreme.
Some very good points.One of which is how can anything get done in court when they are shut down?
Spot on John. Why are all the counties on "safer at home" orders. 3/4 of the covid 19 cases are in Milwaukee and Madison.
It makes a lot of sense. It's one of those things that you hope isn't going on, but every one of us should be cautious that it can and could be going on. The media is the worst of the worst right now.
I and many people I talk to feel the same way. There is a lot more to this whole virus than what we are being told. I'm tired of even listening to ANY media about it because the narrative seems to have a life of its own. It sickens me to watch the liberal governors make it look like they are not getting the help they need...they are the ones who failed by not planning years ago. I also saw how our federal gov't was sending tons of medical supplies and equipment to even China in February, someone was not doing their job at the State Department.
I understand and agree. Sadly our Government has practiced overreach for a long time.
I don't know what to think.
Spot ON!
Hind sight is 20/20. We will know in about 6 months if this was over reach. For the time being, I am staying in place and making masked for the workers at my local nursing home. As for going to church, go ahead, I've been watching my services on the internet. The church is not held by 4 walls. Thank you for telling me you are a libertarian, that explains a lot.
If anything is just getting ridiculous, it's WPT and this partisan piece. I'm hoping this is just a one time thing and you're done lashing out against liberals. If not, we will have to reconsider our membership.
yes
The largest travesty is not postponing the April 7 election. There was NO VALID REASON for not doing so,
Dead wrong and misinformed. Just more partisan ranting that does not solve problems, just another attempt to polarize people. I've been involved in many conference calls with politicians from both sides of the aisle. Some are working towards solutions and others are attempting to play politics, neither side of the aisle is immune to the latter.
keeping people home may help, but the lack of testing is making the safer at home almost useless. even people who are showing symptoms aren't getting tested when maybe they should. is it flu, covid, cold? this whole situation is so poorly run that i feel it will be ineffective
Great piece! This is total BS and overreach. I get it for the big cities but the rural areas will do just fine.
He is spot on
We have to stay home to prevent the spread of the virus.
Someday, I hope the veil is pulled from Mr Jacobsens eyes..the party line is strong in this one...
Mike has some great questions and I respect his opinion, I also fear the fix is worst then the virus it self, God help us all
I totally agree, I could go on but would take up to much time! Its also is dividing people. My world hasnt stopped, but now Im being questioned by some on the day to day activities on the dairy farm. Many dont understand that I cant shutdown, cattle need to be fed and milked every day!!
I believe we can work and stay safe at the same time
Good questions, I'd like to hear them answered by some of the "experts" and political "leaders"
Very well said!
I am thankful we have someone to put a perspective on what is happening. I agree 100%. How do we fight back against this?
I agree 100% I have had the same reaction from day 1 and people keep truing to tell me I’m in the wrong
AMEN!
I generally agree with your opinions. I am happy to read people asking real questions and searching for data and statistics to back up their opinions.
So, it looks like we are setting a precedent now with the reaction to covid19 and this will happen again each year when cold and flu season starts.
This whole virus thing is overblown. Ridiculous and man are we gonna pay!
You have hit many valid points plus the extraordinary details all in one place!
The author is as dumb as the fake media he is now part of. The Federal Reserve Act created the Federal Reserve Stystem. Perhaps a 5th grade refresher in history would help. There are many online now.
Spot - on John. Thank you!!!
A little harsh. We don't need to feel shamed for wanting to respect the government guidelines on this. I personally feel this may kill my practice short term, long term I hope I can learn, adapt, and prosper.
accurate
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What do you think of the stimulus?
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Just creating more deficate spending. Just where is this money coming from, the salaries of the senate and congress???? Haha
too much pork...again!
Not everyone needs this.
Have to give economy a kick start
PORK PORK and more PORK.
Too much PORK!
It's a lot of money to print is a quick hurry. I cannot believe any party would politicize this and it was done by both sides. The grandstanding was at an all time high.
Those who need help, need it! BUT, shame on those who allowed all the billions of dollars going to PORK, PET PROJECTS!!! WE NEED TERM LIMITS ACROSS THE BOARD, NO MORE CAREER POLITICANS
People who now have no income do need it. It will prevent panic. But if this is too generous to people who don't need it we have unnecessarily added to the deficit.
There are good and bad points, but without some support, our company will be unable to make payroll or pay our bills.
It is one of those things that must be done. I just hope the America I remember in the 60ties & 70ties will find it place as well all work & PRAY together to make the entire country whole.
The BIG GOVERNMENT WING took unfair advantage as usual!
I do question if it isn't a waste of money. My concern was that the Democrates put alot of pet items in it tahat nothning to with virus
Like most bills, there is some good some bad and probably some oversights that will open loopholes. The intentions were good and it is helpful to see some bipartisan work being done. People are worrying about how we are going to pay for it, but nobody has been talking about how we are going to pay for the deficit that we have been running up for years.
appreciate the extra unemployment for those who need it, but the extra bs put in there is riduculous. funding a library?
Another massive uncontrolled waste of money that the US Congress and Senate screwed the future generations with excessive debt.
How are we paying for this?
People need to pay their bills.
good because those at highest risk are getting SOMETHING! Bad because drump is spinning this into another election.
It is over the top and the fraud will be 6 trillion by end
I'm too old to contribute enough to pay back the dept in the long haul.
It's just so much debt!
There will be huge amounts of fraud and waste in the SBA loans.
Seems necessary in the moment but impossible to predict the long term consiquences. Letting the economy crumble would be absolutely terrible for the whole world, however eventually the bulls come due
Over reach on some items,too many pet projects at in the package.
Needed right now, but how it will impact future generations is unknown.
Better than nothing. Hope the bank and CC don't call me 24/7.
I don't see how any of it helps me
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Should Milwaukee and Madison be allowing their residents to NOT show an ID to vote in this election?
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Why the hell do we even talk about this anymore? I don't want people without citizenship voting my tax dollars!!! DUH!
An ID can be shown without touching it. Let's get real. Are we throwing the Constitution out the window over something that has only affected less than one percent of the population?
Don't need cheaters voting.
Let them all vote twice while they are there, maybe three times or why not as many times as they want to?
No ID no vote, boy oh boy, why is this even an issue?
This is stupidity at its finest! I'm also not happy about the fact that many areas are crying that there is NO WAY the election can be held...Evers should have thought about that before his safe at home announcement last week as well.
This is the only way to know if the person and voter are the same person.
Opens the doors for fraudulent activity
The law is the law period!
Here we go again by the liberals wanting this
Listen, you are an eligible voter in your district AND CAN PROVE IT or you dont vote.
I'ts atrocious whats going on there.
It's the law, follow it!
Typical Democrats. They hate ID voting, so why let a catastrophe go to waste.
Watch out for vote fraud i Milw.&Mad.
I don’t even get how this is an issue.
There we go again pulling a pile of "mystery" ballots out at the end to tip the scales! :(
Another way for Madison and Milwaukee to OVER vote.
Come on- you need an ID for a lot of other stuff!
state law needs to be followed. ALWAYS
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What do you think of Gov. Evers' decision to suspend all evictions and foreclosures in Wisconsin?
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Not a landlord, but what ever happened to the idea of saving 6 months of your salary for emergencies and living beneath your means?
If there were problems with these tenants before the virus, they should not be bailed out.
I only support this decision if the government has some plan to help the landlords. This isn't the landlords' fault after all!
Landlords have mortgages too. Didn’t see anything for them in the stimulus.
Probably a good idea. We don't need more homeless.
How does the landlord pay his mortgage? I am a landlord.No they have not
I only support it because Evers has taken away many peoples livelihood and hence their ability to pay
I'm a landlord and have already been told that I will not be receiving rent because I cannot evict. I still have a mortgage to pay.
I am not a landlord, but there are people who also are property managers whose employment hinges on the rents being paid each month, this is a nightmare for those individual, and I know one! Some of the decisions being made are not carefully thought out and are really hurting other people that have means of getting any help from either the feds or state. BIG MESS
I am a landlord and I'm already hearing stories where tenants have quit paying rent, some justified some not, and they flat out admit to the landlord they know the law and their is nothing you can do to kick us out.
As long as there is a limit to this order, I think its good.
We are determined to pay our rent at home and at the business, but if this goes on for more than a month, we will have to prioritize other bills.
Once again choosing winners and lossers.
I hope its for only until we wether the storm
this should be something good landlords will do anyway - don't force landlords to NOT evict dirt bags who have been a problem to stay
I understand why, but I don't think it was properly thought through. There needs to be protection for both sides of that equation.
Landlord here. I am able to support the financial penalty short term, I know some who cant. In the middle on this one. Foreclosures, however, suspend indefinately. To hell with the banks.
low income will abuse in 6 months to a year our homeless problem will be 10 fold and bankruptcy will plug the courts
Both sides are caught up in this and have to adjust accordingly.
Like much of what's happening, seems like overreach by the government
He created this mess he should pay these peoples mortgages since he put them out of work
I get what he is trying to do, but seems like a stretch on governmental authority. Also I don’t believe the gov should have that kind of power
Should have been a tiered approach- what about landlords?
Most banks had done this prior to this announcement.
I'm not but know many. It's all a cluster. Good ones will be Ok, the bad ones it could get ugly.
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