The GOP’s small-government orthodoxy is the worst remedy for a response to the coronavirus.
The Republicans have lost the debate over the role government should play in people’s lives, and the coronavirus pandemic has accelerated that demise.
For decades, GOP logic has gone something like this:
- Government is bad
- We should cut government funding because government is bad
- Due to those cuts, government agencies don’t run efficiently
- GOP lawmaker points to those inefficiencies and says: “See! Government doesn’t work!”
It’s a convenient self-fulfilling prophecy, but the coronavirus pandemic has proven how short-sighted this “logical reasoning” is.
Problems at the Small Business Administration
Take the Small Business Administration (SBA), their goal is to help small businesses stay afloat during this shutdown. Through the CARES Act passed at the end of March, the SBA was given $349 billion to provide loans to small businesses. The program was designed to help them through the pandemic while keeping their employees on the payroll.
That was not enough money.
The program ran out of funds in less than two weeks, prompting Congress to negotiate another deal wasting precious time. Instead of feeling assured that they could pay their employees and bills, small businesses had to wait for Congress.
And government agencies like the SBA are not set up for quick emergency action like this. There were website crashes and $1 billion in loans were given to publicly traded companies, several of which have over 500 employees and executives making $2 million a year. It was commendable that the SBA got the program up and running in the short time that they did. But these are not the problems you want to see when the loan program designed to keep small businesses afloat during the coronavirus pandemic is rolled out.
The answers to these issues are more funding and more staff, or at least those would be the answers from a somewhat competent White House. But in his proposed FY 2021 budget, Donald Trump wants to cut the SBA by 25%, and has proposed cuts in previous years as well.
Gutting the IRS
For decades, the Republican Party has pushed to defund and downsize the Internal Revenue Service (IRS) and with dire consequences: veteran staff members retiring quickly, a dramatic drop in audits of corporations and wealthy Americans, and billions of dollars in crucial tax revenue lost, (for a comprehensive look at the gutting of the IRS, read ProPublica’s in-depth journalism on the subject.)
I don’t think that cuts to the budgets of the IRS or the SBA were the single explanation for these issues. But those cuts exasperated the problem. Budget cuts mean fewer resources and staff for agencies, which means less bandwidth to respond quickly to a national crisis.
Don’t worry about deficits right now. Throw money at everyone.
The Federal Government has the tools to fight this economic catastrophe, the strongest being deficit spending. But the GOP is now worried that government spending is out of control. I’m sure they would like everyone to forget that in 2017 they passed a major tax cut for the wealthy and corporations that ballooned the deficit. But this is not the time to stop spending. When you are looking a great depression in the eyes, you need to be throwing money out of helicopters. Government agencies like the SBA and the IRS need more resources and staff to effectively respond to a crisis. But as I’ve pointed out, that runs counter to the GOP’s strict small-government ideology.
Grover Norquist, a conservative anti-tax activist (if there is such a thing) famously said, “I don’t want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub.” Norquist, most likely, will never see his dream of killing government become a reality, but imagine if he did. The GOP likes to say they are for smaller government. That’s not true. They are for weaker government. Their plan is to make it so weak that one day they can finish it off altogether.
If they ever achieved their goal, Americans would pay a hefty price.