Welcome to the Christmas Day edition of the podcast. Lawmakers in Washington were hard at work earlier this week passing a whole bucketload of gifts this holiday season. Governments around the world are grappling with the economic impact of the pandemic. The last financial aid spending was passed on March 27, just a couple of weeks into the pandemic. Legislative gridlock resulted in nearly 9 months to the day of time between the two bills. Back in March, the expectation was that the economic impact, while deep would last only a few weeks. Many of those provisions had a horizon of only a few weeks. The PPP program was only designed to provide 8 weeks of financial assistance. Now, nearly 9 months later, the businesses that are still left standing are hoping they’ll survive this next wave.
In the latest bill, money is being handed out. But, it’s not a level playing field. Money is being printed and handed out like candy to the myriad of special interest groups. Every time there is an appropriation of funds, the various special interest groups advance their pet project into the legislation. The results are evident in the latest $900 billion spending bill.
If you read the 5593 page document, you’ll find that there are all kinds of holiday gifts buried in those pages.
Let’s be clear, this bill was sold as a stimulus bill to help a population hemorrhaging from the economic damage of the pandemic.
As you might hope, there is $284B allocated to a second phase of the PPP. This second phase will allow you to get 2.5 months of payroll in the form of a forgivable loan as long as 60% of the money is spent on salaries. You need to have a reduction of 25% in revenue compared with the comparable quarter in 2019 in order to qualify. If you are in the food or accommodation business which have been particularly hard hit, then you might be eligible for 3.5 months of payroll in the form of a forgivable loan. This is directly in the line with what we would expect this legislation to be all about.
Needless to say, I was surprised to see $85,505,000 earmarked for Cambodia to strengthen regional security and stability, particularly regarding territorial disputes in the South China Sea and the enforcement of international sanctions against North Korea. It’s also to assert its sovereignty against interference by the PRC. It’s also to cease violence and harassment against civil society and political opposition in Cambodia.
Under the banner of International Narcotics Control and Law Enforcement, there is a provision for 134,950,000 to four states in Burma. These funds are not actually for International Narcotics Control and law enforcement. They’re available for programs to promote ethnic and religious tolerance and to combat gender based violence in 4 states in Burma. Why they have singled out ethnic and religious tolerance in 4 states, and not all 14 states in Burma, under the banner of Narcotics control in a Covid-19 assistance bill is a little confusing to me.
Another $45 million of taxpayer money (page 1,491) will be awarded to key government officials in Central America– places like El Salvador, Honduras, and Guatemala– in order to “combat corruption”. You can’t make this stuff up– they are giving money to corrupt officials to fund anti-corruption programs. It’s brilliant!
We have $10 million on page 1,486 going to the government of Pakistan SPECIFICALLY for gender studies programs.
The authors of the bill are pretty crafty. By bundling all kinds of unrelated spending under an emergency spending bill, it’s virtually impossible for lawmakers to vote against these provisions that have nothing to do with the main core of the intent for the spending.