This article was co-authored with Billy Fleming. He is the Wilks Family Director of the Ian L. McHarg Center at the University of Pennsylvania and a Senior Fellow at Data for Progress.
In the wake of COVID-19, America is officially closed for business. Only three weeks into the shutdown, nearly 17 million people have filed for unemployment. For comparison, the economy shed 9 million jobs during the entire Great Recession. The economy is officially in freefall.
While the costs associated with the pandemic can be quantified, modeled, and mapped in economic and epidemiological terms, they are simply too large to comprehend in any real, humane way. Even in our most optimistic estimates, tens of thousands of Americans will die. Millions will face financial ruin. We are plunging, headlong, into the mostly uncharted waters of economic collapse. And our President and Congressional Republicans--who, mere days ago were downplaying the severity of the crisis--are clearly not steering the ship.
Yet, this economic and institutional collapse may be just the tip of the iceberg. After all, we are facing more than a pandemic and a potential 30+ percent unemployment rate. We are facing a climate crisis that, if left unabated, will continue to ravage our economy, drown our communities, destroy our farms and infrastructure, and devastate lives and livelihoods across the globe. COVID-19 is showing us what cascading catastrophes, unfolding at an exponential pace, can do when severely mismanaged.
It would be easy to let the specter of these crises drive us into despair. But instead, we must marshal the resources and solidarity that this moment engenders, and put them to work rebuilding America’s economy and a better future. In March, we, along with colleagues with expertise in climate and infrastructure policy, sent an open letter to Congress urging them to pass much needed green stimulus funds to address the multiple interconnected crises we are currently facing. It includes a menu of nearly 100 specific provisions aimed at putting tens of millions of Americans back to work, rebuilding our communities and setting us on a short path to a carbon-neutral economy.
While Congress already passed the $2 trillion CARES act, it provides emergency funds aimed at keeping people fed, in their homes, and able to receive medical care if and when they need it.
That was necessary, but it’s not sufficient. To head off the next Great Depression and to avoid a climate catastrophe, Congression is going to need to do more. A lot more.
House Democrats have already started talking about “phase 4” stimulus. That’s a start. But they’re thinking far too small. And most important, they’re failing to ensure that the next stimulus pushes America forward, not back to some imagined, pre-pandemic state.
Rather than simply criticizing these efforts as inadequate, we’ve put forth a bold vision for delivering a permanent, green stimulus as a part of the phase four negotiations.
More specifically, we’re calling for an ambitious Green Stimulus of at least $2 trillion that creates millions of family-sustaining green jobs, lifts standards of living, accelerates a just transition off fossil fuels, ensures a controlling stake for the public in all private sector bailout plans, and helps make our society and economy stronger and more resilient in the face of pandemic, recession, and climate emergency in the years ahead. Rather than a one-time infusion of capital, this stimulus should be automatically renewed at 4% of GDP per year until the economy is fully decarbonized and the unemployment rate is consistently below 3.5%.
The idea of automatically recurring funds has been gaining traction recently, with a groundswell of support for the Sahm rule, which calls for automatic cash payments when recession signals are flashing, to the demand for permanent stimulus at 2% of GDP per year by Paul Krugman. We tend to think of it as an inversion of the automatic spending cuts--often referred to as budget sequestration--locked in by then-President Obama and Congressional Republicans in 2011.
Like sequestration, a recurring stimulus would remove the political challenges of engaging Congress in every financial decision our nation makes. It would also ensure the economy doesn’t experience a lackluster jobless recovery as we witnessed during the Great Recession where political will for larger, recurring stimulus funds evaporated.
As Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, recently said during a 60 Minutes interview, Congress should “err on being generous.” And as anyone familiar with the inability of Congress to tackle any issue, large or small, we must do everything in our power to lock in economic security and stimulus in these phase four and five negotiations.
A recurring green stimulus would make short-term interventions, restructure political and economic power towards workers and communities, and build toward deep long-term change.
Most of the physical work proposed cannot begin immediately. We must focus on halting the spread of deadly illness. However, we can do all the preparatory work now to make green projects “shovel ready.” This includes moving projects from their conceptual phase to construction documentation, pulling the necessary permits, and issuing procurement orders.
All of this work can be done remotely, preparing the nation for a return to in-person work as soon as the WHO and CDC declare it is safe. Not only could it clear a backlog of tens of thousands of stalled projects in the National Parks Service, US Forest Services, and throughout state and local government, it could also catalyze new projects that set us on a short path to deep decarbonization: building a new, national smart grid to deliver clean electricity; building the necessary EV and public transit infrastructure to connect more people to low-carbon, low-cost forms of transportation; etc.
And perhaps most important, it could redirect massive new investments into maintenance and repair work of our existing infrastructure--work that creates 15-20% more jobs per dollar spent than new capital construction and, quite literally, puts stitching our country back together after this pandemic at the top of our priority list.
