Atlanta, April 4, 2020 —Allen Buckley, a fiscal conservative independent candidate in the special election race for the U.S. Senate seat currently held by Kelly Loeffler, has said the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), that passed the U.S. Senate 96-0, is a poorly crafted, financially irresponsible, piece of legislation in too many ways.
On March 27th, President Donald Trump signed into law the CARES Act. Among other things, the law provides most adults with $1,200, regardless of need or ability to spend. It also provides for completely forgivable loans to small to mid-sized businesses for payment of wages and salaries, rent, interest and utilities for eight weeks, as long as payroll is kept relatively in line with pre-pandemic practices. Virtually any business with 500 or less employees that certifies that “the uncertainty of current economic conditions makes necessary the loan request to support the ongoing operations” of the business qualifies. All professional firms qualify, regardless of the wealth of the owners. It also provides for federal increases to unemployment compensation of $600 per week, carried out for 39 weeks, including for individuals who may have made less than $600 per week. And, it defers the due date to pay 2020 Social Security tax owed by employers that don’t receive the forgivable loans until the end of 2021 (for half) and the end of 2022 (for the other half). Social Security is a “PAYGO” system, such that current workers’ paychecks are the source of benefits. And, Social Security and Medicare taxes make up between 30-40 percent of federal revenue. While the estimated cost of the CARES Act is $2.14 trillion, during the signing ceremony, (Republican) President Trump bragged that the law was the largest bail-out package ever enacted, and that the total benefits paid could grow to be $6.2 trillion. An additional major bail-out package is expected from Congress.
For years, the CDC had been warning of a possible pandemic, for which it would not be able to produce an effective cure on a timely basis. Few listened. Similarly, for years, the GAO and CBO, along with numerous private sector financial groups, have been warning of a looming fiscal crisis due to the mounting federal debt. In 2007, when total federal debt was less than $9 trillion, the GAO said: “GAO’s current long-term simulations continue to show ever larger deficits resulting in a federal debt burden that ultimately spirals out of control.” Total debt is now (pre-CARES Act) roughly $23.5 trillion. Annual federal revenue has never exceeded $3.5 trillion. Deficits have been run since the turn of the century. For 2019, when unemployment was at a 50-year low, the deficit was approximately $1 trillion. Larry Kudlow recently stated he expects the CARES Act to drive total federal debt to exceed $25 trillion.
Buckley said: “Coronavirus is a very serious matter that deserves a very significant financial outlay. Like a potential federal debt crisis, we were warned about the possibility of such a pandemic for years. The CARES Act is a poorly crafted, financially irresponsible, piece of legislation. A colleague of mine told me his mid-sized law firm anticipates receiving $3.5 million in benefits. I know the lawyers in his firm do, and have done, very well. Professional practices generally shouldn’t be eligible. Many people who lose employment or work will make more than they made while working, and the 39 month term of benefit payments will cause many to try to extend benefits rather than work, once the pandemic subsides. These provisions should have been crafted to help, while incentivizing people to return to work soon after the pandemic subsides. Many people, including many seniors, don’t need a $1,200 check, particularly when they’ve been advised not to go outside. They’ll do little shopping. These checks should have been made available to those who requested them and attested to low income and net worth showing immediate financial need. Many small to mid-sized businesses with little change in business will get a free ride for eight weeks of their fixed costs. They should need to demonstrate a significant recent reduction in business. Simply put, the CARES Act wastes money, and invites quantitative easing (i.e. QE—money printing) on a large scale basis. Had we balanced the budget every year after 2009 when our nation wasn’t in recession, as I’ve advocated, total federal debt would be approximately $8 trillion less, and the situation would be very manageable from a financial and monetary perspective. We didn’t do so.”
Mr. Buckley’s “Save Tomorrow” campaign is about living for today and tomorrow, instead of living for today to the detriment of tomorrow. The focus is on doing things to make tomorrow as good as or even better than today, by acting now to address the nation’s financial challenges and confronting global warming in a practical way.
Buckley ran against Johnny Isakson in 2016 as the Libertarian Party’s candidate. In an October 20, 2016 poll by The Atlanta Journal-Constitution, he drew 11 percent of the vote.
Mr. Buckley is an attorney/CPA. He can be reached for comment at (404) 610-1936. Mr. Buckley’s campaign website is www.buckleyforsenate.org.