From when the first person fell ill on Dec. 8, 2019, in Wuhan, China, from a mysterious illness now known as the novel coronavirus to the World Health Organization's (WHO) announcement on March 11, that, in fact, the coronavirus outbreak is a pandemic, the United States and the world have been swept up in a global public health and economic catastrophe.
For its part, as early as Jan. 6, the administration, through the Centers for Disease Control and Prevention, issued a travel notice warning that Americans should take precautions if traveling to Wuhan. On Jan. 17, the CDC held a tele-briefing on the emerging virus and began entry screening for travelers returning to the United States from Wuhan. On Jan. 29, the president formed his coronavirus task force to lead the response to the novel coronavirus. And on Jan. 31, the president instituted a travel ban on all foreign nationals who had visited China within the past 14 days.
Following his pledge in the State of the Union address on Feb. 4 "to safeguard our citizens," the president on Feb. 24 asked Congress for emergency funding to bolster the coronavirus response. Congress responded on March 4 by passing a supplemental appropriation in the amount of $7.8 billion to enhance testing, therapeutic treatments, and vaccine development, as well as to provide funds for the CDC and the states for expanded response efforts.
On March 14, the House passed HR6201, the Families First Coronavirus Response Act. This bill provided funding for testing, paid sick leave for impacted American workers, important nutrition assistance for vulnerable Americans, and enhanced funding for states to process and pay unemployment insurance. The Senate passed this measure on March 18, and the president signed it the same day. With the virus outbreak declared a pandemic by the WHO on March 11 and President Trump declaring a national emergency on March 13, Congress began work on HR748, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which passed the Senate on March 25 and the House on March 27.
The CARES Act is an unprecedented $2 trillion public health and economic preservation effort. The novel coronavirus is a Black Swan event, and the CARES Act is an overwhelming response to this extraordinary public health and economic strike to the heart of America. With the capabilities of the Federal Reserve to leverage Congress' appropriation of $500 billion to the Exchange Stabilization Fund (ESF), the CARES act, along with the other related measures, will result in an economic injection of over $6 trillion into the American economy. This represents nearly 30 percent of the annual U.S. gross domestic product (GDP), the measure of economic output.
In the CARES Act, Congress, as it did in the 2008 Troubled Asset Relief Program (TARP) legislation during the global financial crisis, established by law the Congressional Oversight Commission to provide public accountability for the implementation of the extraordinary public funds that have been allocated to the U.S. Treasury and the Board of Governors of the Federal Reserve System. Unlike the Great Recession, this commission is not confronted with the concern over causation of the crisis. In 2008, aid to entities fraught with poor management, faulty compliance oversight, or malevolent financial manipulators was questioned. Here we have none but the Black Swan invader to blame.
Additionally, the CARES Act established a more robust special inspector general at the U.S. Treasury Department, commissioned studies by the Government Accountability Office (GAO) with regular reports to Congress and the public, and increased supplemental appropriations for existing related offices of inspectors general throughout the government, including organizing the Pandemic Response Accountability Committee to, among other activities, "mitigate major risks cutting across program and agency boundaries."
The work of the commission must start with asking the secretary of the Treasury and the chairman of the Board of Governors of the Federal Reserve System to outline their overarching strategy for aiding the economy as it grapples with the shock of covid-19, the surge of cases, and the peak of infection followed by a return to business. Understanding the clear strategy and goals of the use of the ESF and the resulting facilities being implemented and considered will then facilitate the commission's principal work.
In the CARES Act, Congress directed the commission to assess the impact of Treasury's and the Federal Reserve's efforts on the "financial well-being of the people of the United States and the United States economy, financial markets, and financial institutions." Further, the commission is to assess the extent to which information made available on the transactions undertaken by the U.S. Treasury and the Federal Reserve have "contributed to market transparency." Finally, Congress directed the commission to evaluate the effectiveness of the loans, loan guarantees, and investments made by the U.S. Treasury and the Federal Reserve System under the rubric of "minimizing long-term cost to the taxpayers and maximizing the benefits for taxpayers."
Once the leaders of the House and Senate have filled the commission chair--the final appointment--we need to go to work. The CARES Act requires our commission to report to Congress 30 days after the first use of the authorities and every 30 days thereafter. Given that Treasury commenced its use of the ESF on April 9, the commission owes Congress a report on May 9--a deadline that is rapidly approaching.
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U.S. Rep. French Hill represents Arkansas' 2nd District, and is a member of the Congressional Oversight Commission.
Editorial on 05/04/2020