On election night, Democratic campaign consultants may have been wondering, “Where did all these voters come from?” But unless the next Congress sets a legislative course over the next few months, Speaker of the House Nancy Pelosi may soon be wondering, “Where did all the voters go?”
The incoming Biden administration will need to navigate an extremely rough economic path ahead. Congress has struggled to reach an agreement for another round of stimulus to provide emergency relief for families and businesses. Now they must act before the “dark winter” ahead further deteriorates the economic recovery.
Tim Long is a Managing Director in Financial Services. He has deep knowledge of financial services regulation with hands on experience in all bank supervision and policy related matters. He retired from the OCC after a 31 year career in which he oversaw virtually all of the agencys bank supervision and policy units. He has extensive experience in large and complex bank supervision, regional financial institutions and community banking. In his most recent role with the OCC, Tim served as Senior Deputy Comptroller for Bank Supervision Policy and Chief National Bank Examiner. He was a key advisor to the Comptroller and a member of the OCCs Executive Committee. Tim was also a key advisor to the U.S. Department of the Treasury during the recent financial crisis. He served as the Regulatory Council chair of the Troubled Asset Relief Program (TARP) Capital Purchase Program and was a member of the Financial Stability Oversight Council Deputies Committee created under the Dodd-Frank Act. Earlier in his tenure with the OCC, Tim also held the positions of Senior Deputy Comptroller for Midsize/Community Bank Supervision and Deputy Comptroller for Large Bank Supervision, and was the examiner-in-charge of several large, complex national banks.
Don Powell is the former chairman of the Federal Deposit Insurance Corporation, and a longtime bank CEO.
Kevin Abramson is president of Cover Whale, a leading commercial-trucking insurer and fast-growing insurtech.
With more than two decades of underwriting and management experience in the insurance industry, including at Gen Re, Swiss Re and TigerRisk Partners, Abramson prioritizes using technology to address risk and make the world safer. At Cover Whale, his focus is on establishing and executing the company's go-to-market strategy, as well as building internal culture, attracting best-in-class talent and managing relationships with investors, partners, carriers and policyholders.
Abramson holds a Bachelor of Science degree from Villanova University and an MBA from the Wharton School of the University of Pennsylvania.
Gross domestic product, the broadest measure of goods and services produced across the economy, decreased at an annual rate of 32.9 percent in the second quarter of 2020, followed by a surged of 33.1 percent in the third quarter, in part due to earlier rounds of fiscal stimulus when businesses were offered Economic Injury Disaster Loans and forgivable Paycheck Protection Program loans, and individuals received direct payments and extended unemployment benefits.
Economic experts believe the current surge is not enough to stop continued losses incurred by various segments of economy.
“While the strong bounce back in activity from the initial devastation of COVID-19 was heartening, the recovery thus far has been highly uneven, and the path ahead is highly uncertain,” said Federal Reserve Governor Lael Brainard in a speech last month at the Society of Professional Economists annual online conference.
This highly uneven and uncertain bounce indicates the prospect of a K-shaped recovery, where some sectors continue to recover, while others see a steady decline.
The new stimulus package must focus on the sectors facing difficulties ahead to avoid colossal damage and massive layoffs.
According to the U.S. Chamber of Commerce, approximately 4 million small businesses — 13 percent of America’s 31 million smallest employers — have now exhausted their PPP loans, and many face permanent closure without further assistance.
According to the National Restaurant Association, the restaurant industry will lose $240 billion. U.S airlines may be forced to furlough 75,000 pilots, flight attendants, mechanics and other workers by the end of 2020 if Congress doesn’t act.
States and municipalities are now on verge of extreme shortfalls due to declines in tax revenues and rises in additional costs. Local governments that fund and operate public school systems will need more funding. “The average school district will face $1.8 million, or $485 per student, in additional costs for disinfectants, personal protective equipment and other preparations to bring students into classrooms this year,” according to the Association of School Business Officials.
The Federal Reserve’s Survey of Consumer Finances indicates that cash-strained households will continue to suffer as a result of continued unemployment and reduced working hours. The CARES Act did support these households either through direct payments or enhanced unemployment benefits this year, but the financial security of these households will depend on whether unemployment benefits will be extended or supplemented next year.
Therefore, it is imperative for Congress to ensure that the recovery reaches those who have been disproportionately affected. A targeted fiscal support can turn a K-shaped recovery into a broad-based, inclusive recovery to eliminate shortfalls in employment and provide a better outcome overall.
