When Congress Was Last Called To Help Rescue An Economy In Free Fall
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It's been less than three weeks since Congress passed the largest single financial package in modern history. But lawmakers say more is already needed to fill gaps left by the $2.2 trillion coronavirus relief bill. As Congress works to write the next aid package, NPR's Kelsey Snell looks back at the last time lawmakers were called to help rescue an economy in freefall.
KELSEY SNELL, BYLINE: It's fall 2008, and the economy is collapsing.
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UNIDENTIFIED REPORTER #1: Breaking news here - stocks all around the world are tanking because of the crisis on Wall Street.
UNIDENTIFIED REPORTER #2: The Dow tumbled more than 500 points after two pillars of the street tumbled over the weekend.
SNELL: Congress had to respond somehow and quickly. It passed a $700 billion bank bailout with broad bipartisan support. But that vote and the years of economic legislation that followed caused long-term political consequences. Eric Cantor, a former top Republican leader in the House, helped write that bill. He vividly remembers his reaction the day the chairman of the Federal Reserve tried to explain the depth of the crisis.
ERIC CANTOR: What do you mean that the banking system wouldn't collapse - wouldn't work? And one of the responses was, well, your constituents can wake up tomorrow morning and go to the ATM, and there'll be no cash.
SNELL: The sudden onset and depth of the crisis then mirrored the fears in Congress today. The collapse a decade ago started with big banks and so did the bailout. This public health crisis is much bigger and much more broadly felt. But these two crises share an unprecedented demand on Congress to figure out how to help. Like the $2 trillion relief package Congress passed last month, the first attempt in 2008 wasn't enough to fix the economy. Democrats took control of Congress three months later and immediately got to work on a massive stimulus with a newly elected President Obama.
TOM PERRIELLO: The scale of the problem and the urgency required us to do a lot of different things at once. The federal government actually has a limited number of ways to get out resources to people quickly.
SNELL: That's Tom Perriello, a former Democratic congressman from Virginia. Doing things fast doesn't come naturally to Congress. Economists warn the country was on the precipice of a depression, so Congress rushed. And by the time the $787 billion stimulus was done, they had to pass it without a single Republican vote.
PHIL SCHILIRO: So the normal legislative process - the normal process of holding hearings just wasn't possible.
SNELL: That's Phil Schiliro. He was President Obama's director of legislative affairs. In the rush, some members voted without even reading the bill, and then they shifted to reforming the nation's health care system. Congress was forced to move quickly, but it took time for all of the changes to show up for most people.
SCHILIRO: One of the fundamental problems was the economy didn't recover in time. There were deep-seated problems; it was going to take a while.
SNELL: Schiliro says jobs did come back, and the recovery lasted basically until last month. But politics moved faster. Perriello lost his seat after one term in a massive wave election in 2010. Democrats lost 63 seats and control of the House. Cantor's bank bailout vote, which he defends today, was used against him when he lost a primary challenge in 2014. Perriello says responding to the immediate crisis was more important than the political fallout.
PERRIELLO: The most important thing is to know, whatever happens in the next election, that you did what was right - that you stepped up and used the power that you have in Congress to try to help people.
SNELL: There's no way to know when the damage from the virus will fade, but Congress will learn if their actions went far enough when the country votes in November.
Kelsey Snell, NPR News, Washington.
(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.