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Despite the best efforts of Rep. Thomas Massie (R–Ky.), the House of Representatives just passed the $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act by a voice vote. The Senate had already approved the bill by a 96–0 vote on Wednesday, so it now goes to President Donald Trump’s desk.

That’s good news for the country’s airlines, which are set to receive roughly $60 billion in financial assistance.

That includes $32 billion in cash grants to air carriers to prevent employee layoffs, with $25 billion of that going to passenger airlines and $4 billion to cargo carriers. The bill also gives $3 billion for contract workers hired by the airlines. Passenger and cargo carriers will also be eligible for another $29 billion in government loans.

Companies that take advantage of these grants and loans are forbidden from laying off workers or cutting pay through September 30 of this year. They are also barred from buying back their own stock. Executive compensation is also capped at 2019 levels.

This is pretty much everything the industry asked for. The CEOs of 10 major air carriers, including Delta, American, and Southwest, sent a letter to congressional leaders on Saturday asking for $58 billion in aid split evenly between grants and loans.

“We applaud the Administration and the U.S. Congress for reaching agreement on bipartisan legislation intended to assist the U.S. airline industry in continuing to make payroll and protect the jobs of hardworking men and women despite devastating impacts to the industry,” declared Airlines for America chief Nicholas E. Calio in a statement after the Senate passed the bill. The unions representing pilots and flight attendants praised the stimulus package as well.

Less pleased is Robert Poole, director of transportation policy at the Reason Foundation (which publishes this website). He argues that airlines do not deserve special treatment.

“The airlines don’t have a significant claim that they are a more vital business than railroads, trucking, all sorts of things that make the economy go,” says Poole. “All the others don’t have a special program.”

This line of criticism has been echoed by a range of bipartisan voices. Reps. Justin Amash (I–Mich.) and Alexandria Ocasio-Cortez (D–New York) have both criticized the CARES Act giving too much away to corporations.

This bipartisan deal is a raw deal for the people. It does far too little for those who need the most help, while providing hundreds of billions in corporate welfare, massively growing government, inhibiting economic adaptation, and widening the gap between the rich and the poor.

— Justin Amash (@justinamash) March 25, 2020

.@AOC notes that 13 ppl died in Elmhurst Hospital in NY last night before ripping into $2 trillion bill. "What did the senate majority fight for? One of the largest corporate bailouts…in American history. Shameful. The greed of that fight is wrong, for crumbs for our families!”

— Yamiche Alcindor (@Yamiche) March 27, 2020

Amash has argued against any direct assistance to corporations, saying all aid should be given as cash subsidies to individuals.

Poole thinks loans to businesses—provided they are given at a reasonable rate of interest—are an appropriate way to help otherwise profitable firms injured by government-enforced closures and quarantines. Loans help “separate the wheat from the chaff,” says Poole, by targeting aid at companies that actually have a chance of paying taxpayers back. Grants, he says, do a poor job of distinguishing between poorly managed companies that would be in financial difficulty anyway and competently run outfits that need only short-term liquidity to ride out the immediate crisis.

The coronavirus outbreak has radically upended American politics to an almost unthinkable degree. The near-unanimous passage of a $2.3 trillion economic assistance bill is evidence of that. But with corporate special interests extracting the lion’s share of benefits coming out of Washington, some things still feel normal.

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Please enjoy the latest edition of Short Circuit, a weekly feature from the Institute for Justice.

New on the Short Circuit podcast: cert petitions, a prison shank public records request, and an arrest for being a smart mouth. Click here for iTunes.

• For years, scientists could serve on EPA advisory committees while also receiving EPA grants. In 2017, the EPA put a stop to that. A group of scientists sues. Scientists: By excluding the many scientists who rely on agency grants, the EPA has ensured that an uneven number of advisory committee members now hail from regulated industries. That violates the Federal Advisory Committee Act. EPA: The courts can’t review any of the scientists’ claims. First Circuit: Yes we can. The case can proceed.
• The feds give out grants to state and local law enforcement under a program called the Edward Byrne Memorial Justice Assistance Grant Program. May the attorney general withhold grants from so-called sanctuary cities and states that refuse to share information with the feds about, or allow them access to, arrested undocumented immigrants? Siding with three other circuits, the First Circuit says no. (The Second Circuit created a split last month.)
• Somerville, Mass. police officer is forced into retirement after the dep’t learns he is nearly blind in one eye. First Circuit: Could be a violation of the Americans with Disabilities Act, among other things. In his 19 years of service, his monocular vision never seemed to have caused a problem, and, though the dep’t claims high-speed pursuits are an essential element of his job, that may or may not be true, and in any case he may be able to safely conduct such pursuits. Back to the district court for more fact-finding.
• Public defenders sue the feds after access to their clients in Brooklyn, N.Y. prison is repeatedly denied on short notice, and, after reports that heating had failed during a period of intense cold, prison officials refuse to provide info on their clients’ well-being. District court: The defenders lack a cause of action under the Sixth Amendment; the right to counsel belongs solely to the accused. Second Circuit: Not so fast. The district court needs to give that claim, plus another about whether prison officials violated Bureau of Prisons policies on attorney-client visits, a closer look.
• Outside the trial of a Baltimore gang leader who allegedly murdered a witness, some of the defendant’s friends hold up their cell phones near a juror. She tells the other jurors, “guys, this is really serious, they’re taking pictures of us.” The judge investigates, thinks nothing happened, and dismisses the worried juror. The remaining jurors convict. Fourth Circuit: Dismissing the worried juror was not enough. The judge must hold a hearing to decide whether other jurors were afraid of gang retaliation—and thus possibly biased against the defendant. Dissent: It was just cell phones.
• Man is shot in the chest while handcuffed in the back seat of a cop car. He dies. Iberia Parish, La. police say he committed suicide and that they must have missed a gun when they patted him down. His family sues, and the parties settle. A judge seals the record and makes the settlement terms confidential. Fifth Circuit: No way. This is a matter of local and national concern, and the record should be opened.
• We may have thrice said police can’t conduct Terry stops to investigate mere misdemeanors, notes the Sixth Circuit. But that was dicta; police officers can absolutely do that.
• Allegation: When the Chicago P.D. conducts investigative stops, officers take people’s ID and won’t return it until after conducting a warrant check. A Fourth Amendment violation? Seventh Circuit: Papiere, bitte.
• Woman is arrested at protest over Ferguson shooting, released without charge. Rather than returning the $30.97 she was carrying, Multnomah County, Ore. officials give her a debit card that has a monthly service fee (imposed five days after release), a fee for using certain ATMs (with incorrect info as to which machines incur fees), and a fee for requesting the balance of the card by check, among others. Debit card company: There are several ways she could have avoided the fees, like having the funds promptly transferred to her bank account. Ninth Circuit: Her federal law, state law, and Takings Clause claims against the company should not have been dismissed.
• Goldwater Institute seeks FDA documents related to the approval of an investigational drug for treating Ebola. FDA: Sorry, all documents related to investigational new drugs are confidential. Ninth Circuit: Not from FOIA, they aren’t.
• San Francisco allows owners of units in multiunit buildings to convert to condominiums if they agree to give a lifetime lease to the current occupant. Property owners apply for conversion but then decide they would rather not give the lifetime lease. They sue instead, alleging a regulatory taking. Ninth Circuit: But they failed to seek a timely exemption from the city, so their claim isn’t final under Williamson County. Dissent: Finality is about knowing how the law applies, not jumping through procedural hoops, and everyone agrees that the city will not waive the lease requirement. The case should go forward.
• Turn to the Eleventh Circuit for a sterling opinion about a famous gold bar that, in the court’s words, “lived its best life” as a museum exhibit until it was stolen by a thief named Jared Goldman. There are Spanish galleons, The Goonies, and a holding that famous gold is worth more than its weight in gold. Which is really too bad for Goldman and another thief paying restitution. But just how much more remains to be seen. The thieves get a re-do of the sentencing court’s valuation, which may have been too high.
• Forty-three years ago, an intellectually disabled man confessed to a murder. But newly tested evidence shows that his DNA was not on the bindings used to tie up the victim. The Georgia Supreme Court says he gets a new trial. (via @ASFleischman)
• Woman pleads guilty to tax fraud in 2011, is sentenced to five years in prison. After getting out of prison on supervised release, she casts a vote in the 2016 election. Yikes! Texas forbids those with felony convictions whose sentences aren’t yet complete from voting, which her ballot said in its form language. She’s convicted of illegal voting, sentenced to five years in prison. Texas Court of Appeals: We can review neither the decision to prosecute nor the statute’s wisdom. Conviction affirmed.
• And in en banc news, the Second Circuit will not reconsider its decision that the First Amendment forbids President Trump from blocking users from the “interactive space” of his Twitter account, over a dissent that contends that the fact that the president uses the account to tweet official tweets should not mean he is barred from blocking those who tweet meanly in response. (We discussed the original panel opinion on the podcast.)
• And in more en banc news the Fifth Circuit will reconsider (on its own motion!) its decision holding that the single director structure of the CFPB was constitutional, a decision that was issued on the exact same day the Supreme Court heard oral arguments on the exact same question.
• And in additional en banc news, the Eleventh Circuit granted rehearing after Judge Newsom wrote a concurrence to his own unanimous panel opinion urging the en banc court to reconsider earlier circuit precedent regarding the interaction of (real) Article III standing and (phony baloney) Fourth Amendment standing.
• And in further en banc news, the Federal Circuit will not reconsider its decision that (1) administrative patent judges were principal officers and thus should have been appointed by the president but that (2) with APJs’ protections against removal revoked, they are converted into inferior officers, and it no longer offends the Constitution that they were appointed by the secretary of commerce. One of the dissenters (from denial of en banc review): We should have given Congress and the agency a chance to fix the issue instead of severing the removal protections.

If the gov’t seizes tens of thousands of dollars from you and then returns all of it after you sue to get it back, did you “substantially prevail”? Last year, the Eleventh Circuit said no, thereby depriving Miladis Salgado, who was raided by the DEA after a bad tip, of the attorney’s fees necessary to make her whole. (Though the feds released all $15k they took from her, a third of it went to her attorney, who took the case on contingency.) Next week, on Friday, April 3, the Supreme Court will consider whether to grant an IJ cert petition arguing, among other things, that Miladis should indeed be awarded her attorney’s fees under the plain terms of the relevant statute. Click here to learn more.

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It’s Brandy v. Villanueva (C.D. Cal.), just filed today by the Second Amendment Foundation, the NRA, the California Gun Rights Foundation, and the Firearms Policy Coalition.

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In 2009, the last time Washington aimed a trillion-dollar firehose at the distressed U.S. economy, the president, a Democrat, repeatedly coupled that act of temporary profligacy with the rhetorical aim of long-term budgetary sobriety.

“One of the central goals of this administration is restoring fiscal responsibility,” Barack Obama asserted back then. “Even as we have had to spend our way out of this recession in the near term, we’ve begun to make the hard choices necessary to get our country on a more stable fiscal footing in the long run.”

There were plenty of reasons for contemporaneous skepticism about Obama’s claims, but even insincere nods toward a presumed virtue can contribute to a mild braking on vice. Policy battles over deficits, debt ceilings, and old-age entitlements dominated national politics through the end of 2013, and not merely because of then-ornery, now-quiescent Tea Party Republicans. Erskine Bowles, after all, was a Democrat.

But the twin rise of President Donald Trump and Sen. Bernie Sanders (I–Vt.), along with the strains of populism they channeled, chased deficit hawks to the despised corners of polite society by 2015. After that, the main questions left were how many zeroes would end up on the federal check when the next crisis inevitably hit.

George W. Bush’s Emergency Economic Stabilization Act of October 2008 came with a $700 billion price tag. Add in Obama’s $833 billion American Recovery and Reinvestmenty Act in February 2009, and we’re talking a bailout/stimulus combo of $1.53 trillion, or $1.84 trillion in 2020 dollars.

By comparison, the bipartisan stimulus that was very temporarily held up by the near-universally despised Rep. Thomas Massie (R–Ky.), totals around $2.3 trillion, according to the bean-counters at the Committee for a Responsible Federal Budget. Even accounting for population increase (the U.S. had 307 million residents in 2009, around 331 million today), that’s an inflation-adjusted per capita increase from around $6,000 11 years ago to $6,950 today.

How much is $2.3 trillion? In nominal terms, it’s the same as the entire federal budget for Fiscal Year 2004. Adjusting for inflation gets you back to the federal government’s $1 trillion outlay for 1987. Inflation and population together take you back to 1974. In short, Congress just approved a bailout/stimulus of $6,950 per person, which is more than the $6,600 per person in constant dollars that the entire federal government spent in Richard Nixon’s final year in office.

The accumulated national debt in 1974 was $475 billion, or around $2.5 trillion in today’s money ($11,700 per U.S. resident). George W. Bush inherited we-owe-yous of $5.67 trillion (which adjusts to $8.52 trillion and $30,200 per capita), and left for Obama a present of $10 trillion ($12 trillion/$39,600). As Trump readies his black sharpie for the rescue package, the debt clock stands at $23.6 trillion ($71,300 per person)—and it was being goosed by trillion-dollar annual deficits even before COVID-19 hit the fan.

And unlike Obama in 2009, Trump doesn’t currently feel the need to even rhetorically hint at future tradeoffs. The president reportedly said in late 2018 about any future fiscal crisis: “Yeah, but I won’t be here.” Add in the likelihood of future bailouts and stimuli, and basically we’re all Modern Monetary Theorists now.

The annual budget deficit, which snapped an entire generation of conservatives into attention when it crossed the $1 trillion threshold a decade ago, is likely to top $2 trillion before the fiscal year is out. The Government Accountability Office and Congressional Budget Office were calling the country’s long-term fiscal outlook “unsustainable” back when the good times were still rolling. Now revenues are taking a massive hit, demand for government service is going through the roof, and the U.S. Mint’s going brrrrr.

Libertarians back in 2008-09 tended to make four types of predictions about the bailout/stimulus. One—that the unpredented swooshing of cash and Federal Reserve intrusion into the economy would trigger long-dormant inflation—did not come to pass, and so many policy enthusiasts have taken that as a cue to ignore libertarians.

But there were three other forward-looking objections to socializing the failures of deep-pocketed losers during the financial crisis: that the ensuing debt load would unduly dampen the eventual recovery, that failing to fix the underlying government distortions that caused malinvestments in the first place would make bailouts an eternally recurring phenomenon, and that papering over problems with money would create new, even more dangerous bubbles.

With today’s Coronavirus Aid, Relief, and Economic Security (CARES) Act, Congress has cemented what we already suspected: that the federal government does not care about learning from directly relevant mistakes it made in the recent past.

There is no more politics of fiscal prudence in America, just a competition to see who can wag the biggest firehose. While the bodies begin to pile up in New York City and elsewhere, Washington has responded with a massive course of experimental economics. May we respond better than rats in a cage.

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