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Your guide to what the 2024 US election means for Washington and the world
The writer is US senator for Massachusetts and the top Democrat on the Senate committee on banking
Since President Donald Trump announced his massive tariffs, the stock market has experienced its biggest decline since the start of the Covid-19 pandemic. Economic experts are warning that a recession is likely. Consumer confidence has tumbled to levels not seen since the height of the pandemic. Some big companies and local businesses are already handing out pink slips. Tens of millions of Americans are anxiously wondering what will happen to their jobs, their retirement savings and their futures.
But, unlike 2020, today’s unfolding turmoil is not triggered by a deadly virus; instead, this crisis has been created by the president of the United States. The economy is tumbling because Trump slapped new tariffs on pretty much every country in the world for products they sell to the US — with little rhyme or reason. His tariffs won’t promote jobs and industry at home. They won’t build resilient supply chains. And they definitely won’t level the playing field for American workers. Instead, Trump’s plan will fracture supply chains, halt new investments and drive up unemployment. As Federal Reserve chair Jay Powell noted, inflation will probably rise, and that will make life more unaffordable for working families everywhere.
Every economic indicator is flashing red, but we still have time to stave off a full-blown crisis and limit the damage to come. The president has dug in on his disastrous plan, and his Treasury secretary, Scott Bessent, is too busy spinning tales to do his job and prevent the fallout. So it now falls to Congress to contain the damage.
Trump’s tariff policy is based on the International Emergency Economic Powers Act, which gives the president broad power to regulate international commerce to deal with extraordinary threats and a declared national emergency. He has declared that our long-standing trade relationships with dozens of countries suddenly constitute that kind of national emergency. They do not. Under the terms of the law, Congress can pass a resolution reversing that declaration. Senator Ron Wyden and I introduced a bipartisan resolution that will force a simple majority vote and could put an end to this sabotage of our economy.
Last week, a handful of Republicans demonstrated their uneasiness with Trump’s tariff policies when they joined every Senate Democrat to begin the process of reversing his “emergency” declaration justifying a trade war with Canada. But a handful isn’t enough. We need more Republicans to stiffen their spines and pass our resolution to fix this. If both Trump and congressional Republicans refuse to rein in the current policy, every family and every corner of our economy will be hit as people lose jobs, consumer spending declines, lenders face defaults and confidence in our financial system erodes. Yet the GOP seems intent on making the problem worse. Early on Saturday morning, Senate Republicans jammed through a budget resolution setting up fast-track passage for massive cuts to Medicaid and food assistance so they can finance trillions of dollars of tax giveaways to billionaires and large corporations.
And the economic hits keep right on coming. Elon Musk has declared social security a “Ponzi scheme” as he takes his chainsaw to the agency that delivers cheques to millions of seniors who depend on them. The so-called Department of Government Efficiency has slashed billions of dollars of research grants that fuel innovation and support good jobs in every state in the nation, while public health departments and community health centres are cutting back services and worrying about whether they can remain open. Each of these decisions deals a body blow to our economy, and the impact will be cumulative.
Instead of seeking to inflict more pain and deepen the crisis, Congress and the Trump administration should be preparing to act swiftly if our economy slides into a recession. They should stand ready to expand support for Medicaid — not slash it — so the millions who lose their jobs because of Trump’s economic mismanagement don’t lose their healthcare coverage, too. Stand ready to expand social security — not gut it — by passing an emergency, temporary adjustment so retirees who will never get the chance to recover their lost savings are a little bit better protected from the chaos. And strengthen oversight and capital standards for banks — not undermine them — so financial contagion doesn’t take down our financial system.
Trump may be an arrogant man who dines by candlelight with his wealthy donors while his shortsighted policies burn down our economy. But he is not a king and Congress is not powerless. We can act to stop him, and we should.
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