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President Biden's nearly $2 trillion stimulus package on Friday cleared a procedural hurdle in the Senate, as a tepid jobs report confirmed the economy is still sputtering from the pandemic. Raphael Bostic, president and CEO of the Federal Reserve Bank of Atlanta, joins Judy Woodruff to discuss who has been most impacted and the federal government's response in reaching those in need.
Let's take a closer look now at who is bearing the brunt of the pandemic's economic pain, and whether federal relief efforts are reaching those who are most in need.
For that, we turn to Raphael Bostic. He's the president and CEO of the Federal Reserve Bank of Atlanta.
Mr. Bostic, thank you so much for joining us.
Let me start by asking you about the economy overall. It was just a few days ago the Congressional Budget Office was forecasting we're going to see a robust recovery in the middle of this year, but then today and yesterday we're seeing discouraging reports about unemployment, how many people are out of work and have been for a long time.
What does this economy look like to you?
Well, I think there are two things to keep in mind here.
One is that, in the current period, we have a virus that is still going through the economy and going through our population quite significantly. So, while that's happening, we're going to see choppy times, and I think we're going to have rough times for the next couple of months.
But, as the vaccine gets further into the population, I do we are going to turn to a much more robust growth period. But that's going to not come until the summertime, at the earliest. So, we have really got to try to weather this time as much as we can.
Well, to bring it down to the individual level, who in this economy is doing well, or maybe about to do better, and who is going to be struggling for the foreseeable future?
Well, this pandemic has really hit the population in two different ways.
We have a number of people who have jobs where they're able to work from home, they don't necessarily need to be next to people or close to people to do their work. They're doing fine, and they're going to continue to do fine.
It's people who have jobs where proximity is important, the service industries, like in restaurants and in grocery stores. Those are the types of jobs we're going to see struggles. And that will likely continue for months to come.
So, given that, Mr. Bostic, what do you make of the Biden administration's proposal for COVID economic relief, $1.9 trillion? And we know that could change some.
But that's what they're proposing. What do you make of the focus of it, the price tag, and what it's aiming to fix?
Well, I think it's very important that we get relief to people across the economy, because there's still a lot of uncertainty that's out there.
And people are nervous, and people need to have that support, know that that's there. I think the support to unemployment insurance is extremely important, because those are people we know have problems. But we also have to think about how we get support to small businesses that may not have participated in the Paycheck Protection Program and to a number of families that have really stepped away from employment altogether.
We can't forget them, because they are definitely at risk.
Well, as you know, different groups of economists have looked at what Americans have done with last year's federal government payouts.
And the reports that I have seen, they found that $1.6 trillion of it has still not been spent. It's being saved or it's being used to pay off debt. In fact, I was reading this morning that households earning over $78,000 a year have spent less than 10 percent of what they received in federal payouts.
Does that tell you that we need to see more targeting in what the government does next?
Well, I definitely think targeting is important.
But I also think it's important to remember that we still have a lot of uncertainty. And it's not exactly clear where pain is going to hit in the population for the next several months.
And so you saw from the Federal Reserve we acted big and we acted bold in the beginning, because we didn't want the edges to be lost. And so I think the approach that we have taken thus far has really been to say, we'd rather err on the side of being too supportive than not supportive enough, because, if we're not, if we fall short in that support, the damage to the economy and the people who are hurt more permanently is going to be more significant.
And are you saying that still — that applies to this upcoming COVID relief package as well? It's — the danger is in not doing enough, rather than doing too much?
Well, I think we have learned in the last several episodes of crisis that doing more is better.
But we are also learning things through the experience as we move forward. And that should guide targeting. And I'm having conversations with policy-makers to try to assist in that. And I'm hopeful that the targeting will be more effective as we move through the next several months.
You mean toward the lower end of the income scale?
Toward those who are — who have lost their jobs, who are still out of work, and to small businesses in many communities across the country that are the lifeblood for many small towns and many neighborhoods.
We have got to make sure that they stay afloat, so that, when we get to the other side, the communities have a foundation from which they can grow and prosper.
Mr. Bostic, you said last October that this pandemic economy has — and I'm quoting you — excuse me — I'm quoting you.
You said: "It's laying bare and exacerbating disparities that have long plagued our economy along ethnic, racial, gender, geographic, and occupational lines." You said: "The Fed must participate in a deeper and more creative reckoning with a history of racial injustice that continues to weaken the economy for all of us."
My question to you is, is the Fed doing that? Have you been doing that, and, if so, how?
We are absolutely doing that.
We have spent a lot of effort raising the issues that are important in terms of understanding those racial barriers and the structural things that are keeping people from being fully engaged. We are bringing people together with solutions and talking about how we can apply them in communities and in our — in our policy.
And we are having conversations with businesses across the country to really get them to examine their practices and policies and to rethink how they engage with people across the country, and, in particular, in neighborhoods where they have not necessarily been so attentive.
And so we are really trying to drive a different kind of conversation, and have that conversation translate into action, because action is really what we need to see.
And do you think you're making progress?
I know we're making progress.
And I see that every day in my district here in Atlanta and across the country.
Raphael Bostic, who is the president and CEO of the Federal Reserve Bank of Atlanta, thank you very much for joining us.
Thank you, Judy. It's a pleasure to talk with you.
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