The request for a voice vote on the stimulus bill…
The suggestion that the insurance industry cover excluded Business Interruption coverage during the crisis…
When Congress decided to give every American a check for up to $1,200 to “stimulate” them Representative Thomas Massie (R-Ky) requested a “recorded vote” to assure that enough Congressmen were present to fulfill the requirements of the Constitution that a majority of voting members be present for the vote.
Massie didn’t want Congress to set a precedent that a minority of members could pass this type (or any other) legislation by assuming a quorum and passing laws by a voice vote when no majority were in attendance. Imagine a voice vote in the middle of the night by a supposed quorum to restrict our 1st or 2nd Amendment rights! Would it happen? Probably not. Can it happen – YES!
The President joined the majority of Congressmen by suggesting that the recorded vote could delay sending checks to the public that needed the money to allay the economic pressures caused by the restrictions imposed due to the Corona Virus. He’s right – calling Congress in session when everyone is hunkering down in their homes trying to avoid contact with the virus is a danger. There are other ways to technologically allow congressmen to vote from home (i.e. video conferencing a la the concept in the movies in which everyone is on a screen voting remotely).
BUT WHAT DOES IT REALLY MEAN?
Democrats don’t want to be seen as supporting President Trump. Their leadership treats the President like the plague – don’t get near it and don’t consort with him under any circumstance and under severe penalty. However, they also know the ramifications to their re-election potential of voting NO on a bill to give away a trillion dollars, presumably to “help” the average citizen.
So, they tried to load up the bill with favored pork projects to justify accepting something backed by the President and the Republicans. Most of the projects were eliminated by public scrutiny as having nothing to do with the solution to the virus. Enough were retained to assuage the House leadership. They saved face before their progressive supporters and constituents.
However, Democrats still didn’t want to be seen as supporting the President. But they DID want to be seen as supporting the voters with free money. Meanwhile, Republicans didn’t want to be seen as supporting the Democrats’ pork projects but they, too, wanted to be seen as economically supporting the voters during this trying time. And all congressmen, by their very natures, wanted the flexibility to either support or deny their support for this crisis effort in the future depending on the eventual outcome or ramifications of these unprecedented actions.
You see, adding several trillion dollars of debt to the economy will not cause ripples to our future – it will cause tidal waves! We are not wise enough to determine if we can withstand the “effect” of this “cause” but the esteemed congressmen want to be able to jump to either side of the argument depending on whether we can weather this “stimulus” effort.
This may not be popular, but feeding a hungry man candy and cake instead of more substantial fare will certainly fill him to satisfaction but the results over time may not be acceptable. Economic stimulus (def. giving free money) will give the public spending power but that may be the candy and cake if the economy is frozen for several months. They will be hungry for more and we will already have set a precedent of the country printing money for which it has no backing assets. That appears to be a slippery slope to economic inflation or currency deflation.
AN EXAMPLE OF WHAT THIS MEANS TO THE INSURANCE INDUSTRY
States are pressuring insurance companies to pay Business Interruption claims even though many policies specifically exclude that coverage. The insurance industry has done well in recent years and the politicians would like them to help alleviate the economic stress caused by the closure of most businesses to lessen the effect of the Corona Virus.
In the spirit of everyone bearing the load to lessen the burden, especially on small businesses, the insurance industry CAN do things to lighten the load but granting coverage for uncovered losses is akin to asking the industry to cover all collision claims for all drivers even though collision coverage may not have been purchased by some drivers. What sense does that make and what precedent does that set?
Rather than force the insurance industry to grant coverage for Business Interruption exposure that has been specifically excluded (and not contemplated in the rate creation) why not take a different route that would shift some financial burden but not summarily cause carriers to cover uncovered losses?
Why not ask the industry to delay premium payments or extend standard coverage for the duration of the crisis? Both methods will cause economic hardship for the industry but covering all Business Interruption losses for property policies sets precedent for covering uncovered losses while extending policy terms without additional premium asks the insurance industry to constrict its revenue generation on behalf of people and businesses who are forced to suffer economically due to war-like circumstances. The extension of coverage without additional premium would continue to pay any covered losses with the recognition of the industry that closed businesses will have much less exposure to normal losses, actuarially justifying some of the deferral and extension to the stockholders while helping the policyholders by not requiring them to pay for diminished coverage during the time that they are closed for business.