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Schatz: Relief package will fend off ‘economic scarring’

  • SCHATZ

Federal coronavirus aid on its way to Hawaii will help the state avoid a prolonged economic downturn caused by the COVID-19 pandemic, said U.S. Sen. Brian Schatz on Wednesday.

Hawaii is expected to receive more than $6 billion from the American Rescue Plan, a $1.9 trillion federal COVID-19 relief package passed earlier this year.

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Schatz, a Democrat, said during a livestream that the package includes money for the unemployed, renewal of the Paycheck Protection Program, support for the arts community by way of the Shuttered Venue Operators Grant Fund, as well as money for vaccine distribution.

However, compared to previous federal coronavirus relief, the American Rescue Plan also provides money to fill gaps in the state and county government budgets and to prevent furloughs and layoffs, he said, which would otherwise lengthen the period of economic downturn.

“With this infusion of capital, I’m pretty confident that we can be back into an economic growth scenario by the third or the fourth quarter of this year,” he said. “Obviously, our unemployment rate is going to continue to be our biggest challenge. … But this gives us a real chance to recover as long as we do the right things as it relates to the pandemic, especially vaccinations.”

Schatz said criticism surrounding the size of the bill is an argument he hears often in Washington, but almost never in Hawaii.

“Republicans, Democrats, independents, nonvoters, small-business people, students, the elderly — nobody comes up to me and says, you know, this bill is providing too much help during this pandemic,” he said. “I do think that’s a kind of partisan framing that exists in Washington, but doesn’t exist in a lot of people’s home states.”

According to Schatz, Treasury Secretary Janet Yellen and the chairman of the Federal Reserve have said that there’s a much bigger risk doing too little than too much.

“The reason is something called ‘economic scarring,’” he explained. “If we allow people to fall down economic holes, they will literally never be able to emerge from it, or at least it will take 10 or 20 years, whether it’s a small business or it’s an individual family.”

While some federal relief funds already have been deployed, Schatz said vaccination resources provide the “highest bang for your buck.”

The rate of economic and societal recovery is dependent on the rate of vaccinations, he said.

“We’ve actually been doing OK, but we’re about to enter a new phase in terms of vaccinations.”

In the coming weeks, Schatz said, the state will go from having a limited supply of vaccines to having so many that additional efforts will need to be made to reach those who have not received an inoculation, whether because of technological or logistical barriers, or vaccine hesitancy.

“We’re going to have to make sure that everybody that is eligible for a vaccine gets that vaccine, because all of us could do what we need to do, and if we’re only at 55% of the public vaccinated, we’re not going to reach herd immunity,” he said.

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“I just think it’s incumbent on all of us to talk about what a miracle of modern science and medicine this thing is. It really will save your life and bring the economy back.”

Email Stephanie Salmons at ssalmons@hawaiitribune-herald.com.

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