Jack Rasmus

I was recently asked my view on the expiration of rent moratorium on July 31 and, specifically, the role of the US Supreme Court in the matter. The inquirer wanted to know if the expiration, ordered by the Supreme Court, will precipitate a constitutional crisis, as the Biden administration has extended the moratorium another two months until October 3 nonetheless, despite the Court’s declaration the Executive Order establishing the initial moratorium until July 31 had to be ended on that date. What follows is my initial viewpoint on the evictions scandal set forth in my reply to the inquirer. A further, more comprehensive analysis in a written article, to be posted on this blog, will follow.

INQUIRY:

We’re discussing the announcement by the US Centers for Disease Control and Prevention that it was renewing the ban on evictions that expired on July 31, setting the stage for a constitutional showdown after the US Supreme Court ruled earlier this year that the public health agency didn’t have the authority to issue such a ban. After days of protests outside the US Capitol and appeals by federal lawmakers, US President Joe Biden has bowed to popular pressure and directed the CDC to extend the federal eviction moratorium until October 3. The move will protect perhaps 90% of American renters as more than 11 million people remain behind on their rent payments, according to CNBC. To what extent does the CDC have the right to bypass the Supreme Court decisions, and what’s next for the people who are on the eviction list, after the moratorium expires or is deemed unconstitutional and annulled?

MY REPLY:

I doubt very much this will get to the Supreme Court again by October 3. That’s why, I believe, Biden only extended it a couple months—not until the end of the year. Were it the latter, then SCOTUS might have reviewed it again. In short, I don’t see a constitutional crisis occurring as a result. Of course, there will be numerous lower court actions pushed by Republicans. But no action by the Court for the token two month extension. It won’t want to provide fodder to the commission now authorized to review the Court itself; and growing calls for reducing their terms from life to 14 years, or expanding its numbers. The Court won’t want a direct conflict with Congress or the Executive.

As for the evictions themselves, the 11m is an understatement. As I understand, that’s the potential number for renters whose housing is someway supported by federal financing or other support. There are actually 48m or so rental units in the US, and I’ve heard actual renters about 80 million. Evictions have been going on for millions since the beginning of this year, especially in states (mostly ‘red’) controlled by Republican legislatures and governors who have been engaging in a quiet ‘austerity’ campaign, cutting back rent support for non-federal rental units, pandemic unemployment assistance, small business loans, etc.

As for rental payments in arrears, there are those in forbearance and those not but behind in rent payments more than 60-90 days. The actual numbers are not accurately reported by the press. It depends whether you include forbearance, in arrears 60 days, or 90 days, or more, and if you include federal supported rental units or all rental units. Earlier this year I saw figures that the total back rent owed was $75 billion. Biden’s American Rescue Plan authorized $52B I think. But only $3B has been distributed. All we get from the mainstream press is that it’s due to bureaucracy. That’s too simplistic.

As I’ve been informing my radio show listeners and my blog audience, the $40B or so unspent on rent assistance to date compares to the Federal Reserve’s continuing $120B/mo essentially ‘free money’ being distributed to banks, businesses and investors at negative (real ) interest rates. No one, including SCOTUS, is concerned about that are they? The Fed will continue doing so until at least a year more, probably after that as well. We can make the same point with the $53B in unemployment benefits assistance authorized in the American Rescue Plan that will now be diverted to pay for the Infrastructure bill, along with other diversions and smoke and mirrors financing of Infrastructure in order to avoid restoring a few of Trump’s tax cuts!

The real Constitutional issue is SCOTUS itself. Nowhere in the Constitution is the right given to the court to declare Executive Orders or Laws unconstitutional. But Congress has allowed it to continue. We see a series of decisions in recent decades where the Court it slashing away at what’s left of democracy in America: the evictions case is just the latest. Not long before, there’s the support for voter suppression by further gutting the Voting Rights Act; there’s decisions endorsing further gerrymandering; there’s Citizens United and its further similar decisions; and of course there was the ‘selection’ of George Bush Jr. in 2000. Some refer to the Imperial Presidency. The Imperial SCOTUS is just as much a problem. SCOTUS itself is the constitutional issue. But of course mainstream media won’t go there.

It’s unfortunate the evictions are occurring (notwithstanding the 60 day moratorium extension on some rental units), just as unemployment benefit assistance has been cut (in some states early), as the small business loan programs have ended, and as inflation is growing. Republicans and the corporate wing of the Democrats are betting that the economy, now opening up again (as it did last summer) will be sufficient to generate a sustained recovery this time with the aid of the vaccination campaign. However, the economy growth is slowing, and I’m betting it will relapse again by end of year. We have a ‘rebound’ going on, but not yet a sustained recovery. And we have a premature shadow austerity policy shift emerging as it slows. The American Rescue Plan stimulus is fading. The Infrastructure bill is too small and won’t take effect until well into 2022. And the $3.5T Family plan will never see a budget resolution vote to get it passed. It’s already DOA. And Delta Covid is taking off, in the US and globally. These drags on the recovery may well negate the effects of the reopening eventually. We could have another repeat of the rebound of summer 2020 relapsing by year end once again. Although probably not as strong a relapse this year as in 2020, since there won’t be any closure of business this time.

Dr. Jack Rasmus
August 4, 2021