Politics Democrats won't acknowledge what good pandemic news means for their $1.9 trillion bill
On The Money: Schumer urges Democrats to stick together on $1.9T bill | Collins rules out GOP support for Biden relief plan | Powell fights inflation fears
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While people are still struggling from the coronavirus pandemic and its economic consequences, the economy and the fight against the virus have improved dramatically over the worst months of 2020.
Vaccinations are rolling out, infections are down from earlier in the winter, and the Congressional Budget Officethat the economy will continue to improve throughout 2021, with GDP projected to return to its pre-pandemic levels by the middle of the year.
Democratic leaders know all this, but when they are put in the position of justifying the $1.9 trillion American Rescue Plan in light of it, all they can do is shrug it off.
The GOP’s anti-stimulus rallying cry: What happened to the unspent $1 trillion?
Much of the aid money was designed to be spent gradually, economists say. And the country still needs more.It’s a criticism meant to underscore their argument that the resurgent U.S. economy doesn’t need another giant influx of cash, and certainly not the $1.9 trillion package that Biden is seeking — a view that some Democrats like former Treasury Secretary Larry Summers also embrace.
“We cannot go through the situation we did back in 2009 where the stimulus wasn’t strong enough, and we stayed in recession for years,” Senate Majority Leader Chuck Schumer said on the Senate floor on Wednesday, as if Congress hasn’t spent several trillion dollars responding to the coronavirus already. “Just because the numbers are not as bad as they were doesn’t mean that we don’t need a continued strong push to get us out of this ditch and go upward and forward.”
What do the numbers mean, then?
Perhaps the country is still in a ditch but not at the bottom of it. What Schumer communicates is, the Democrats committed to spending $1.9 trillion or something very near it, and that’s that. Their plan will not be conditioned on the pandemic's improving circumstances.
Congress is writing up Biden’s stimulus plan. Here’s what’s in it.
Stimulus checks and UI, but not a $15 minimum wage: the state of the House’s stimulus bill so far.The House of Representatives has drafted and passed its version of the budget reconciliation package, which includes $1,400 stimulus checks for those making up to $75,000 and $400 expanded weekly unemployment insurance benefits through August 29. It also contains a restaurant rescue fund, money for reopening schools, and Democrats’ long-sought-after funding for state and local governments, among other items. House Democrats included a $15 minimum wage provision in their version of the bill, but that’s a non-starter in the Senate.
Democrats must perceive that honestly acknowledging the improving pandemic outlook would discredit the inflated notions of urgency that they need to justify overspending. And they are planning to, are determined to, overspend.
The House-passed American Rescue Plan, which the Senate is now taking up, would spend some $350 billion for state and local governments, territories, and tribes to cover funding shortfalls, though the many billions that the federal government has already offered to state and local governments, businesses, and individualstheir reductions in tax revenue.
For state and local funding, Mark Zandi, chief economist at Moody’s Analytics,the Washington Post, “There’s still a lot of uncertainty in these estimates, but $100 to $150 billion would be appropriate given the circumstances. That’s well shy of the $350 billion they have penciled in the legislation.”
Fact check: Breaking down spending in the COVID-19 relief bill
About 85% of the proposed spending is pandemic-related, a nonpartisan analysis found. But only about 9% goes to direct COVID-19 intervention. Around 8.5% of the $1.9 trillion, at most, goes to direct containment measures such as vaccines and testing. The total is somewhere between $100 billion and $160 billion, depending on whether one includes items like $10 billion in medical supplies and $24 billion in child care for essential workers, as the White House does in arriving at the larger figure.
The bill also allows $128.6 billion for the Elementary and Secondary School Emergency Relief Fund, even while Congress has already approved $68 billion for emergency school funding in previous bills, according to the Committee for a Responsible Federal Budget's COVID money tracker. The emergency funds already established were also supplemented by other federal school funding, such as the Governor's Emergency Education Relief Fund.
Beyond that, as a general matter, pandemic aid funding that Congress already set aside in previous bills is still available, as Republicans in Congress and other critics of the bill have been pointing out. CRFB estimates that some $1 trillion has not been disbursed.
Even though centristssome slight cost reductions, Democrats are overlooking or simply disregarding what the good economic and virus news implies about their spending package. The pandemic outlook is demonstrably improving, and where funding needs remain, they hardly justify $1.9 trillion.
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Takeaways from the COVID-19 stimulus bill passing Congress: Weeks of partisan fighting comes to an end with a win for Biden .
The two sides fought for months over the latest COVID stimulus bill. It ended Wednesday with a Democratic win. The bill now heads to Joe Biden's desk.The legislation, dubbed the American Rescue Plan, includes $1,400 stimulus checks, billions of dollars for vaccines, and money to reopen schools.