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President-elect Biden wants $1.9 trillion in COVID public health and economic relief funds.
First Response
Well we now have the Biden plan for responding to the COVID-19 crisis, which he calls the American Rescue Plan. And we can definitely say it’s big ($1.9 trillion), ambitious, and detailed. Whether it can pass into law, and how long the Biden administration will dither until finding the only strategy that can succeed, is another matter.
I don’t have a lot of new thoughts beyond what I said yesterday, so let me just lay out what’s in this thing:
Public health: This is a massive effort of $415 billion. It would create a national vaccination program with public centers and mobile units across the country; ensure free vaccine delivery to all Americans, including those on Medicaid; expand testing to support safe reopening of schools and other facilities, with $170 billion specifically for school reopening and emergency relief; fund a 100,000 strong public health jobs corps (an idea first seen in the Prospect) for vaccine outreach and contact tracing; expand health services to vulnerable populations and congregate settings; invest in treatments and other supplies; and add 14 weeks of paid sick, family, and medical leave. That’s a fully articulated program that it would be impossible to spend too much money on, if it results in returning to a normal life and economy faster.
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Survival checks: This would top up the $600 checks already passed in the December relief bill to $2,000, and expand eligibility to adult dependents, who were cut out of the December bill. More on this below.
Unemployment insurance: This would increase the federal unemployment boost from $300 to $400, and extend benefits and COVID-related unemployment programs through September (right now they would expire in mid-March).
State and local aid: There’s $350 billion here, which based on the numbers I’ve seen is probably enough, if not more than enough, to cover revenue shortfalls at the state and local level. There’s an additional $20 billion for public transit and $20 billion for tribal governments, and the bill would temporary cut the state match for food stamps (SNAP). I still think this is worded to cover “COVID-related costs,” however, and while money is fungible this might get tricky in some cases where there’s just a revenue gap.
Evictions and foreclosures: This would extend the eviction moratorium to September (it will expire at the end of this month, though Biden can keep the eviction moratorium going through executive action). It would also add $30 billion in rental, water, and utility assistance, on top of the $25 billion passed in December. Just New York City renters owe $1 billion in back rent, so the need here is obviously pretty large. There’s also $5 billion for emergency housing to prevent homelessness.
Hunger: Extends the 15 percent increase in SNAP benefits through September, adds $3 billion to the Women, Infants, and Children (WIC) program, and partners with restaurants to feed people, helping both small businesses and the needy at once.
Child care: The December bill had $10 billion for child care providers to stay open. This adds another $40 billion, and gives a tax credit to families to cover the cost of child care.
More tax credits: As mentioned yesterday, the bill adopts the Brown-Bennet expansion of the Child Tax Credit, to $3,600/year for children under 6, or $3,000/year for children between 6 and 17. It’s only a one-year expansion, as is an expansion of the Earned Income Tax Credit and money for the welfare block grant. There are much better ways to deliver these benefits—like with a flat check—than through a tax credit, which families won’t see until 2022, and which denies the lowest-income people in the economy any benefits.
Health coverage: Subsidizing COBRA would continue through September, and premium support would increase. There’s also money for veterans’ health and substance abuse programs.
Small business: There are $15 billion in grants to the hardest-hit small businesses, and a $35 billion infusion into state, local, and non-profit small business financing programs, which would go into low-interest loans.
Cybersecurity: There’s a pot of about $10 billion for cybesecurity, obviously fallout from the Solar Winds hack.
Minimum wage: And oh by the way, it raises the minimum wage to $15/hour.
I wanted to post everything in the bill so there’s a sense of the comprehensive effort here. It’s a policy smorgasbord, and nearly all of it is important and well-rendered and would help a great many people. I’d definitely do some things differently—the Child Tax Credit comes to mind—but in general this is solid work.
The problem is that there’s no way a single Republican would ever sign onto this. It nears the scope of the Heroes Act (if you add the $1.9 trillion to the $900 billion passed in December, it’s just about the size of the Heroes Act), which was rejected out of hand by Republicans for six months. And yet the Biden team wants this to go through regular order, meaning it would require 10 Republican Senators to sign on.
That’s not going to happen. It doesn’t have to happen; with the exception of the minimum wage, everything in this bill can be passed through budget reconciliation on a majority vote. I’m not certain every Democratic Senator would vote for this, however. And by adding Brown-Bennet, you invite all of those Senators, any one of whom can derail the bill, to add their own pet projects. It sets up to be messy and extended. And unemployment benefits expire in March, and the vaccine and testing money is needed like today.
My sources tell me that Biden’s team is well aware of the urgency. But I fear they’re setting up a bad process that denies quick, trust-building action.
To that point, a messaging problem has emerged. Since Donald Trump intervened with the December bill and said the direct payments were too low, the concept on offer has always been to increase those $600 checks to $2,000, a difference of $1,400. That’s what the bill that AOC wrote up an hour after Trump’s video said. That’s what the CASH Act, passed in the House after Trump signed the December bill, said. That’s what Senators like Bernie Sanders fought for in the last week of 2020. It was always topping up to $2,000. That’s reflected here.
The allure of round numbers led to the Georgia Senators and Biden himself wrongly saying, approximately “If you elect them, you’ll get a $2,000 check.” But you won’t, you’ll get $1,400 on top of a prior $600. So the left has jumped all over this to say that Biden lied or is shortchanging people or whatever. He really isn’t; the deal was always a top-up. But it really wouldn’t be that hard to convert this to a $2,000 check. It would cost roughly $200 billion to make that change, and I can’t see anyone willing to accept $1.9 trillion balking at $2.1 trillion. (I also think any normal person not on Twitter will be thrilled to get $1,400 and won’t hold a grievance.)
But this is all the more reason to split out what you can get Republican votes for as a standalone and get an early victory. The base of the party lacks trust in Biden, and some are ready to pounce at any slight. Fulfilling this one high-profile promise—which practically every Senator says can get 60 votes—would put proof to the ambition expressed in this bill. And it would get that done quickly, instead of relying a lingering, lumbering package that raises doubts in the public mind about Biden’s seriousness.
So to sum up, I like the bill, I question the strategy, and I think those carping about the size of one element of the package should pay more attention to the process for getting any of it passed.
Number of Vaccine Doses Given
11.9 million, up from 10.8 million on Thursday. Up to 39 percent of supply being administered. Third in the world in doses per capita, behind Israel and the UK. We’ve been at or near the 1 million shots/day threshold all week. That’s been Biden’s benchmark. He needs to get more ambitious; with the variant spreading, we need twice as much to stay ahead.
Today I Learned
- Get a better mask for going to the grocery store, or wear two. The virus mutation is very contagious. (Vox)
- Schools have to be increasingly careful with the new variant as well. (New York Times)
- A nuanced look at the vaccine rollout from Jonathan Cohn. (HuffPost)
- We’re almost certainly going to see immunity passports before long, and Israel is already rolling them out. (CNBC)
- I would say that business travel is not coming back, not to the same degree. (Financial Times)
- Payment habits and the slow death of cash is also mostly here to stay. (American Banker)
- Cargill undermined health and safety protocols for meatpackers, the union says. (Bloomberg)
- Retail rents in New York City are circling the drain. (Wolf Street)
