First 100: The Republican Quandary on the American Rescue Plan

Plus: direct payments can be garnished by debt collectors, thanks to the budget reconciliation process.

by

It’s March 12, 2021 and welcome to First 100. You can sign up to have First 100 delivered to your email by clicking here.

The Chief

The American Rescue Plan is law, and $1,400 direct payments to the majority of the country will start going out as soon as this weekend. They will be bolstered by periodic check delivery to parents with kids (they have to fit the $3,000 for children over 6 and $3,600 for children under 6 into this calendar year, and the law literally says “periodic” payments, so it’s totally unclear how much will go out at a time).

State budgets will be bolstered and trigger re-hiring once social distancing runs its course, and school budget top-ups will do the same. There will be hiring for the significant public investments in the bill, to facilitate ventilation improvements in schools and staffing at community health centers and much more. There will be more vaccination clinics and, as Biden announced in his fine speech last night, a go-ahead for all adults to be able to get the shot by May 1. That alone will lead to better days ahead.

There will still be cracks in the ship of state, but Americans are going to see tangible benefits immediately and throughout the next year from the ARP. You have even David Brooks calling this the dawn of a policy revolution unseen since the Reagan era. There’s an opposition party that didn’t provide a single vote for this thing. And the top priority in the White House for the next several weeks is selling this plan, to make it a tag line politically like the auto rescue.

So what exactly are Republicans going to do?

Read all of our First 100 Reports

We’ve seen a few stages of response so far. The whole “let’s pretend I was for it all along” approach, attempted by Sen. Roger Wicker (R-MS), isn’t going to work nationally and it will become more of an embarrassment for the GOP than a benefit. Senate Minority Leader (fun to say that) Mitch McConnell (R-KY) has offered the “I loosened that can for you, so you don’t get credit for opening it” approach, which also seems doomed to failure. Talking people out of their improved circumstances will be as impossible as talking people into seeing their misery as actually good. The vaccine rollout was kind of a mess when Biden took it over and people were $1,400 (at least) poorer. Credit-shifting isn’t going to work.

So here comes noted Medicare fraudster Sen. Rick Scott (R-FL) with approach number 3: send back the money. He’s not asking for people to do this of course but the states, on the argument that they don’t need the help.

It’s important to recognize that Scott did exactly this as his first big move while governor of Florida. Ten years ago, Scott and Scott Walker in Wisconsin gave back high-speed rail money offered to them in the 2009 stimulus. This was a macho Tea Party move at the time, to literally deny you own public benefits on the grounds that it was socialist or whatever to accept it. (While this ended the public high speed rail project in Florida, a private-run service called Brightline does exist, currently from Miami to West Palm Beach, with a proposed build to Orlando. By the end of 2019 it had the highest death rate of any passenger rail service in the U.S., and right now it’s suspended during the pandemic.) Scott also refused to expand Medicaid, despite lots of money offered by the Obama administration for that purpose.

This worked out personally for Scott so he’s running back the playbook. But his home state of Florida has one of the worst pandemic-fueled budget crises in the country, a combination of having no income tax and seeing tourism-related tax revenues plummet. So Floridians don’t see accepting rescue funds as “taking responsible action to avoid wasting scarce tax dollars,” as Scott puts it. In fact, Gov. Ron DeSantis (R-FL), who’s positioning himself as a presidential candidate, is complaining that Florida didn’t get enough aid money.

So no, I don’t think “send needed aid back to Washington” is a winning strategy either. Republicans have walked into a blind corner on this. The economy and the health of the nation are going to improve and they stood in opposition to that, en masse. Gerrymandering and voter suppression can only go so far when you deliberately make yourself this unpopular, though I’m sure the GOP will try.

Reconciliation is Absurd, Part MCMXVII

The first direct payments sent under the CARES Act gave banks the ability to grab them and offset existing debts. This was fixed in the second set of payments back in December. But the American Rescue Plan, unlike those, went through budget reconciliation. Because of this, lawmakers could not include restrictions on the funds from being garnished by private debt collectors. There’s no instruction to the Treasury Department, as there was in the CARES Act, to write rules that would protect the payments, either.

In a joint letter this week, the American Bankers Association and several financial reform groups asked Congress to pass separate legislation protecting the payments. (It’s annoying that the letter doesn’t talk about how banks can use the money for debt collection, but whaddya gonna do.) For a non-trivial number of people, these payments mean covering back rent, or food, or medicine, or other emergency needs.

A standalone bill could probably pass with enough attention paid to it; the Senate unanimously passed a bill last year to exempt CARES Act payments from private debt collection but it never became law. But this is another example of how terrible budget reconciliation is as a tool for advancing policy. Under reconciliation you can transfer hundreds of billions of dollars to the public. But you can’t protect that money from flowing right into the bank account of a debt collector. It’s madness. End the filibuster already and let’s allow the majority to pass what they want.

What Day of Biden’s Presidency Is It?

Day 52. There’s some controversy on this, with Biden yesterday calling it his 50th day. He was sworn in January 20 at noon, that’s Day One. I don’t know who needs to hear this but that counts as a day.

Today I Learned

Unlike many news organizations, the Prospect has remained staunchly committed to keeping our journalism free and accessible to all. We believe that independent journalism is crucial for a functioning democracy—but quality reporting comes at a cost.

This year, we’re aiming to raise $75,000 to continue delivering the hard-hitting investigative journalism you’ve come to expect from us. Your support helps us maintain our independence and dig deeper into the stories that matter most.

If you value our reporting, please consider making a contribution today. Any amount helps secure our future and ensure we can continue holding power to account.

Will you support independent journalism with a donation to the Prospect?