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“President-elect Joe Biden unveiled a $1.9 trillion coronavirus plan Thursday to end ‘a crisis of deep human suffering’ by speeding up vaccines and pumping out financial help to those struggling with the pandemic’s prolonged economic fallout.” AP News
Highlights of the plan include:
The right is critical of Biden’s plan.
“The biggest problem… is his plan to increase the generosity of the direct checks to individuals passed last month from $600 to $2,000. These checks would be less generous for higher-income people. But many would still go to households with six-figure incomes, and some would even go to families earning more than $300,000 per year. Moreover, the checks are designed to go to all households with income below a cap, including those that did not experience employment loss…
“The goals of any economic stimulus bill are straightforward: to preserve the productive capacity of the economy, to relieve suffering and to help the economy adapt to post-pandemic changes. How do direct checks advance any of those goals? What pressing needs do the checks fulfill?”
Michael R. Strain, Bloomberg
“Since the mid-1970s, one-time cash payments to individuals to stimulate economic growth have been tried on at least five separate occasions… But history shows such spending does nothing to stimulate the economy. In the end, it only adds to the federal debt…
“Although data are still coming in on the effects of the one-time cash payments authorized by last March’s Cares Act, so far the pattern is the same. Using a large-scale survey of its effects, a National Bureau of Economic Research study by Olivier Coibion, Yuriy Gorodnichenko and Michael Weber found that ‘most respondents report that they primarily saved or paid down debts with their transfers, with only about 15 percent reporting that they mostly spent it.’ Thus the payments have done little to boost the economy…
“Short-run economic assistance to individuals can be justified on humanitarian grounds, not on the discredited idea of stimulating the economy. That means it should be focused on small businesses and individuals who have suffered hardship from government-imposed lockdowns, while public officials keep working to make vaccines and treatments available as quickly as possible.”
John F. Cogan and John B. Taylor, Wall Street Journal
“Remember when Mitch McConnell bet the Senate majority on refusing to take up the direct-stimulus relief bill from the House? How’s that working out?…
“Now, not only will Biden get credit for it if it passes, McConnell can’t keep it from coming to floor any more. McConnell might be able to filibuster it, but Democrats are already planning to use reconciliation to force it through if necessary — and plenty of Republicans might not want to start out 2021 by blockading the new administration’s emergency aid push, especially after the egregious optics of the past week or so. We might have been better off with Pelosi’s last position before the final bill of $2.4 trillion, rather than the combined spending between the two bills of $3 trillion or more.”
Ed Morrissey, Hot Air
“What Biden has presented isn’t a COVID-19 relief bill. It is a Sen. Bernie Sanders-type wish list of everything conceivable that the left has wanted to spend money on for years… [including] paid parental leave, a $15-an-hour minimum wage, $400 a week bonus unemployment checks, transit aid, paid leave of $1,400 a week, some $100 billion for school aid (for schools that have been shut down for almost a year!), ‘health equity’ grants, student debt relief and checks for illegal immigrants…
“If the idea here is to create jobs, there is a less expensive and much more effective way to get employers to hire and workers to get back in the labor market. We could completely eliminate for an entire year the 7.5% payroll taxes paid by every small business and taken out of every worker’s paycheck. That would unleash millions of jobs. This would have virtually ZERO administrative and bureaucratic costs… Instead, we now get Phase 7 of debt spending — and Biden wants another trillion-dollar infrastructure bill to follow.”
Stephen Moore, Fox News
“The case for another stimulus appears entirely political. The most recent Commerce Department estimate for the third quarter of 2020 has real GDP up at an annualized rate of 33.1%—largely offsetting the record decline in the second quarter. The Atlanta Fed estimates that the economy grew 10.4% in the fourth quarter, up from its initial forecast of 2.2%. Household income is higher than it was before the pandemic, retail sales rose from Nov. 1 through Christmas by 2.4% compared with last year, total household savings are near a record level, the economic harm of the latest wave of infections is far less than the damage from earlier one, and consumption, based on all economic indicators, is set to leap when pent-up demand is unleashed as the vaccine reduces the virus transmission rate.”
Phil Gramm and Mike Solon, Wall Street Journal
The left is supportive of Biden’s plan.
The left is supportive of Biden’s plan.
“I think at this point in time, the vaccine piece is obviously the most important part. One official said that what the federal government has done so far has been inadequate and they want to ‘actually underwrite the resources necessary for a national vaccination program.’ To me this is significant not just in terms of financial resources, but it indicates that the Biden Administration will be actually taking some measure of responsibility for the vaccine situation instead of just passing the buck — treating it as a national issue requiring federal funding and some form of a national plan…
“The odd thing about this package, as described, is that while many of its provisions really are just emergency pandemic measures [including] stuff like the expanded CTC [child tax credit], it really feels like it ought to be permanent policy. It’s true, of course, that it will help out with pandemic-related hardship. But drastically reducing child poverty ought to be a forever goal, not just a 2021 goal.”
Matthew Yglesias, Substack
Dated but relevant: “[The Child Tax Credit] currently offers up to $2,000 a year for families with significant earnings but little or nothing for many poor people. That’s because households have to earn at least $2,500 per year for the credit to be ‘refundable,’ or for it to count for households that don’t have a positive tax liability. An American without any taxable income — say, a single mom with a kid who lives with family but doesn’t have a job because of the recession or some other barrier — won’t owe any taxes, but because their income falls below that $2,500 a year threshold, they don’t get any benefit…
“Even above $2,500 per year the credit phases in slowly, at a rate of 15 percent. A parent has to earn at least $11,833.33 to qualify for the full refundable credit, a bar that the poorest households can’t meet. The Biden proposal would expand the size of the child credit and make it fully available for all poor people regardless of earnings… [If passed] Poverty among children would fall from 14.8 percent to 9.5 percent, meaning 4 million kids would escape poverty. Deep poverty — the share of kids living on half the poverty line or less — would fall almost by half, from 4.6 percent to 2.4 percent.”
Dylan Matthews, Vox
Regarding the minimum wage increase, “Republicans have long opposed such a move. The Republican Senate majority leader, Mitch McConnell, blocked a minimum wage increase in 2019, and Republicans filibustered a minimum wage increase effort in 2014…
“So far the [overall] plan has, however, united two diametrically opposed forces – Democratic socialist [Bernie] Sanders and big business. The US Chamber of Commerce, an influential lobbying organization that represents business interests, praised Biden’s proposal. ‘We applaud the president-elect’s focus on vaccinations and on economic sectors and families that continue to suffer as the pandemic rages on,’ the group said in a statement.”
Maanvi Singh, The Guardian
“The $1.9 trillion in relief Biden is proposing is more than double the $800 billion American Recovery and Reinvestment Act that Democrats passed in 2009 in the wake of the Great Recession. The size and scope of this proposal is a reflection of some lessons Democrats have learned: In 2009, many lawmakers believed they’d have a chance at another bill to deliver more help, but they never did. And so the recovery was slower and more uneven than it could have been had they been more ambitious at the outset.”
Emily Stewart, Vox
“One way to think about [the plan] is that America’s output gap—basically, the economic dent created by [the] coronavirus crisis—is probably somewhere between 3 percent and 5 percent at the moment. The $1.9 trillion would fill that and then some… Biden says he wants to try and pass his initial relief bill with bipartisan support, instead of resorting to the budget reconciliation process that would allow it to be enacted with just a bare majority in the Senate… one can’t help but ask: Will Biden ultimately let the GOP shave down the size of this bill in order to win their votes?”
Jordan Weissmann, Slate
Some argue that “Smuggling in the entire Democratic agenda, immediately, in the context of a ‘relief’ bill, seems like a recipe for disaster… It also confuses the public. Most of these ideas are popular and Republicans should be put in the position of making a judgment on each one of them, one at a time. That begins with the checks legislation, which was a direct campaign promise. People need the help now, the Georgia senators won on it, and my belief and the belief of numerous members of the Senate is that 60 votes exist for it… building some mega-bill gives Republicans an easy out for their opposition.”
David Dayen, American Prospect