The Good And Bad In Biden's Giant Relief Bill

[Shabibilicious]

The good and bad in Biden’s giant relief bill

Rick Newman

·Senior Columnist

Mon, February 22, 2021, 4:05 PM

 

 

Is President Biden’s $1.9 trillion stimulus plan a carefully targeted relief bill? Or a giant Democratic spending orgy?

It’s a mix of both. The House of Representatives is now sweeping numerous spending provisions into final legislation, with majority Democrats likely to pass a bill by the end of February. The bill will then go to the Senate, where all 50 Democrats will have to vote for the bill for it to pass, with Vice President Kamala Harris casting a tie-breaking vote. Senate Democrats have signaled they’ll use the arcane “reconciliation” rules to pass the bill, which means they won’t need the 60 votes normally needed to overcome a filibuster.

Biden’s American Rescue Plan is more controversial than four prior coronavirus relief measures Congress has passed. Republicans think it’s far too big, given that Congress has already pumped about $4 trillion in of fiscal stimulus into the economy. Some economists worry too much stimulus could “overheat” the economy, pushing inflation and interest rates beyond desirable levels. Biden and most Democrats counter that massive spending now is the best way to get unemployed Americans back to work as quickly as possible.

Here’s a breakdown of the bill’s major provisions, with cost estimates form the Congressional Budget Office and the American Action Forum think tank. The first set of measures can fairly be called stimulus or relief, since they relate more or less directly to the economic damage cause by the coronavirus pandemic. The second set of measures are closer to Democratic wish-list items that aren’t directly related to the pandemic. If Senate Democrats balk at the size of the bill, those are the portions most likely to come out.

 

President Joe Biden speaks about the Paycheck Protection Program during an event in the South Court Auditorium on the White House campus, Monday, Feb. 22, 2021, in Washington. (AP Photo/Evan Vucci)

Legitimate Relief Measures

Direct payments of $1,400 to most American families. Cost: $422 billion. Combined with the $600 checks that went out as part of the late-December HEROES Act, this would fulfill Biden’s promise to put an extra $2,000 in most workers’ pockets. Many economists would like to see aid better targeted at people who need it most, so the money doesn’t end up in a Robinhood day-trading account. But it is related to the Covid crisis, for better or worse, so it counts as relief.

Boost supplemental unemployment insurance. Cost: $163 billion. The weekly federal benefit would rise from $300 to $400, with the program’s expiration changing from the end of April to the end of September. There are fair questions about whether this benefit might prevent some workers from returning to the job market, since they might be able to earn more through a roll-up of state and federal unemployment plans. But again, it is related to the pandemic and it is set to expire.

Aid to small business, especially restaurants. Cost: $60 billion, with $25 billion of that for restaurants. While most big businesses are doing fine, many smaller businesses are reeling, especially in retail and hospitality. Minority-owned businesses have had a particularly difficult time getting federal aid that’s being administered by banks. This is meant to help those types of businesses.

Housing aid. Cost: $40 billion. Most of this would go toward struggling renters and homeowners behind on their bills. About $5 billion would go toward caring for the homeless. This is an urgent need for millions of at-risk Americans and it might not even be enough.

Paid leave. Cost: At least $132 billion. The Biden plan would make more workers eligible for paid leave related to Covid-19, and extend the deadline through September.

 

Photo by: STRF/STAR MAX/IPx 2021 2/5/21 10,000 stores are set to close in 2021 as the Coronavirus Pandemic continues to wreak havoc on retailers.

Middle-class tax breaks and child-care assistance. Cost: $180 billion. A variety of tax breaks and new aid for child-care programs would help parents struggling with the cost and inconvenience of taking care of kids as many attend school from home and the crisis upends work routines. Most of the tax breaks only last one year, and new aid for state-run child-care programs would come as one-time grants.

Aid for schools and universities. Cost: $170 billion. Local school districts would get $130 billion, while $35 billion would go to higher education and $5 billion to governors. The money is meant to offset possible cuts in education budgets due to tax revenue shortfalls, especially in poor communities. It would also help schools reopen more fully with proper pandemic protections in place.

Democratic Wish-List Items

Pension relief. Cost: $74 billion. This money would address longstanding problems at roughly 1,400 underfunded pensions covering 10 million workers and retirees, most of them belonging to unions. A government agency called the PBGC is supposed to backstop pensions that run short of money, but it, too, is drastically underfunded and poised to collapse in coming years. The money in the House bill would bail out the riskiest pensions, but it’s controversial because it’s not paired with needed reforms—and it’s not specifically related to problems caused by the pandemic. This could be one provision that doesn’t survive the Senate.

New health care benefits. Cost: $53 billion. The House bill would address a significant problem with the Affordable Care Act by eliminating income thresholds that determine eligibility for health insurance subsidies. So higher-income families would qualify for subsidies once health-insurance premiums hit 8.5% of their income. There would also be more generous subsidies for some lower-income ACA enrollees. Other provisions would expand Medicaid eligibility and subsidize insurance costs for people who lose their jobs but keep insurance through the COBRA program. These are changes Democrats have wanted to make for some time, and while there might be merit to them, they’re not directly related to the Covid downturn.

 

Increase the minimum wage to $15. (No direct cost.) Sen. Bernie Sanders and other progressive Democrats have been pushing for a $15 minimum wage for half a decade, and they think Biden’s relief bill may finally be the wagon they can ride to passage. But some Democrats think $15 is too high, which means there probably aren’t enough votes for it in the Senate. Democrats could include a lower minimum wage, phased in over time, but there are still technical questions as to whether this would be allowed under the Senate’s reconciliation rules. Odds are Dems will have to take this up in separate legislation.

The final bill might not have everything Biden and his fellow Democrats want, but it will still probably total at least $1.5 trillion in new spending, on many Democratic priorities. Republicans can gripe all they want about a single party dictating sloppy spending, but when they last controlled Congress they passed sweeping tax cuts without a single Democratic vote. In Washington, when you have the power to check off items on your wish list, you do it.

 

https://www.yahoo.com/finance/news/the-good-and-bad-in-bidens-giant-relief-bill-210546323.html

 

GO RV, then BV

 

[TinBadge]

Yeah they care and are worried about us. 
Billions also go to US allies, including $3.3 billion in grants to Israel, $1.3 billion to Egypt, $461.3 million for Colombia, $453 to Ukraine, $700 million to Sudan, $241.4 million for Tunisia, $135 to Myanmar, $130 million to Nepal, $85.5 million to Cambodia, $25 million to Pakistan, and $1.4 billion for a so-called Asia Reassurance Initiative 

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[coorslite21]

It would be refreshing to see a clean bill once in a while.....in this bill, half goes toward covid related items....half is pork...

Very sad!

CL

[TexasGranny]

I have a serious question:  How many of you have been impacted financially by this COVID mess?  Maybe my family is just lucky (although I can't seem to pick the winning lotto #'s). No one in my family has lost their source of income since this started. Some have had to stay home in quarantine because of contact with covid positive co-workers and several members have had the virus and one family member died. One granddaughter was unlucky enough to be looking for her first job after college graduation when this started and just recently found one. She was the only one that suffered loss of income but she was able to draw unemployment for part of the time.

 

This covid relief bill is going to send me $1400 - why?  It will send my brother $1400 - why? Both of us are on SS and pensions. My son's time off work because of Covid and the death of his wife was covered by his personal time benefits at work. Other family members that were off work because of covid quarantine were all paid by their companies. Not sure of the maximum salary cap for the $1400 but the only one that might not be eligible this time is my son. My daughter and S-I-L will each receive $1400 (he is retired/daughter doesn't work). All of my grandchildren(23) will receive $1400 each. Quite a windfall for some as it was last year. 

 

So - WHY are we sending $422 Billion to people, many of whom have not been impacted. I have no problem making sure families that have lost their source of income because businesses have been forced "by the Government" to close down but that is not what we are doing. Didn't anyone learn from last year that the big corporations suck up all the funds allocated for small business - let alone the Universities that received large sums. That would have been okay if they had refunded students for not being able to attend in person classes - but they didn't nor did they refund housing fees even thought the students were sent home. 

 

8 Things You Must Know About Deeply Flawed COVID-19 Package

Feb 22nd, 2021 7 min read

COMMENTARY BY  David Ditch

Key Takeaways

The legislation is stuffed with provisions that have nothing to do with the disease or economic hardship, and in many cases would actually slow the economic rebound.

Such a huge minimum wage increase would destroy jobs and serve as an anchor on the economy rather than a life preserver.

It is riddled with poor economic reasoning, political favoritism, and would needlessly add to the national debt.

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Later this week, the House of Representatives is expected to consider a massive legislative package that is being sold as another relief measure for the COVID-19 pandemic. However, the legislation is stuffed with provisions that have nothing to do with the disease or economic hardship, and in many cases would actually slow the economic rebound and destroy jobs.

Here are crucial facts about the package that Americans should be aware of:

1. It adds over $14,000 per household to the national debt.

The pandemic, coupled with its effects on the economy, led to an unprecedented amount of federal spending. In fiscal year 2020, it was over $50,000 per household. This year we can already expect another $45,000 per household.

Despite the fact that the unemployment rate is 6.3%—which is not ideal, but not a crisis—and despite the fact that COVID-19 hospitalizations are plunging, Democrats in Congress and the Biden administration are pushing for a package that would send spending well above last year’s record.

The total national debt has risen to $27.9 trillion, or more than $215,000 per household. Adding trillions more to the debt adds risks for the future.

Since we are unlikely to see a balanced budget any time soon, every penny of debt on the books today will need to be refinanced. Even though interest rates are now low, we have no way of knowing what credit markets will demand in years to come.

Just as a responsible middle-class household would carefully consider whether to add $14,000 in debt, Congress must be cautious rather than reckless with the nation’s finances.

2. It is a COVID-19 bill that treats COVID-19 as an afterthought.

While combatting the pandemic ought to be the centerpiece of legislation referred to as “COVID-19 relief,” public health represents less than 10% of spending in the package. The legislation throws massive amounts of taxpayer dollars at causes that are barely or entirely unrelated to the pandemic, yet neglects some potentially crucial approaches to bringing the disease under control.

For example, rapid tests for COVID-19 could be deployed for a fraction of the cost of the package, yet would provide a vital tool for individuals and the medical community in preventing unnecessary disease transmission. Unfortunately, the Food and Drug Administration is dragging its feet, having only approved one type of rapid test that will be available in limited quantities later this year.

Operation Warp Speed helped ensure that multiple vaccines were available, meaning multiple manufacturers making as many doses as possible. A similar approach is needed for rapid tests, and leaders should prioritize this public health need above favors for political allies.

3. Its massive education spending won’t actually re-open schools.

The package spends $170 billion on education, which supporters say is meant to re-open schools faster. However, the details show something else entirely.

First, the non-partisan Congressional Budget Office reveals that only about a third of the education funds would be spent between now and September 2022, and that more would be spent in 2026 than 2021. That’s utterly absurd given the urgency of getting children back in classrooms.

Second, about $50 billion in funds for re-opening schools have yet to go out the door, most of which was just passed in December. Considering that youths are at the lowest risk from the disease, and that teachers are receiving preferential treatment on vaccinations, $50 billion should be more than enough.

In reality, the additional $170 billion is a de facto pay-off to teachers unions, many of which are currently issuing unreasonable demands for re-opening schools. Providing the extra funding would reward this counterproductive behavior should be vehemently opposed.

4. It opens the door for taxpayer-funded abortions.

While previous COVID-19 legislation contained standard provisions that prevent federal funding for abortions, those provisions are missing from the new legislation. This means “family planning” money for Planned Parenthood, subsidies for health plans that cover abortions, and even international funding without pro-life protections.

It should be unconscionable that legislation supposedly justified as a way to preserve human life would do the opposite, but this is where we are.

5. Its unprecedented minimum wage increase would kill jobs and businesses.

While lawmakers should pass pro-investment and pro-jobs legislation during a recession, Congress is doing the opposite: attempting to staple a minimum wage increase to $15 an hour onto a package that is supposedly about the pandemic.

Even though the increase would be phased in over four years, it would have an immediate impact on investment decisions. Some businesses would spend more on automation to reduce their number of employees. Others would choose not to invest in opening or expanding, and many struggling to stay afloat would give up and close their doors for good.

All of these outcomes would reduce opportunities for low-skill and inexperienced workers, because jobs lost to a $15 minimum wage won’t be coming back. Rural areas and low-cost states would be disproportionately affected, as would small businesses that don’t have the capital to adjust and automate low-wage jobs.

Consumers would also face higher prices in labor-intensive areas, such as an average 21% increase in the already expensive cost of child care.

Bottom line: such a huge minimum wage increase would destroy jobs and serve as an anchor on the economy rather than a life preserver.

6. It includes opportunistic welfare expansions that create perverse incentives.

The legislation includes benefit increases and expansions for a variety of “safety net” programs, including unemployment insurance, Affordable Care Act subsidies, the earned income tax credit, cash welfare payments, and more.

All of this ignores the fact that federal and state governments already provide an expansive safety net for unemployed and low-wage households at a tremendous cost to taxpayers. The economy is struggling, but is in much better shape than it was during the Great Recession, so there is no meaningful justification for expanding the welfare state.

Worse, expanding the benefits will reduce incentives to find work, marry, or increase earnings, each of which can reduce what the federal government provides to an individual.

Another danger is that these welfare expansions could become permanent, which would harm the nation’s finances and cement anti-work incentives in place.

7. It will give huge handouts to special interests.

The bill includes more than $1,000 per person in funds for state and local governments, despite the fact that federal aid last year dwarfed any localized revenue reductions.

At least $90 billion will be given from the general public to pad out pension plans for private-sector workers, overwhelmingly benefitting Big Labor. The “at least” is because this bailout could balloon to more than twice that amount.

On top of that, $57 billion will go towards the transportation sector in a way that privileges unionized workers.

These three items alone amount to nearly $500 billion that will create far more in political benefits than public benefit.

8. Its $1,400 checks would have minimal economic effect, maximum debt impact.

The biggest item in the bill, $1,400 per person “recovery rebate” checks, is expected to cost over $400 billion. We have plenty of evidence to know that this would be a poor way to stimulate the economy.

First, the vast majority of working-age Americans are employed, and those who are out of work are eligible for boosted unemployment benefits. There is no inherent economic need for nearly universal checks.

Second, Americans increased savings and debt repayment in the wake of last year’s federal checks. While this was the responsible thing for many households to do, it is an irresponsible policy choice at a time of high deficits.

Third, analysis from previous stimulus checks shows that they provide only a small short-term boost to the economy and jobs. Since they add to our mountainous national debt, they will ultimately slow the economy in the long run.

Lawmakers who want to speed up the economic recovery should focus their efforts on reducing the multitude of barriers to work and investment, which would improve the nation’s financial health rather than worsening it.

There are better ways to respond to the pandemic.

Lawmakers responding to the COVID-19 pandemic should work together to enact temporary and targeted measures that will help bring the disease under control and allow the economy to continue improving.

However, this $1.9 trillion package represents a jarring leftward lurch to enact long-standing progressive priorities that have nothing to do with the pandemic. It is riddled with poor economic reasoning, political favoritism, and would needlessly add to the national debt.

Legislators should go back to the drawing board rather than rush to pass this bloated bill.

 

 

[Shabibilicious]

It seems reasonable that people who receive the $1400 who don't need it would put that money back into the economy, at their favorite restaurant, home improvement shop, auto maintenance, etc.....All of which helps keep people employed.  

 

GO RV, then BV

 

[TinBadge]

1 hour ago, Shabibilicious said:

It seems reasonable that people who receive the $1400 who don't need it would put that money back into the economy, at their favorite restaurant, home improvement shop, auto maintenance, etc.....All of which helps keep people employed.  

 

GO RV, then BV

 

Yeah! That’s the whole idea of stimulus. When enough people hoard money under the bed show signs of decline. (A bank gives me .01% interest, why put it in the bank). If everyone spends their money the economy booms. The fed then makes adjustment on either part to control it. That’s way a fiat system will always fail after enough time. 
 

There are deeper definitions to both parts but you can search why economies boom and bust.