Joe Biden does indeed want to go big. The president-elect is proposing a new, $1.9 trillion coronavirus relief package on Thursday night as the first item on his to-do list in office, a plan aimed at speeding up the vaccination rollout while providing vast amounts of financial support to households as well as state and local governments.
Of course, the proposal includes checks. Biden would top off the last round of cash payments Congress approved in December with an extra $1,400, bringing the total to $2,000 per individual (the payments still phase down and eventually disappear for higher earners). He would also bump the federal unemployment insurance supplement from $300 to $400 per week, and extend it all the way to September, instead of allowing it to expire in March. There’s an additional $130 billion for schools, and $350 billion in emergency funding for state and local governments, with more for transit systems. There is additional money for small businesses, child care, emergency paid leave, rent relief, and utility bill relief. It would also extend the federal eviction moratorium into September.
This is a piece of legislation that meets the demands of the moment. One way to think about it is that America’s output gap—basically, the economic dent created by 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 is also taking a prudent approach. The bill Donald Trump signed last month was only really designed to carry the country until the spring; if the vaccine rollout went slower than expected (as it in fact has), many Americans would have been left financially high and dry before they could go back to work. The Biden plan is meant to get shots in arms faster and provide an economic lifeline for Americans at least until the fall. He’s taking the precautionary principle about the crisis, without sweating the deficit.
Biden also slips some long-term policy goals into the plan. He will ask Congress to beef up Obamacare’s insurance subsidies, and increase the federal minimum wage to $15 an hour. The president-elect will also seek to increase the value of the Child Tax Credit to $3,000 for older children and $3,600 for those under six, while making it fully refundable—meaning the poorest families will for the first time be able to receive the entire credit as cash, even if they don’t owe any income taxes. The changes to the credit would only last for one year, but the vast majority of Democrats have backed permanent versions of the reform, and Biden’s temporary move could set the stage for a major, long-term expansion of the welfare state.
This is only Act I of Biden’s COVID response. As a follow-up next month, he is promising to present an infrastructure and green energy bill that will provide long-term stimulus for the economy. There is no shortage of ambition here.
There are, however, some big question marks hanging over how Biden will actually get this plan through Congress. At the moment, 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. That seems far-fetched. After all, the majority of Republicans spent the entire summer and fall resolutely rejecting any kind of a deal that involved aid for state and local governments, and the GOP tends to oppose ideas like a $15 minimum wage or expanding Obamacare. It’s hard to imagine that there are 10 GOP votes in the Senate that would help break a filibuster on this proposal.
During a call with reporters, a senior administration official said that the strategy for convincing Republicans to sign on was to “make the case clearly about the immediacy of the need.” But moral suasion does not exactly have the greatest track record with the GOP (see: the party’s response to last week’s insurrection). Granted, almost everybody in the media, myself included, has underestimated Biden at some point or another, so it’s entirely possible he knows something the rest of us don’t. But 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? Will he spend precious time fruitlessly trying to court them, before resorting to reconciliation? Or is this mostly just a self-aware feint toward unity from a man who campaigned on bringing Americans together, but knows he’ll probably need to pass his agenda on a party-line vote? Hopefully we won’t burn too much time waiting to find out.
