Victor Reklaitis Robert Schroeder
President-elect Joe Biden on Thursday rolled out a coronavirus relief plan with a price tag of $1.9 trillion, a sweeping measure that includes cash payments to Americans and money for distributing COVID-19 vaccines.
“I know what I’ve just described does not come cheaply, but a failure to do so will cost us dearly,” Biden said in a speech at a Wilmington, Del., theater following the plan’s release.
“The consensus among leading economists is we simply cannot afford not to do what I’m proposing. Independent, respected institutions from around the world, from the Federal Reserve to the International Monetary Fund, have underscored the urgency. Even Wall Street firms have reinforced the logic.”
The address came less than a week before Biden is slated to be inaugurated as president, and a day after the House of Representatives voted to impeach President Donald Trump for a historic second time.
The plan calls for increasing direct payments to $2,000 from the $600 already hitting Americans’ bank accounts, meaning additional stimulus checks of $1,400 would go out. The president-elect said before Georgia’s Jan. 5 Senate runoff elections that victories by Democrats Raphael Warnock and Jon Ossoff would lead to the bigger payments .
Biden’s proposal would provide $20 billion for a national vaccination program, $50 billion for COVID testing, and $350 billion for state and local governments. It also aims to deliver $130 billion to help schools reopen, $35 billion for higher education and $5 billion for a “Hardest Hit Education Fund.”
In addition, his “American Rescue Plan” calls for boosting supplemental unemployment benefits to $400 per week through September, as well as raising the minimum wage to $15 per hour and extending moratoriums on eviction and foreclosure on federally-guaranteed mortgages to Sept. 30.
Other pieces of the wide-ranging plan are an expansion of emergency paid leave and an increase in the child tax credit to $3,000 per child, or $3,600 for a child under the age of 6.
Biden emphasized during his speech that millions of Americans have been hammered by the COVID crisis even as financial markets perform well, saying not only the state of the economy but American values dictated the actions he is proposing.
“There is real pain overwhelming the real economy,” he said. “You won’t see this pain if your scorecard is how things are going on Wall Street. But you will see it very clearly if you examine what the twin crises of a pandemic and this sinking economy have laid bare — the growing divide between those few people at the very top, who are doing quite well in this economy, and the rest of America.”
CNN said early Thursday that the president-elect would propose a spending increase of roughly $2 trillion, in a report that helped to send the yield on the 10-year U.S. Treasury note (XTUP:BX:TMUBMUSD10Y) higher on the prospect of even larger fiscal deficits and increased debt issuance. U.S. stocks (S&P:SPX) (DOW:DJIA) closed with modest losses ahead of Biden’s evening speech, after trading in the green for most of Thursday’s session.
Biden is scheduled to be inaugurated on Wednesday, but the new Democratic president may face a challenge in moving quickly with his legislative agenda if the Senate is consumed with an impeachment trial of his Republican predecessor.
Earlier this week, Biden said he’d asked if the Senate could “bifurcate” its schedule to deal with impeachment and his agenda simultaneously.
Democratic Sen. Chuck Schumer of New York, set to become majority leader next week, said in an interview published Monday that the chamber can work on both issues at the same time. “We’re going to have to do several things at once but we got to move the agenda as well,” Schumer told the Buffalo News.
Biden has rolled out his plan as the tally of U.S. COVID-19 cases has topped 23 million, and the latest Labor Department data showed jobless claims surging to a five-month high as more workers lost jobs due to business closures and restrictions to combat the pandemic’s winter resurgence.
As part of his plan to fight the pandemic, Biden has said he will release available vaccine doses after coming into office on Jan. 20, instead of keeping some in reserve for second doses. He called the federal vaccine rollout to this point “a dismal failure.”
Beacon Policy Advisors analysts said that while they believe Biden will try to advance a coronavirus package on a bipartisan basis, they expect pressure on the president-elect to use a process known as budget reconciliation to push through new aid. Budget reconciliation is a procedure allowing legislation to be passed using a simple rather than two-thirds majority in the Senate.
“Ultimately we expect congressional Democrats, led by Schumer and House Speaker Nancy Pelosi [of California], to convince Biden that the only practical route to achieve the level of assistance that Democrats believe is necessary is via the reconciliation process that only requires a simple majority in the Senate, thus allowing Democrats to pass the legislation on their own — if they can reach unanimous agreement on its specifics among themselves,” Beacon analysts said in a note.
Democrats continue to have control of the House of Representatives but also are set to run a Senate that is split 50-50 because Democratic Vice President-elect Kamala Harris will cast tiebreaking votes.
“We will get right to work to turn President-elect Biden’s vision into legislation that will pass both chambers and be signed into law,” Pelosi and Schumer said in a joint statement, adding that they “hope that our Republican colleagues will work with us to quickly enact it.”
Some Republicans already were signaling opposition, with the Republican Study Committee, a group of conservative House lawmakers, tweeting that the “stimulus checks in Biden’s ‘relief’ plan cost as much as the inflation adjusted cost of World War I.”
During his speech, Biden said that on Friday he will lay out his vaccination plan and then next month, before a joint session of Congress, will roll out a “Build Back Better” recovery proposal that will serve as the second part of his “two-step plan to build a bridge to the other side of the crisis.”