President Joe Biden's $1.9 trillion COVID-19 relief bill took its first major step toward passage over the weekend. But political circumstances and the current state of the pandemic suggest that Congress ought to reconsider this approach.
In comments to reporters on Saturday, Biden urged the Senate to take "quick action" to pass the bill after the House of Representatives passed it in the early morning hours that same day.
"We have no time to waste," Biden said, according to a pool report. "If we act now decisively, quickly, and boldly, we can finally get ahead of this virus. We can finally get our economy moving again. And the people of this country have suffered far too much for too long. We need to relieve that suffering."
Biden has been pushing this message since before he was inaugurated—the basic framework of this $1.9 trillion stimulus bill was announced in early January. He and congressional Democrats have touted the package as an urgently needed response to a still-out-of-control pandemic, a necessary step to getting schools reopened, and a way to help jobless Americans make ends meet until a full recovery is achieved.
That message is at odds with much of the bill itself, which is larded up with things like an increase to the federal minimum wage, funding for a new subway in San Jose, California, and billions of dollars in supposedly urgent school funding that wouldn't actually be used for years to come. About $312 billion of the bill's overall spending has nothing to do with the pandemic at all, according to an analysis by the nonpartisan Committee for a Responsible Federal Budget (CRFB), including changes to tax credit programs for parents and an expansion of the Affordable Care Act's health insurance subsidies.
The package would also spend about $500 billion bailing out state and local governments, far in excess of what would repair COVID-19 budget holes. The American Enterprise Institute, a conservative think tank, estimates that states and local governments need about $100 billion in direct aid, while the Center for Budget and Policy Priorities, a progressive think tank, has called for $225 billion in aid. Part of the discrepancy is due to the fact that the Biden plan was built around the assumption that state budgets would be facing an 8 percent decline in revenue this year. The Wall Street Journal reports that state tax revenue declined by a mere 1.6 percent instead.
Beyond all that, a clear-eyed assessment of how the federal government should respond to COVID-19 in March 2021 must also take into account the fact that the pandemic is clearly ebbing. This weekend saw new daily records for vaccinations and the approval of a third vaccine by the Food and Drug Administration, a development that promises even more vaccine supply in the weeks and months ahead. New cases, current hospitalizations, and daily deaths have fallen to levels not seen in months. It's not over yet, of course, but the current situation seems significantly different from where things stood in early January.
Senate Democrats appear willing to make some changes to the bill before putting it up for a vote. The much-discussed minimum wage increase is likely to be removed now that Senate Parliamentarian Elizabeth MacDonough has ruled that the wage hike could not be passed with a simple majority via the reconciliation process. Meanwhile, CNBC reported on Monday that Senate Democrats are abandoning plans to include a backdoor minimum wage hike that could have been accomplished by revoking tax breaks from businesses that pay workers less than $15 per hour.
It's good to remove a job-killing proposal that's completely unrelated to the pandemic. Still, more could be done. Given current economic and COVID trends, Congress could revisit a smaller, bipartisan proposal that Democratic leaders rejected in early February for being insufficiently expensive. That earlier plan would have spent about $618 billion, with the funding focused on direct payments to many Americans, expanded unemployment benefits, and money aimed at reopening schools.
Now Rep. Peter Meijer (R–Mich.) is touting a revamped version of that proposal as the Direct Dollars Over Government Excess (DOGE) plan. (Yes, it's named for that dog meme.) Meijer contrasts it with the Biden bill, which he calls a "grab bag of gifts for special interests."
Meijer's plan would send direct payments of up to $2,400 to individuals who earned less than $50,000 last year and households that earned less than $100,000. That's $1,000 more per person than the Biden plan would provide, but with payments phasing out at lower levels. The DOGE plan would also extend the boosted federal unemployment payments of $200 per week (down from the current level of $300 per week and Biden's proposal of $400 per week) through the end of July.
Meijer says his proposal would cost about $992 billion. That means removing the chaff from the House-passed relief bill could save as much as $1 trillion from being added to the national debt—and every little bit helps, considering that COVID-19 emergency spending has already added about $3.3 trillion to the deficit, according to the CRFB.
Needless to say, Senate Democrats are unlikely to seriously consider any alternative to the House-passed bill at this stage. We're likely instead to see some much more modest tinkering, after which the Senate will send the Biden plan back to the House, which will then pass the new version and send it to the president's desk.
And you can expect that to happen pretty quickly now. The longer Congress delays, the more apparent it will become that the need for a major bill has evaporated.