Government Spending

The 'COVID Relief Bill' Is Mostly an Expensive Bundle of Politically Motivated Giveaways

The Senate is preparing to pass a $1.9 trillion COVID-19 relief bill that has very little to do with the pandemic, and we all know it. Congress should admit as much.


As the Senate prepares to take a final vote on President Joe Biden's $1.9 trillion COVID-19 relief bill, it's time to be honest about one thing.

This isn't a COVID-19 relief bill. We should stop calling it that.

It's true this bill is moving through Congress at the same time that COVID-19 relief is sweeping the country. With the number of new cases, hospitalizations, and deaths falling all across the country while vaccination totals soar, it feels like the end of the pandemic could be right around the corner. Biden said this week that vaccine supply will be sufficient to cover all adult Americans who want a shot by the end of May. Some states are lifting economic lockdowns and behavior restrictions. Sweet, sweet relief is coming.

But let's be very clear about this: It is not coming from Congress.

No, the bill that the Senate is likely to pass this week is a larded-up bounty of mostly Democratic policy goals that will add $1.9 trillion to the federal budget deficit—yes, every last penny of this beast is being added to the national credit card.

Only about 5 percent of that total is funding public health efforts related to the pandemic, according to the nonpartisan number crunchers at the Committee for a Responsible Federal Budget (CRFB). There are a few other things in the bill that could be counted as "relief," like the $7 billion for the Paycheck Protection Program (PPP) and another $40 billion in emergency loans for restaurants, bars, music venues, airlines, and other industries. Those payments and programs aren't all necessary but, as The Wall Street Journal notes, at least recipients will have to demonstrate economic losses to get the money.

Beyond that, however, this bill is a steaming pile of government handouts and special interest giveaways.

A sizable portion, about $500 billion, is a bailout of state and local governments that for the most part do not need one. While state tax revenues took a small hit from the pandemic and associated economic lockdowns, the damage is far smaller than was once feared. States should handle their own finances.

But it's not just a bailout; it's a bailout in which the funding is allocated based on the size of each state's unemployed population. In other words, states that imposed draconian and unnecessary economic lockdowns during the past year are going to get a larger share of the federal cash than states that managed to balance public health needs and the economy—an arrangement that New Hampshire Gov. Chris Sununu rightly calls "outrageous."

Another $400 billion of the bill's spending would provide an additional round of stimulus checks to Americans who haven't lost their jobs or income due to the pandemic. The version of Biden's bill passed last month by the House would fund $1,400 in direct payments to individuals who earned up to $100,000 last year and couples who earned up to $200,000—though there is now a push to modestly reduce the phaseouts to $80,000 and $160,000, respectively.

Those limitations will save about $50 billion, but they hardly go far enough. There is no reason for Congress to be sending checks to families that earn six-figure incomes and have experienced minimal financial losses due to the pandemic. If putting more money in Americans' pockets is a priority for Congress, it should accomplish that goal by reducing income taxes (and cutting an equal amount of future spending) on a permanent basis, not by engaging in deficit-hiking games merely because "free" money from the government is politically popular.

The bill spends $129 billion on K-12 education—money that you might assume is being used to reopen schools quickly and safely. Wrong. A Congressional Budget Office (CBO) analysis of the bill found that "the bulk" of those dollars wouldn't be spent until "after 2021." Some of it won't be distributed until 2024.

That same CBO report also estimates that a total of $480 million in the bill will be spent on "miscellaneous" educational matters like "grants to fund activities related to the arts, humanities, libraries, and museums, and Native American language preservation and maintenance." Even if those are items that might be worth spending federal tax dollars to support, it's difficult to understand how they are "COVID-19 relief" by any meaningful definition of the terms.

The same is true for the bill's funding of a new subway in San Jose, California, and the new bridge connecting New York state to Canada—top priorities of House Speaker Nancy Pelosi (D–Calif.) and Senate Majority Leader Chuck Schumer (D–N.Y.), naturally, but not anything that belongs in a pandemic relief bill.

Like the education component, the bill's extension of boosted unemployment benefits through the end of August might seem like something directly related to the pandemic. But those federal payments would increase from $300 per week to $400 per week—that's on top of whatever unemployed workers are getting from state-run programs—at a time when the unemployment rate is falling.

"This makes little sense," according to an analysis from the CRFB, because it means "two-thirds of beneficiaries would collect more in benefits than they would collect in paychecks" and it is likely to slow the economic recovery, not stimulate it.

Speaking of being paid not to work, the bill also includes a $14 billion provision creating a new paid family leave program—one that applies only to employees of the federal government. As Reason's Billy Binion noted earlier today, the program allows federal workers to collect benefits if they have children attending schools that are closed due to COVID-19. In other words, federal employees get paid to stay home with their kids, while everyone else tries to juggle a full-time job and being a substitute teacher.

Note that this special giveaway to federal employees is being funded with twice as much money as the PPP, which is ostensibly meant to provide the same sort of ongoing financial support for private-sector employees who can't work due to the pandemic. That really says something about congressional priorities.

The bill spends another $86 billion to bail out multi-employer pension funds, which are retirement accounts operated by private sector unions on behalf of their members. Many of these retirement accounts are deep in the red—but even if there is a good reason for federal taxpayers to pick up the tab, what does this have to do with the pandemic?

For now, the bill also contains an increase in the federal minimum wage to $15 per hour. That would be a job-killing policy that can't be accurately described as "COVID-19 relief" or "stimulus"—and thankfully it appears likely to be stripped from the bill.

Maybe the most telling example of how far removed from "COVID-19 relief" this thing has strayed is Sen. Jeanne Shaheen (D–N.H.) suggesting that the bill's bonus unemployment benefits—which are paid to people who have lost their jobs due to the pandemic to which the bill is ostensibly providing relief—could be curtailed so more money can be spent on rural broadband subsidies. In other words, Shaheen thinks Congress should provide less money to unemployed Americans now so that those dollars can be dumped into a federal boondoggle in the hopes of bringing slightly faster internet service to rural New Hampshire in a few years.

I could go on, but you probably get the point. Calling this a "COVID-19 relief bill" is ridiculous.

About the only COVID-19 relief that most Americans need right now comes in a syringe. Once we hit a critical mass of immunity from vaccinations, and state and local governments lift economic lockdowns, the stimulus will happen without any help from Congress. In the meantime, lawmakers should work to provide aid to businesses and individuals facing ongoing economic hardship, and that's all.

Using the waning pandemic as an excuse for a spending free-for-all when the country is $28 trillion in debt is beyond irresponsible. And trying to pass off this bloated list of politically motivated handouts as essential to America's public health is dishonest and cowardly.