Coronavirus

Biden's Coronavirus Relief Plan Will Probably Cost a Lot More Than $1.9 Trillion

The pandemic relief bill isn't just a one-time splurge. It's the start of a new era of federal spending. 

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Looked at one way, the American Rescue Plan, President Joe Biden's $1.9 trillion economic intervention, is just another pricey COVID-19 bill in a series of them—another one-time injection of funds into an economy in crisis. Biden has repeatedly agreed that the plan is fundamentally about quick, emergency relief, an in-the-moment, temporary measure to beat back the pandemic and get the economy going. 

Over the long term, however, it's likely to be much more than that—more expensive and more permanent than the headline figures make it sound. And it portends an even greater expansion of federal power to come. 

Like previous bills, Biden's plan includes a round of checks for American households, with as much as $1,400 going to individuals making as much as $80,000 annually, and couples with total incomes of up to $160,000. It extends an existing federal boost to unemployment insurance payments and includes money for states, for primary education, for airlines, and for a grab bag of Democratic priorities, many of which predate the pandemic. 

For example, the plan funds an $86 billion bailout to multiemployer pensions. The plan props up underfunded pension schemes for about 185 unions, many of which had relied too heavily on risky investments rather than worker contributions. The pensions were melting down long before COVID-19 became a threat: As The New York Times dryly notes, the bailout represents an aid package that "has nothing to do with the pandemic." 

That's typical of this bill, which is heavy on handouts to a slew of Democratic constituencies. Teachers unions have been clamoring for an infusion of federal funds, arguing that such funding is essential for reopening classrooms for in-person instruction. 

So the bill includes about $130 billion in primary education funding. But very little of that money—only about $6 billion—will be spent this fiscal year, in part because previous coronavirus spending bills provided more than $100 billion in education money. This isn't funding that will be used to reopen schools now; it's a slush fund that will balloon federal education spending for years to come. In the process, it will create a new baseline for federal education funding, one that will likely be hard to scale back. 

Which is why this isn't just another spending bill: It's a revolution in the federal approach to social programs, or at least the start of one. It's designed to kickstart an expansion of pricey federal social programs, particularly on children and health care. 

For example, the bill includes a $34 billion boost to Obamacare's private insurance subsidies, designed in part to remedy a problem that the health care law helped create: Plans sold through Obamacare's exchanges tend to be fairly expensive, and thus unaffordable for those who don't qualify for subsidies. Biden's recovery plan boosts subsidies and makes higher earners—in some instances households earning well into six figures—eligible for federal assistance.  

For now, this boost is temporary, lasting just two years. But there's little doubt that Democrats will push for the additional spending to become permanent. Over time, that nominally temporary $34 billion could end up costing more like $160 billion, according to the National Taxpayers Union Foundation. This isn't emergency aid; it's a likely permanent expansion of Obamacare, smuggled in under the guise of pandemic relief. 

The same goes for the plan's expansion of the child tax credit. As a result of Biden's plan, most parents in the country will receive a monthly check of up to $300 per child. Like the Obamacare subsidies, this too represents a temporary boost. Under the current plan, the program lasts for just one year, at an on-paper cost of about $100 billion.

But as with the Obamacare subsidies, there is every reason to expect that Democrats will push to extend the plan, setting up a permanent system of checks to parents, at a true cost closer to $770 billion, according to NTUF. 

Again, I will refer to the way the child tax credit plan is described in a New York Times news—not opinion—report: "The child benefit has the makings of a policy revolution. Though framed in technocratic terms as an expansion of an existing tax credit, it is essentially a guaranteed income for families with children," similar to programs found in other countries.  

A guaranteed income. A policy revolution

Biden's recovery plan isn't just (or even mostly) pandemic relief. And it's not just a one-time infusion of cash to Democratic supporters and political allies.

It's the start of a new era of federal largesse, one that will move more Americans onto government support, perhaps for a long time to come.

Although it differs in the particulars, in some ways this represents a return to the sort of welfare system that President Bill Clinton and congressional Republicans reformed in the 1990s. Those reforms were judged successful because they resulted in dramatic reductions in the number of people on welfare. 

Less than two months after his inauguration, Biden, with the help of congressional Democrats, is reshaping the American economy. And there's more to come: Influenced by union wish lists, Biden has, according to a recent Times report, expressed a desire to pursue a new industrial policy, with federal job supports, energy restrictions, and trade barriers. The headline on the report? "The Biden team wants to transform the economy. Really." 

Biden campaigned as a moderate, opposed to the big-spending, heavy-handed, progressive radicalism of rivals like Sen. Bernie Sanders (I–Vt.) and Sen. Elizabeth Warren (D–Mass.), who insisted that what America really needed was "big, structural change." Biden, in contrast, merely wanted to return to normal. 

But in his opening legislative bid, he's made clear: There is no return to normal. Big structural change is upon us, backed by Biden and Democrats in Congress. This is only the beginning. 

NEXT: Californians Rejected a Harsh Law That Destroyed Freelance Jobs. Congress Is Trying To Make It Federal Law.

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  1. At least it is not the start of a new era of mean tweets.

    1. Reason cares about mean tweets. Sometimes they pretend to care about other stuff but we don’t believe them.

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  2. “Biden campaigned as a moderate, opposed to the big-spending, heavy-handed, progressive radicalism of rivals like Sen. Bernie Sanders (I–Vt.) and Sen. Elizabeth Warren (D–Mass.), who insisted that what America really needed was “big, structural change.” Biden, in contrast, merely wanted to return to normal.

    But in his opening legislative bid, he’s made clear: There is no return to normal. Big structural change is upon us, backed by Biden and Democrats in Congress. This is only the beginning.”

    And if you believed him, despite all the evidence to the contrary, including his own campaign website and a series of endlessly documented contradictions covered day after day by everyone else that was paying attention, you are a fucking moron. There is no excuse for this degree of willful ignorance.

    You motherfuckers stumped for Biden. Fuck you. Live with it.

    1. The thing is, he didn’t even campaign as a moderate. That’s a narrative that only the MSM and those at reason pushed. Go read his campaign website, it isn’t moderate. He promised to be liberal. It was the media trying to hide his open and published plans that pushed the narrative of him being moderate. Reason was complicit in this.

      1. This. It’s amazing that a small group of commentators on this website saw all this coming, and railed against it for a year leading up to the election, yet no one who’s paid to see such things did. Or they did and lied about it because they’re juveniles ruled by emotions.

        1. They lied about it. The fracking thing is a perfect example, as is the Keystone pipeline situation. Biden literally said what he planned to do, the media swooped in with a brilliant take that, akshually, he never said it, people voted for him believing he never said it, and then he when did it …. because he said he was going to do it … everyone is suddenly shocked.

          For all of the shit Trump got about “inverting” reality, the shit the media pulled with Biden was straight out of 1984. There are a lot of retards in this country. A LOT.

          1. and gun regulations are sliding under the radar with all the other governmental distractions and it seems the media is keeping quiet about it as well

            1. https://twitter.com/disclosetv/status/1370124356236550148?s=19

              NEW – Feinstein, Democrats introduced a bill to ban assault weapons and high-capacity ammunition magazines just hours after U.S. House passed major new gun control laws.

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          2. Vehicle Fuel is up by 1/3. Just got a huge rate increase for LP gas to heat my home. I saw this coming.
            No problem, the green solution is to install a wood burning stove. By green, I mean that it will save me money blowing massive amounts of carbon into the air.

          3. These first few posts need screenshotted and emailed/tweeted at every reason staffer, every day, forever.

            This entire magazine can be summed up in just the first few posts of this thread.

      2. He literally said he would be the ‘the most progressive president in history’ in Feb of 2020.

        https://www.newsweek.com/joe-biden-says-hed-most-progressive-president-history-tells-bernie-sanders-disown-1487567

        Screw Reason, they are as libertarian as Biden is moderate.

    2. Drat that twelfth amendment. We could have Trump back in a few weeks.

  3. Biden was a Trojan Horse; a dunderheaded, sleepy looking old fuck of a Trojan Horse. And 51.3% of the electorate either chose to believe that or actually wanted to live in an over extended and inevitably bankrupt, intrusive, and overreaching welfare state.

    1. He was not a Trojan horse.
      Everything his administration is doing, was clearly spelled out in the democratic party platform, and described in campaign literature.

      1. They pivoted from “he’s just pandering to the base” to “oh shit, he’s actually doing it” real fucking quick — because they’re morons.

      2. A trojan horse in the sense of pretending to be any kind of “moderate” who just wanted to “unify” the country and return to “normalcy.” AKA not Elizabeth Warren or Bernie Sanders.

        And no I did not buy it for a second either, but then as I stated many did either because they loathed Trump or actually hoped for just this kind of largesse.

        In the end it won’t matter which of the D’s won, it will all be the same.

      3. Meat puppet maybe?

  4. But in his opening legislative bid, he’s made clear: There is no return to normal. Big structural change is upon us, backed by Biden and Democrats in Congress. This is only the beginning.

    “And we, the fake libertarians of Reason, support all of it 100%, though we don’t have the balls to come out and directly say so.”

    1. I almost felt sorry for Biden. The screeching Karens that seem to make up his entourage started yelling to hustle everyone out of the room, and Biden looks confused as to what the problem is.

      1. That isn’t saying much.

        1. That’s why it’s the best hashtag ever.

    2. I’ll take 50% of brain-dead over a 100% liar and con man.

      1. Aren’t you the kid fucker?

        1. Kid fuckers like ’em incoherent, doncha know.

      2. Biden is all 3 retard.

      3. Of course you would, cause you’re a den shill.

    3. Drill down in the comments and you will find that any suggestion that Biden has dementia is “ableist and mean,” and the people making these comments are “bullies.”

    4. My Grandfather lived for years like that. Biden has a long, bumbling, drooling life ahead of him.

    5. Oh yeah. He’s like the doofy kid that chases bugs and eats them in the outfield in little league.

  5. FAKE NEWS!!!

    The actual Communist Chinese Virus relief in that bill was less than 10% of the stated number.

    TRUE NEWS!!!
    The fascists will continue to pass spending bill after spending bill, and take away rights allegedly guaranteed by the US Constitution they swore an oath to defend.

  6. Look, Mr. Buttplug is the most accomplished financial expert in this comment section. And he says the Democrats are now the fiscally responsible party.

    So don’t second guess yourselves now, Reason writers. You were absolutely correct when you overwhelmingly endorsed Biden.

    1. >>You were absolutely correct when you overwhelmingly endorsed Biden.

      i love you, thing.

  7. “Biden’s Coronavirus Relief Plan Will Probably Cost a Lot More Than $1.9 Trillion”

    Buttplug’s narrative hardest hit.

    1. Actually Buttplug was just pointing out how right he is to support Democrats because the 2021 GDP number is looking great and Biden deserves all the credit.

      #GDPAboveAll

      1. https://www.frbatlanta.org/cqer/research/gdpnow

        8.4% growth for Q1.

        I guess if you throw $5 trillion out there in 12 months it has an effect.

        1. WOW!!!!!! That’s amazing!

          Remember those numbers you copy / pasted multiple times showing how Obama created the strongest 8-year run in US economic history? I think the pattern went something like, 1-term Presidents (Carter, GHW Bush, Drumpf) failed to hit 2% annual growth, while Obama’s rocketed past 3%?

          Anyway, do you think Biden might actually beat Obama’s record-shattering performance? I’m no mathematician but if Biden can sustain this torrid pace it seems like he might pull it off.

          #BestEconomyEver
          #(Again)

        2. And what policies were signed by biden to reach that growth? You really are fucking retarded.

  8. try enough honesty to not call it a coronavirus relief plan

  9. Could have just given it all to corporations like the Dotard did with his $2 trillion CARES Welfare and Handout Plan for Trump reelection that Nancy Pelosi tricked him into signing Bill.

    PISSING OUR TAXES AWAY!

    (both parties suck)

    Unlike you Peanuts I don’t shill for a TEAM!

    1. Yes, giving it to your preferred special interests is so much better than giving it to someone else’s preferred special interests. Welcome to politics.

  10. And you all thought Joe Biden would govern from the center.

    Suckas.

  11. And now we have a firm grasp on the obvious.

    Thank goodness I checked in today.

    1. don’t be so quick w/the cred, he still believes this:

      >>Biden campaigned as a moderate

  12. Man, I haven’t seen this much complaining about the 2 trillion hit the debt took when Rs gave all their rich buddies tax breaks.

    It’d be nice if you were even handed about your criticisms of spending money.

    1. Tax breaks do not cause over spending. The Gov stealing less money is a good thing.

    2. Wow. Retards are still saying the tax cuts were only for the rich when even wapo doesn’t go there.

    3. Do you usually peddle in such false narrative talking points? Or are there times where you actually address an issue substantively?

  13. Nothing to see here, move along. This is just the first step on the way to Communism – make the masses dependent on priviliged overlords. Step two is devalue the dollar. Step three voters approve conversion to a totalitarian communist regime.

  14. “I hope everyone remembers when they’re getting the COVID-19 (often referred to as the China Virus) Vaccine, that if I wasn’t President, you wouldn’t be getting that beautiful ‘shot’ for 5 years, at best, and probably wouldn’t be getting it at all.”

    Donald Trump

    1. You are like the washed up late night hosts clinging to the same, tired, unoriginal crap. I expect it though. The Teabaggers were the same way about Obama, and the liberals were the same way about Bush. You will notice that people stop answering the phone.

  15. A $1,000,000,000,000 here and a $1,000,000,000,000 and pretty soon you’re talking real money.

  16. OMG! My Republican State that allowed everyone to breath on each other and “mask-less” county of 25,000 has 18 people with COVID!

    0.072% of the population — What a crisis! Almost as bad as that one protestor who tossed a fire extinguisher and caused an insurrection!

    Only Gov-God “saviors” can save us from this horrible, horrible, horrible world.

  17. Where does this end?

    $1.9 Trillion dollar Federal “stimulus” plan is the latest of “stimulus” plans since the 2008 Financial “Crisis”. Closing on $25T in total US government debt. The US Treasury will have to borrow this massive given the non “stimulus” Federal budget is in deficit. Where will the money come from? What impact to the economy and prices will dumping $1.9T more in spending cause? Could it lead to a speculative bubble and/or inflation? How is it ever paid back? What is the government’s response at the next recession or “crisis?”
    It doesn’t matter. None of it matters. The country is a on a path which even if the GOP again takes power (which is doubtful) there is no turning back. Accept it. Accept a country where the well connected enrich themselves. Accept a country where unprofitable industries and sectors are protected and subsidized. Accept a country where tribalism is supreme and “domestic enemies” are targeted to stifle dissent. Where everyone depends on politicians and public sector elites in order to make a living. Where “elites” like “economists” and “social scientists” berate any questioning of narratives when facts say otherwise. Also expect there this will lead.
    You can’t spend what you haven’t worked for or will work for. Even if you borrow money you have to work to pay it back with savings. It’s basic. It keeps everything fair, people honest. It differentiates America from say the old Soviet Union or any communist state.
    Government can borrow money, but someone has to lend it. The lenders can lend into the private sector or government. The more government wants to borrow the higher demand and hence the higher interest rates. Historically this was the “check and balance” preventing government from buying votes and creating a crony state. “Bond vigilantes” would keep politicians in check. Obviously if government wants to increase spending it can raise taxes but that would end the “free lunch” pretty quick as more and more American ask why say HUD or HHS exist in the first place. Or for that matter, why we are fighting so many wars. The GOP also played a role prior to 1980 in pushing back on deficit spending. Those days are long gone and they won’t return.
    For over 30 years the Federal Reserve has recklessly used its magically money printing machine to fund the government’s run-away spending. Sure, China helped buy some of the debt (the reason why both political parties love “free trade” with China. They sell us cheap stuff and with the dollars we give them they buy government debt. A great deal for DC elites but not so good for the American who lose their good paying factory jobs but heck in their small town a Dollar Store opens so they can now buy cheaper goods from China-with their unemployment check from the government).
    But its now the Federal Reserve buying government debt direct. Debt that can never and will never be paid back only rolled over. As the “Fed” buys they can manipulate the interest rates, so the mandatory interest payments don’t crowd out Social Security, Medicare, Medicaid, Defense, and the rest of the Federal Government. How long can this last? Normally inflation from all the printed money would stop any “benefit” from deficit spending but offshoring the dollars to China buys the US time. It’s a vicious cycle (printing money, inflation, more printing money) that took down Rome. Usually, a war helps to inflate the debt away but globally people are most likely not willing for massive conscription and deaths anymore. While how this all ends are not predictable, it will end. Maybe in 10 years maybe in 100.
    What can be predicted with high probability is a coming political insurgency in America.
    As the political elites continue to consolidate control through buying votes and woke indoctrination, normal political dissent will disappear at least superficially. Driven into fear for their jobs by government using “woke” Cultural Marxism, most people will not question vocally the new authoritarian state. And it will be an authoritarian state. Free speech will be “fair speech.” The Bill of Rights will be considered “white privilege.” Major parts of America will be “occupied.” For many living in California, New York, Illinois, and other “blue states” this is true today. Truth will be an enemy and not to be uttered. But with every occupation comes a response.
    Superficially many “oppressors” groups will go along. Nod in agreement as HR departments spew leftist hate speech. But the truth can’t be destroyed. These multitudes like the Vietnamese or Iraqis won’t at first challenge the authoritarian state that America has become but when small completely marginalized groups do start to protest and rise up, more and more Americans will start to help them. Not overtly at first but like any native population occupied a popular insurgency will erupt. And slowly more and more Americans will come out of the shadows to join. No occupation has ever been successful. No counter insurgency has ever worked. And those that are marginalized are smarter and more talented than the authoritarian public elites.
    Will the protests be peaceful, or will we see armed conflict starting with asymmetric fighting? Who knows? But their will be an insurgency.
    What about the “two party” checks and balances? The GOP is dead. They abdicated any ability to keep the Democrats in check and halt authoritarianism decades ago when they adopted “supply side” politics which is what it was. Cut taxes and increase spending. And go on global expeditions to find “monsters to destroys. They became Democrats.
    We have a long night as the woke authoritarians consolidate power in America, but they won’t win. The cultural Marxists and socialists have been very efficient in taking power, but they will lose, and America will be done with them. In some ways this was “old world grudges” which invaded America and turned us against each other. But we are the new world not the old.

    1. It will end well past $50 trillion in debt before 2030. Because of all the added pork, the Democrats will have to spend $$trillions more to buy the vote next time around.

  18. “The pandemic relief bill isn’t just a one-time splurge. It’s the start of a new era of federal spending.”

    That era started some time ago. Too few recognized the sea change that was Obama admitting aloud that government power was solely for “…rewarding our friends and punishing our enemies…” and that Trump was the unconditional Republican surrender to that fundamental view of government power.

    Trump was a full surrender of the American Experiment in growing liberty and prosperity to statist squabbling for slices of a zero sum pie.

    I forget who it was that said during the Obama years that “…we are all socialists now…” but given that populism is socialism via envy versus via dogma they were either accurate or at least prescient.

    1. It’s of you say this “Trump was a full surrender of the American Experiment in growing liberty and prosperity to statist squabbling for slices of a zero sum pie.”

      After he made the country much more prosperous than the previous 20 years in only 3. And he prioritized cutting regulations and taxes.

      While not perfect, you’re completely wrong if you think trump surrendered the American ideal of growing prosperity. Given all the bullshit he had to deal with I think he did remarkably well pre covid. And even with covid, anyone honest to themselves knows the west coast would’ve looked like new York if biden were president and wouldn’t have shut travel from China down as promptly.

      We know from Trump literally bragging about it, that he was one of the few people in the covid task force in favor of the travel ban last January, and in fact, fauci was against it. There’s numerous instances of trump bucking his party, advisors, and especially the media narrative, in favor of defending the people. That’s not surrender.

      1. Growth under Trump was even slower than that about which we all, rightfully, complained under Obama. They both were about nothing but punishing their enemies and rewarding their friends. Until Trump, Republicans had always, with varying degrees of sincerity, joined libertarians in opposing that view of government. Trump was their white flag, and the con man even sold you the rope and the flagpole at twice the going rate.

        1. “Here’s a look at average GDP growth rates under the last six U.S. presidents:

          Jimmy Carter (D): 3.25%
          Ronald Reagan (R): 3.48%
          George H.W. Bush (R): 2.25%
          Bill Clinton (D): 3.88%
          George W. Bush (R): 2.2%
          Barack Obama (D): 1.62%
          Donald Trump (R): 0.95%

          In his first four years in office, Trump has had by far the lowest average U.S. GDP growth rate of any of the last seven U.S. presidents.”

          https://www.benzinga.com/general/education/20/10/18076099/how-gdp-growth-under-trump-compares-to-clinton-obama-and-other-presidents

  19. The fact that Biden is a moderate is only a narrative that only the MSM and those at reason pushed. He promised to be liberal. It was the media trying to hide his open and published plans that pushed the narrative of him being moderate
    https://www.goolamvahanvati.com

  20. Pshaw! Purely political spending bill always come in under budget! (sarc)

  21. I finally intervened in COVID-19. All of this is more or less related to the previous generation of presidents. The Biden administration is doing a good job so far. If it can continue to control COVID-19, I believe it won’t take long. Relieve, when spring is blooming, you can wear beautiful Bandage Dresses and travel everywhere.

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