Biden Urges Senate Dems to Go Big on Covid Relief

By Yuval Rosenberg

Biden Isn’t Bending on His Call for Big Covid Relief Plan

The White House called President Biden’s Monday meeting
with 10 Republican senators who are proposing a smaller Covid
relief bill "substantive and productive." Sen. Susan Collins
(R-ME), one of the senators present, said the discussion was
"excellent" and that talks would continue at the staff level. But
White House Press Secretary quickly signaled that, while Biden was
willing to continue talks, he is nowhere near ready to scale back
his demands as sharply as the GOP senators have
suggested.

"While there were areas of agreement, the President also
reiterated his view that Congress must respond boldly and urgently,
and noted many areas which the Republican senators' proposal does
not address," Psaki said in a statement. "He reiterated that while
he is hopeful that the Rescue Plan can pass with bipartisan
support, a reconciliation package is a path to achieve that end.
The President also made clear that the American Rescue Plan was
carefully designed to meet the stakes of this moment, and any
changes in it cannot leave the nation short of its pressing
needs."

Biden himself reportedly reiterated that message Tuesday
in a call with Senate Democrats during which he urged them to go
big on the next round of relief spending and made clear that he
sees the $618 billion Republican proposal as inadequate.

"President Biden spoke about the need for Congress to act
boldly and quickly. He was very strong in emphasizing the need for
a big, bold package. He said that he told Senate Republicans that
the $600 billion that they proposed was way too small," Senate
Majority Leader Chuck Schumer (D-NY) told reporters, according to

The Washington Post. Biden is also on board with
congressional Democrats pushing ahead with the budget
reconciliation process that would allow them to pass a package
without GOP support, Schumer said.

What Biden is willing to negotiate: A White House
spokeswoman told the Post that Biden is open to reducing
eligibility for another round of stimulus payments, but he does not
want to cut those payments below $1,400 per person, which would be
in addition to the $600 payments Congress approved in
December.

"The President remains committed to finishing the job on
delivering $2,000 in direct relief to Americans who are struggling
to make ends meet during this crisis," White House spokeswoman
Rosemary Boeglin said in a statement to the Post.

Republicans and some Democrats have expressed concerns
that the payments Biden has proposed would go to some higher-income
households that don’t need the aid, with some families making as
much as $300,000 a year getting some aid. The current Democratic
plan would start to phase out those payments for individuals
earning more than $75,000 a year and couples making $150,000. The
Senate GOP plan calls for lowering the income thresholds to $50,000
for individuals ($100,000 for couples) and cutting the size of the
checks to $1,000.

Biden’s plan would send payments to about 95% of taxpayers
while the Republican plan would provide payments to about 75%,
according to an analysis by the conservative-leaning
Tax Foundation.

The difference translates to 80 million fewer people
getting payments under the GOP plan, according to an analysis by
the left-leaning Institute on Taxation and Economic Policy cited by
the Post’s Jeff Stein.

The GOP proposal would cost about half as much as Biden’s
— about $184 billion vs. $441 billion, according to the Tax
Foundation or $220 billion vs. $465 billion according to other
estimates.

Some economists have argued that the payments are
poorly targeted and less effective as stimulus, with higher-income
households far more likely to save the money or use it to pay down
debt rather than spend it. "Other economic experts have urged the
White House not to target the checks too narrowly," Stein
reports. "They note that the payments are based on
prior-year income and that lowering the threshold may exclude
millions of people who recently lost their jobs."

What it all means: The White House is making clear
that Biden is willing to negotiate some details of the relief bill
but won’t bend to GOP calls to dramatically scale back the package.
The two sides remain more than $1 trillion apart, and Democrats are
moving ahead with their preparations to pass Biden’s plan without
GOP support. The Senate on Tuesday afternoon voted 50-49 to proceed
with the budget resolution needed to pass a Covid relief bill via
reconciliation.

That reconciliation process could be bumpy — and it could
have unintended consequences.

Sen. Joe Manchin (D-WV), a key centrist, said Tuesday that
he would support the Democratic budget resolution but urged party
leaders to pursue a bipartisan deal. "Manchin’s remarks signal that
even though he will support fellow Democrats on a key procedural
vote to set up passing a COVID-19 relief package, he could still
block any package that leadership tries to pass solely with
Democratic votes under the budget reconciliation process," The
Hill’s Alexander Bolton
says.

And under the Pay-As-You-Go Act of 2010, known as PAYGO,
passing a relief package by reconciliation could force unwanted
automatic cuts to Medicare. Avoiding those cuts would require 60
votes in the Senate, meaning that some Republicans would have to
agree. "Alternatively, Democrats could negate the automatic cuts if
they raise taxes to prevent adding to the debt, or by abolishing
the legislative filibuster, another political can of worms," NBC’s
Sahil Kapur
reports.

Broad Support for Biden’s Covid Relief Agenda: Poll

A substantial majority of Americans supports President
Biden’s proposal to provide $2,000 in relief payments to most
adults, according to the results of a
new poll from Yahoo News/YouGov.

In a survey of 1,516 U.S. adults conducted from January 20
to January 21, 74% said they favored Biden’s aid plan, compared to
13% who said they were opposed. The results were similar on another
provision in Biden’s relief package, with 69% supporting increased
funding for vaccines, and just 17% opposed.

Other findings from the poll include:

* Raising the minimum wage to $15 per hour was backed by
58% of respondents, while 31% were opposed.

* A national mask mandate was supported by 57%, with 32%
opposed.

* 59% said the pandemic should be the president’s top
priority.

The poll found substantial support for Biden’s agenda in
other areas, as well. Federal assistance to boost domestic
manufacturing was backed by 65% of respondents, as was more
investment in renewable energy. More than 60% backed proposals for
criminal justice reform and ending family separation at the border,
while 50% or more expressed support for "giving all Americans the
option of buying Medicare-like public health insurance,"
eliminating carbon emissions in 30 years, and reversing tax cuts
for those earning more than $400,000 per year. 

The parts of Biden’s agenda that received the least
support include halting construction on the border wall, which was
supported by 45% of respondents but opposed by 42%, and ending the
travel ban on those from Muslim-majority countries, which was
supported by 42% of respondents but opposed by 35%.

Number of the Day: $380 Billion

The U.S. economy will perform well below potential in
2021, according to the Congressional Budget Office outlook issued
Monday. The output gap — the difference between gross domestic
product as recorded and what it would be if the economy were
working at full capacity — will total $380 billion this year, CBO
said, despite the ongoing recovery. The output gap will persist
even as it shrinks on an annual basis, totaling roughly $760
billion over the next three years.

Without the aggressive fiscal response to the Covid
pandemic by Congress, the output gap would have been considerably
larger.
According to the Committee for a Responsible Federal
Budget, "nearly $3 trillion of disbursed fiscal support and efforts
to adapt to the pandemic have shrunk the output gap substantially
to 4 percent in the third quarter of 2020, 3 percent by the fourth
quarter, and a projected 2 percent, or $130 billion, this
quarter."

Here's a look at the current trendline for the output gap
from the CRFB, which includes only approved Covid relief spending
so far.

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