Biden Rips Republicans on Covid Relief

By Yuval Rosenberg

Biden Rips Republicans on Covid Relief, Says He’ll ‘Act
Fast’

President Biden on Friday made a forceful case for his $1.9
trillion Covid rescue package, arguing in a speech to the nation
that another weak monthly jobs report demonstrates that the economy
urgently needs support on the scale he’s proposing and that, while
he wants to act in a bipartisan fashion, Republicans are “just not
willing to go as far as I think we have to go.”

Biden said he’s ready to press ahead without GOP backing. “I’m
going to act. I’m going to act fast. I’d like to be doing it with
the support of Republicans,” he said. “I’ve told both Republicans
and Democrats that’s my preference, to work together, but if I have
to choose between getting help right now to Americans who are
hurting so badly and getting bogged down in a lengthy negotiation
or compromising on a bill that’s up to the crisis, that’s an easy
choice. I’m going to help the American people who are hurting
now.”

Biden and the White House have argued that their package is
bipartisan even if congressional Republicans don’t support it,
pointing to polling that shows broad backing among voters in both
parties. Biden has said he’s willing to negotiate over
who would be eligible for relief payments and how
that eligibility will be phased out, but he bluntly asserted on
Friday that he won’t discuss sending out a smaller dollar amount.
“I’m not cutting the size of the checks,” he said. “They’re going
to be $1,400, period. That’s what the American people were
promised.”

Lessons of 2009: Republicans have criticized the Biden
plan as too big and too poorly targeted. “It will not serve
Americans to pile another huge mountain of debt on our grandkids
for policies that even liberal economists say are poorly targeted
to current needs,” Senate Minority Leader Mitch McConnell said
Thursday.

Biden on Friday pushed back on claims that the U.S. can’t afford
another massive Covid bill and on those GOP deficit warnings. “What
Republicans have proposed is either to do nothing or not enough,”
he said. “All of a sudden, many of them have rediscovered fiscal
restraint and the concern for the deficits. But don’t kid yourself,
this approach will come with a cost — more pain for more people for
longer than has to be.”

He argued that “a growing chorus of top economists — right ,
center, left” now say that the U.S. can afford to borrow and spend
more in order to make productive investments to boost the economy.
“The simple truth is, if we make these investments now, with
interest rates at historic lows, we’ll generate more growth, higher
incomes, a stronger economy, and our nation’s finances will be in a
stronger position as well,” he said.

House and Senate pass budget plan: Following a 15-hour,
all-night
“vote-a-rama,” the Senate Friday morning — just
after 5:30 a.m. — approved a budget resolution setting up the
reconciliation process that would allow Democrats to pass a Covid
relief plan without GOP votes. Vice President Kamala Harris cast
the deciding vote to break a party-line 50-50 tie. The House then
approved the amended Senate-passed resolution on Friday afternoon
in a 219-209 vote largely along party lines.

Legislative committees will now get down to crafting the details
of their Covid package and hash out intraparty differences (see
more on those below), aiming to produce a result that can be
approved by the narrow Democratic majority in the House and get the
support of all 50 Senate Democrats.

The targeting of $1,400 relief checks remains one key area under
discussion.

Another contentious issue, Biden’s proposed $15 minimum wage,
appears likely to be left out of the final package due to Senate
rules requiring that any reconciliation measure have an impact on
the federal budget. That may help the rest of the package win
approval from the likes of Sen. Joe Manchin (D-WV), who has
expressed opposition to a $15 minimum wage.

House Speaker Nancy Pelosi (D-CA) said Friday that she
hopes to pass the package and send it to the Senate within two
weeks, ahead of a mid-March deadline when federal unemployment
benefits are set to expire for millions of Americans. She added
that Democrats still plan to pursue a “recovery” plan after passing
this “rescue” bill. That next phase is expected to center around
infrastructure spending and climate change — and to be even larger
than the $1.9 trillion Covid bill.

U.S. Economy Added a Disappointing 49,000 Jobs in January

Biden’s comments came soon after the January employment report
showed that the economy added 49,000 jobs last month, with private
employers accounting for just 6,000 of the total, a disappointing
result that suggests that the recovery is faltering. Additionally,
December’s job loss figures were revised downward to 227,000 from
the preliminary report of 140,000, indicating the labor market is
even weaker than the data had previously indicated.

While the unemployment rate fell four-tenths of a percentage
point to 6.3%, much of the reduction was attributed to about
400,000 people dropping out of the workforce, a worrying sign of
worsening conditions. And many economists believe the official
measure is artificially low. “The headline unemployment rate of
6.3% for Jan likely undercounts the number of out-of-work people in
the US, not by design, but by the peculiar circumstances of the
pandemic,” Joseph Brusuelas, chief economist at the consulting firm
RSM,
wrote. “Our estimate implies a real 7.5% rate, which we
acknowledge could be much higher closer to 8.5%.”

The number of missing jobs remains enormous, about 9.9 million
below the pre-pandemic level. Elise Gould of the Economic Policy
Institute notes that the number of missing jobs is actually more
than 12 million, if lost job growth over the last 11 months is
taken into account.

Biden says jobs numbers support his case: “It’s very
clear that our economy is still in trouble,” Biden
said at the White House. “At that rate, it’s going
to take 10 years until we hit full employment,” he added. “That’s
not hyperbole. That’s a fact.”

Biden reeled off a litany of data points that he said make it
clear that the economy needs a significant boost: “[W]e have more
than 10 million people out of work, 4 million people have been out
of work for six months or longer, and 2.5 million women have been
driven from the workforce. Fifteen million Americans are behind in
their rental payments. Twenty-four million adults and twelve
million children literally don’t have enough food to eat.”

Noting that January was the worst month for the pandemic
so far, with more than 100,000 deaths, Biden said that millions of
Americans are suffering and in need of immediate
assistance:

“Are we going to say to millions of Americans who are
out of work ... ‘Don’t worry, hang on, things are going to get
better?' That’s the Republican answer right now. I can’t in good
conscience do that. Too many people in the nation have already
suffered for too long. And telling them we don’t have the money to
alleviate their suffering, to get to full employment sooner, to
vaccinate America after $8 trillion in deficit spending over the
past four years — much of it having gone to the wealthiest people
in the country — is neither true nor necessary.”

Op-Ed of the Day: Top Democratic Economist Warns Biden Plan Is
Too Big

While Biden has said repeatedly that he sees more risk in going
too small with a Covid relief package than in going too big —
citing a lesson he says he learned when he was Vice President in
the Obama administration — former Treasury Secretary Larry Summers
warned in a Washington Post
op-ed Thursday that going too big carries plenty
of risks as well.

Summers is a divisive figure in Democratic circles and a
frequent target of criticism from the left. As director of the
National Economic Council, Summers was one of the architects of the
Obama administration’s 2009 rescue plan, which he now admits was
too small.

But the current situation is different, Summers argues in his
widely discussed op-ed, citing the size of the proposed spending
package relative to the output gap, a measure of just how far the
economy is falling short. While the Obama stimulus fell well short
of the output gap at the time, the Biden proposal exceeds the
Congressional Budget Office’s estimate of the shortfall by a
substantial margin. “The proposed stimulus will total in the
neighborhood of $150 billion a month, even before consideration of
any follow-on measures,” Summers wrote. “That is at least three
times the size of the output shortfall.”

In addition to potentially overheating the economy and kicking
off a burst of inflation that could be difficult to respond to,
Summers argues that the sheer size of the package may make it
harder to pass another round of public investment, which he says
the country needs. “Is the thinking that deficits can prudently be
expanded longer and further? Or that new revenue will be raised? If
so, will this be politically feasible?”

White House not interested: Although Politico reported
that Summers’ op-ed had hit a nerve by expressing what “many
liberal wonks have been whispering about for weeks,” Biden’s
advisers rejected Summers’s analysis in no uncertain terms.

“I think [Summers is] wrong. I think he is wrong in a pretty
profound way,” Council of Economic Advisers member Jared Bernstein
said on CNN. “I very much disagree with the thrust of the
argument,” he added, saying “we have to go big and we have to go
bold here to finally put this crisis, to finally put this virus
behind us and to finally and reliably launch a robust, inclusive
and racially equitable recovery.”

Democratic Sen. Brian Schatz of Hawaii was more dismissive. “Why
would we listen to the economist who admits he went too small last
time if he’s warning us to go small again?” Schatz tweeted. “I
swear this town is nuts. It’s like people can only remember thirty
names and so they just keep going back to the same people.”

House Speaker Nancy Pelosi (D-CA) was even more blunt,
laughing off a question about whether she had discussed the op-ed
at a White House meeting with Biden: “We didn’t talk about Larry
Summers,” she told CNN.

Number of the Day: 10 to 1

Lets’ end the week on a positive note: U.S. Covid
vaccinations outnumbered new infections by 10 to 1 this week, CNN
reports, and not a single state is seeing an upward trend in new
cases.

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