Biden Brings His Stimulus Pitch to Prime Time

Biden Brings His Stimulus Pitch to Prime Time

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Plus, earmarks are coming back
Tuesday, February 16, 2021

Biden Takes His Stimulus Pitch to Prime Time

President Biden is taking his pitch for a $1.9 trillion coronavirus aid package on the road, traveling to Milwaukee Tuesday for a CNN town hall at 9 p.m. ET that is expected to focus on the pandemic, the economy and the relief bill that Democrats are pushing to pass quickly. The event is Biden’s first official trip out of Washington, D.C. since taking office. Biden is set to visit Michigan, another Midwestern battleground state, on Thursday to see a Pfizer manufacturing site and talk to workers making the Covid-19 vaccine.

Where the relief package stands: As the Senate was dealing with the second impeachment trial of former President Trump last week, nine House committees passed their sections of the massive package, with Democrats voting down dozens of GOP amendments "targeting everything from abortion to the minimum wage to the Keystone XL pipeline," The Washington Post reports.

Congressional Republicans largely oppose Biden’s proposal, arguing that it costs too much and should be more targeted. They also object to Biden’s proposed $15 minimum wage and the $350 billion in aid to state and local governments. In an interview published Monday,

Senate Minority Leader Mitch McConnell told The Wall Street Journal that the Biden administration’s policies will help unify a fractured GOP. "I don’t think many Republicans are going to be for very many of the things that are coming out of this administration," he said.

Democrats are set to move ahead using the budget reconciliation process that allow the package to pass the Senate with a simple majority, meaning the GOP support won’t be necessary. But the White House and congressional Democrats are still ramping up pressure on Republicans, pointing to polls that show the $1.9 trillion package is widely popular with the public in suggesting that the GOP’s position is politically risky. "If they make a decision, Senator McConnell, the Republicans in Congress, to vote against the will of their constituents, I would suggest you ask them why that’s smart politically," White House Press Secretary Jen Psaki told reporters Tuesday.

House Democrats are targeting a floor vote next week to send the legislation to the Senate. Politico reports that Democrats are holding a series of issue-specific caucus calls Tuesday and Wednesday to get information on the legislation out to their members.

$15 minimum wage remains in question:
Biden has suggested that increasing the minimum wage to $15 may not make it into the final legislation. "I put it in, but I don’t think it’s going to survive," he told CBS News this month, suggesting that standalone legislation could follow.

The wage hike faces questions about whether it qualifies for inclusion in the relief package under the special rules for budget reconciliation, but political considerations also loom large. Conservative Senate Democrats Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, whose votes are crucial for passage, oppose the $15 wage, while House progressives are pushing strongly for the provision to be included. "If the Senate strips out the minimum wage increase and sends the legislation back to the House without it, liberals in the House would face a decision about whether to support the package anyway," the Post notes.

The Hill’s Alex Gangitano details the key players to watch in this fight here.

Congressional Democrats Are Bringing Back Earmarks

Democrats are planning to bring earmarks back into the budgeting process, according to a report in Punchbowl News.

Sometimes criticized as an enabler of wasteful government spending, earmarks allow lawmakers to designate funds for specific projects and often grease the wheels of dealmaking in Washington, with one lawmaker approving funding for a bridge in, say, Alaska in exchange for a new highway interchange in Illinois. Earmarks were banned in 2011 in an effort led by the wave of tea party supporters who won control of the House in the 2010 midterm elections.

Rep. Rosa DeLauro (D-CT) and Sen. Patrick Leahy (D-VT), the new leaders of the House and Senate appropriations panels, will reportedly announce the return of earmarks in the next few weeks. In what may be an effort to reframe the practice and distance it from past corruptions, the earmarks will be referred to as "member-directed spending."

There will reportedly be limits on spending amounts, with full transparency and a restricted set of potential recipients that includes state and local governments and non-profits and excludes for-profits.

A good thing? Bloomberg’s Jonathan Bernstein said Tuesday that the return of earmarks is "marginally good news" because they probably make it easier to reach compromises in Congress. They’re also budget neutral, Bernstein said, since they can only direct already appropriated funds to specific projects, not create new spending.

Still, the return of earmarks by whatever name will upset some critics and revive a sometimes unseemly industry in Washington. "This will rejuvenate a whole line of business for lobbying shops," Punchbowl said. "Appropriations lobbying was once a very lucrative corner of the influence market -- that will come back now."

Column of the Day

Binyamin Appelbaum of The New York Times argues that policymakers should worry less about driving inflation higher with increased government spending and more about providing aid to individuals and organizations still suffering from the coronavirus pandemic. He takes aim at official estimates of the "output gap," the difference between what the economy actually produces and wat it could potentially produce:

"The output gap is an elegant concept, but nobody knows how to measure it precisely, nor is its relationship to inflation clearly understood. Guesses by educated people are not the same thing as educated guesses. And there are plenty of smart people who don’t see inflation coming over the horizon. The most recent Survey of Professional Forecasters, published Friday, anticipates an annual average inflation rate of 2.03 percent over the next 10 years."

White House Says It Will Send 13.5 Million Vaccine Doses as Week to States

The White House said Tuesday that it is upping the supply of coronavirus vaccines the federal government sends to states each week from 11 million to 13.5 million. It is also doubling the doses sent to pharmacies to 2 million. White House Press Secretary Jen Psaki said vaccine distribution has increased by 57% since President Biden was inaugurated on January 20.

The announcement comes after a bipartisan group of governors on Monday sent a letter to the president saying that better communication is needed in the vaccine distribution process and that plans to use pharmacies and health centers in the vaccine effort should be coordinated with states. CNN reports: "A person familiar with the situation, who asked not to be identified in order to speak candidly, said governors wanted the administration to be more clear with the American public that the constraints in receiving the vaccine are due to a national shortage of doses and not due to the failures of state and local officials, who are largely being blamed."

A Complicated Year for Tax Filers

Tax season kicked off Friday as the IRS began accepting returns for 2020, and there will be an extra layer of difficulties and confusion for taxpayers this year.

Millions of people saw unexpected changes to their incomes last year and their tax returns will have to take those sometimes complicated variations into account. On top of that, some filers will be using their returns to claim stimulus payments they missed or were paid in the wrong amount.

"2020 was kind of a year for the ages and all the life experiences it took with it," Mark Steber of the tax-preparation firm Jackson Hewitt told The Hill’s Naomi Jagoda. "There’s a lot for people to watch for on their taxes, and a lot to watch out for."

Unemployment benefits are one issue that could trip up a lot of filers, experts say, since not everyone is aware that the payments are taxable income, and they could leave some people with large, unexpected tax bills. Fraud adds another wrinkle, as thieves used stolen identities to claim benefits while leaving financial and legal headaches in their wake.

The next coronavirus relief bill adds yet one more potential point of confusion. Congress is expected to allow people to rely on their 2020 tax returns in the calculation of new stimulus payments, and those who saw their incomes drop last year may want to file quickly. Those who saw their income rise may want to wait.

Congress could provide some amnesty for some groups of people, with one Democratic proposal seeking to exempt the first $10,200 in unemployment benefits from federal income tax. But it’s not clear at this point what exemptions might pass, even as the IRS opens the door to returns.

"The biggest thing is we don’t know what we don’t know," tax expert Adam Markowitz told Jagoda.

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