Covid Fuels a $24 Trillion Surge in Global Debt

By Yuval Rosenberg

Democrats Reintroduce Public Option Plan for Health Care

Two Democratic senators on Wednesday reintroduced a plan for
creating a public option for health care in the U.S.

Sens. Michael Bennet of Colorado and Tim Kaine of Virginia
propose to create a government-operated health care plan that would
compete with privately run plans sold through the federal insurance
marketplaces.

Kaine said he would push to advance the proposal, called the

Medicare-X Choice Act, through the reconciliation
process, which would allow Democrats to pass the bill with a simple
majority of votes in the Senate. Assuming no Republicans support
the legislation, reconciliation would require all 50 Democratic
senators to get behind the bill, which its backers say is a real
possibility, given that it is close to what President Biden ran on
last fall.

"I think we are in the spot where Joe Biden was during the
campaign, and that suggests to me that this could be a consensus
position for Democrats going forward," Bennet told reporters.

What the plan would do: The proposed public option would
work much like Medicare, with added features to account for a
younger population,
according to The Hill’s Jessie Hellmann. Providers
currently in the Medicare network would be required to participate,
and at similar reimbursement rates, though doctors and hospitals in
rural areas could see upward adjustments of up to 150%. There would
be no co-pays or deductibles for patients.

The public option would be rolled out over a period of years,
first in rural areas that have had trouble attracting coverage in
the ACA marketplaces before going nationwide by 2025. Like
Obamacare, the plan would operate with federal subsidies to help
people afford the insurance. Families earning less than 150% of the
poverty level would pay no premiums.

The Bennet-Kaine proposal would also allow the government
to negotiate the prices of drugs — a key provision that experts say
could play an important role in driving down costs throughout the
health care system.

5 Policy Takeaways From Biden’s Milwaukee Town
Hall

President Biden made news on a number of fronts at his Tuesday
night
CNN town hall in Milwaukee. Here’s a quick
recap.

A goal for vaccinations, and some normality: Biden said
that by the end of July we’ll have more than 600 million doses of
Covid-19 vaccine available, "enough to vaccinate every single
American." That echoes comments made last week, when Biden
announced deals to buy another 100 million doses each of the Pfizer
and Moderna vaccines, a 50% boost to supply. Even with those deals,
though, Biden
warned last week that "gigantic" logistical issues
meant that many Americans likely won’t be vaccinated by the end of
the summer. At Tuesday’s town hall, he said that he didn’t want to
overpromise, but expected that "by next Christmas, I think we’ll be
in a very different circumstance, God willing, than we are
today."

A benchmark for his $1.9 trillion Covid relief plan:
Biden said that there’s an "overwhelming consensus" among
economists of all political stripes that a large relief plan is the
right way to go. "In order to grow the economy a year or two,
three, and four down the line, we can’t spend too much," he said.
"Now is the time we should be spending. Now is the time to go big."
He also said that economists estimate that if his plan passes, the
U.S. will create 7 million jobs this year.

Biden may be overstating the consensus a bit, but with Democrats
likely to pass the relief package within weeks, expect that 7
million jobs figure to be used as a political measuring stick as
people judge the legislation’s success or failure.

A hard no on $50,000 in student loan forgiveness: Senate
Majority Leader Chuck Schumer (D-NY) and progressive Democrats are
pushing the Biden administration to cancel up to $50,000 of federal
student loan debt per borrower by executive action. Asked by a town
hall audience member what he will do to forgive at least $50,000 of
student debt, Biden forcefully
shot down the idea. "I will not make that happen,"
he said.

Biden explained that, while he understands that student debt can
be debilitating and he’s prepared to cancel up to $10,000 per
borrower, he doesn’t believe he has the authority to wipe out
$50,000 by executive action.

Schumer and Sen. Elizabeth Warren (D-MA) responded Wednesday by
urging Biden to press ahead. "Presidents Obama and Trump used their
executive authority to cancel student loan debt. The Biden
administration has said it is reviewing options for cancelling up
to $50,000 in student debt by executive action, and we are
confident they will agree with the standards Obama and Trump used
as well as leading legal experts who have concluded that the
administration has broad authority to immediately deliver
much-needed relief to millions of Americans," they said in a joint
statement.

On plans for school reopenings: Biden said his goal is to
open the majority of K-8 schools by the end of his first 100 days
in the White House — and by "open," he said, the goal would be for
five days a week in person. White House Press Secretary Jen Psaki
said last week that the administration’s goal was to have most
schools open at least one day a week in person. Biden called that
"a mistake in the communication."

Defending a $15 minimum wage, but open to negotiations:
In response to an audience member’s question about small business
concerns over the cost of a higher minimum wage, Biden emphasized
that his proposed increase from $7.25 to $15 an hour would be
gradual, and that phasing in wage increases would lessen the effect
on business owners. He also disputed a recent Congressional Budget
Office estimate that a $15 minimum wage would cost 1.4 million
jobs, even as it would lift 900,000 people out of poverty.

"I think there is equally as much, if not more, evidence to
dictate that it would grow the economy and, long run and medium
run, benefit small businesses as well as large businesses, and it
would not have such a dilatory effect," Biden said. "But that’s a
debatable issue."

It’s not clear yet whether the $15 proposal will be included in
the final version of the relief package being crafted by Congress.
Psaki said Wednesday that the $15 minimum wage is important to
Biden, but that it will be up to lawmakers to determine what the
legislation looks like.

Republican Sens. Mitt Romney of Utah and Tom Cotton of
Arkansas plan to introduce their own minimum wage legislation. "Our
proposal gradually raises the minimum wage without costing jobs,
setting it to increase automatically with inflation, and requires
employers to verify the legal status of workers," Romney
tweeted Tuesday.

Covid Drives a $24 Trillion Surge in
Global Debt

Global debt has risen by $24 trillion in the last year,
driven largely by the response to the Covid-19 pandemic, the
Institute of International Finance announced Wednesday.

With global debt now totaling a record $281 trillion, the
ratio of debt to global GDP has risen 35 points to 355%, according
to the group’s calculations. The increase in debt load is larger
than the jump seen during the Great Recession.

Government spending accounts for about half of the
increase. Corporations added $5.4 trillion to the total, while
banks added $3.9 trillion and households added $2.6
trillion.

The debt bonanza is expected to continue. "We expect
global government debt to increase by another $10 trillion this
year and surpass $92 trillion," the IIF
said, while warning that it could be difficult to
cut back: "Political and social pressure could limit governments’
efforts to reduce deficits and debt, jeopardizing their ability to
cope with future crises. This could also constrain policy responses
to mitigate the adverse impacts of climate change and natural
capital loss."

Number of the Day: 3.3 Million

With the pace of vaccinations picking up around the
country, we could see 3.3 million doses per day by March 31, up
from the current 1.7 million per day, according to an analysis from
the Kaiser Family Foundation.

"To date, just over 70 million doses have been delivered
to states," KFF’s Jennifer Kates and Larry Levitt
wrote Wednesday. "This leaves close to 150 million
doses still to be delivered by the end of March, which translates
into about 3.3 million doses, on average, per day between now and
then, or almost double the recent pace of daily
vaccinations."

News

Views and Analysis