House Budget Committee Advances Biden’s $1.9 Trillion Covid Rescue Plan
The House Budget Committee voted Monday to advance a $1.9 trillion Covid relief package, setting up the massive legislation for a full floor vote later this week.
The 19-16 committee vote saw one Democrat, Rep. Lloyd Doggett of Texas, join all Republicans in opposing the package, but Doggett’s vote was reportedly a mistake. A spokesperson said he supports the legislation.
What’s in the package: As a reminder, the plan would provide $1,400 direct payments to Americans making less than $75,000 a year; an extension of emergency unemployment benefits; $350 billion in aid to state and local governments; $129 billion for K-12 schools and $40 billion for colleges and universities; $50 billion for small businesses; an increase in the child tax credit and money for vaccine distribution, Covid testing and contact tracing.
The House version also totals just over the $1.9 trillion limit set by the fiscal year 2021 budget rules, so its costs will need to be trimmed by the Rules Committee, which will take up the bill next. The final House version will likely undergo changes in the Senate, which will determine whether an increase in the federal minimum wage to $15 an hour will be included, among other things.
Big, fast, not bipartisan: Democrats are speeding ahead to pass President Biden’s rescue plan, but their go-it-alone approach reportedly has some GOP moderates stewing over the lack of bipartisanship.
"Republicans, still irked by the lack of progress in the short-lived bipartisan talks, see a President who is hamstrung by both White House staff and Democrats in Congress whom they believe have far less interest in working with the GOP and seem more willing to advance their agenda without regard for the minority party," CNN’s Manu Raju and Ted Barret report. "Republicans' argument: Biden seems willing to cut a deal but won't do so because of pressure from the people around him."
White House officials have pushed back on such characterizations, and Biden himself has pressed the case that the country needs to "go big" with a package on the scale he’s proposed. "Now, critics say the plan is too big," he said Monday. "Let me ask them a rhetorical question: What would you have me cut? What would you leave out?" Biden said he’s open to ideas for making the plan "better and cheaper," but added, "we have to make clear who we’re helping and who it would hurt."
Why it matters: Biden and congressional Democrats may be able to pass the package without any Republican votes, but Politico’s Rachael Bade, Garrett Ross and Eli Okun note that they could pay a price down the line: "Biden wants to work with Republicans on future policies such as infrastructure, but some moderate Republicans feel he may have poisoned the well."
Tanden Nomination Runs Into More Opposition
The confirmation math just got even more complicated for President Biden’s pick to be his budget director. Sens. Susan Collins (R-ME) and Mitt Romney (R-UT) both said Monday that they will oppose Neera Tanden’s nomination to head the White House Office of Management and Budget, citing her past behavior on social media.
Tanden’s ability to win confirmation by an evenly divided Senate was endangered last week when Sen. Joe Manchin (D-WV) announced he wouldn’t back her, meaning that she would need to win the support of at least one Republican senator. Collins and Romney, both GOP moderates, were seen as possible swing votes, and their comments Monday narrow Tanden’s path to confirmation even further.
"Congress has to be able to trust the OMB director to make countless decisions in an impartial manner, carrying out the letter of the law and congressional intent," Collins said in a statement. "Neera Tanden has neither the experience nor the temperament to lead this critical agency. Her past actions have demonstrated exactly the kind of animosity that President Biden has pledged to transcend."
Collins added that Tanden’s deletion of past tweets before her nomination was announced "raises concerns about her commitment to transparency."
A Romney spokeswoman also cited Tanden’s tweets in explaining the senator’s opposition to her nomination. "Senator Romney has been critical of extreme rhetoric from prior nominees, and this is consistent with that position. He believes it's hard to return to comity and respect with a nominee who has issued a thousand mean tweets," Romney Press Secretary Arielle Mueller said in a statement, according to CNN.
The White House continues to defend Tanden, and Press Secretary Jen Psaki told reporters on Monday that the administration still sees a path to confirmation. Biden said last week that he won’t withdraw her nomination, but CNN reports that officials are discussing possible replacements:
"Names being discussed include Ann O'Leary, who resigned in December as chief of staff to California Gov. Gavin Newsom, former national economic adviser Gene Sperling and John Jones, the former chief of staff to Missouri Rep. Emanuel Cleaver who has worked extensively with the Congressional Black Caucus.
"Another likely contender is Shalanda Young, whom Biden nominated to serve as deputy OMB director and has worked with the House Appropriations Committee."
Yellen Defends Biden Stimulus
Covid-19 is still weighing on the economy, Treasury Secretary Janet Yellen said Monday, and the federal government needs to spend what it takes to blunt the effects on the population while bringing the pandemic to an end.
"We need to make sure that those most affected aren't permanently scarred by this crisis," Yellen said in an interview with The New York Times.
One of the main goals is to get millions of people back to work. "Success, to me, would be if we could get back to pre-pandemic levels of unemployment, and see the re-employment of those who have lost jobs in the service sector particularly," Yellen said.
Responding to concerns that a $1.9 trillion relief package is too large and would potentially waste money on those who don’t need help, Yellen said that some Americans who are suffering can be hard to reach. "The truth is there are pockets of pain that go beyond what can be reached in those highly targeted ways," she said, adding that the plan’s proposed direct payments of $1,400 could find the "pockets of misery that we know exist out there."
Yellen reiterated the Biden administration’s argument that there is more risk in doing too little than in doing too much. "A key job for a Treasury Secretary is to make sure the country is on a sound fiscal course," she said. "If you don't spend what is necessary to get the economy back on track, that has a fiscal cost as well."
And Yellen said that low interest rates are reducing the cost of additional federal spending. "I think we have more fiscal space than we used to because of the interest rate environment, and I think we should consider using it," she said.
Views on taxes: Yellen said Biden is interested in raising taxes on corporations and maybe on capital gains, but a wealth tax is probably off the table, in part because it would be hard to implement. "A wealth tax has been discussed but is not something President Biden" favors, Yellen said.
Number of the Day: 500,000 Covid-19 Deaths
As a nation, we’ve become somewhat numb to the toll of the pandemic, but take a moment to consider what it means that more than 500,000 Americans have died as a result of the coronavirus pandemic. Half a million lives lost. To mark the somber milestone, President Biden asked Americans to join in a moment of silence at sundown and ordered all flags on federal property to fly at half-staff for the next five days.
Treasury Tweaks PPP Loan Rules to Focus on Smaller Businesses
The Treasury Department said Monday that it will alter the rules for the Paycheck Protection Program to get more aid to small businesses. For a two-week period starting Wednesday, the program will limit its loans to companies with 20 or fewer employees.
President Biden said Monday that the intent was to help mom-and-pop firms that may have been unable to get help from the government so far. "These small businesses — not the ones with 500 employees, but these small businesses that, with a handful of folks, they are 90 percent of the businesses in America," Biden said at a news conference. "But when the Paycheck Protection Program was passed, a lot of these mom-and-pop businesses just got muscled out of the way by bigger companies who jumped in front of the line."
Established by the Cares Act last March, the PPP provides subsidized loans that are intended to help small businesses keep employees on their payrolls, and companies that meet the program’s requirements can have their loans forgiven. But some larger companies, including many that operate on a franchise model such as fast-food chains and car dealerships, have also benefited from the PPP, which has received $953 billion in funding from Congress.
In its effort to get money to smaller and more independent businesses, some of which may lack the banking connections and bureaucratic savvy to get federal assistance, the program is also relaxing some of its rules. Self-employed workers, sole proprietors and independent contractors now qualify for larger loans, despite having no employees, and the program is now open to those who are delinquent on their student loans and to Green Card holders.
The bottom line: Scheduled to expire on March 31, the PPP still has about $140 billion in funding, but Biden’s $1.9 trillion relief plan would extend the program. The Small Business Administration, which operates the PPP, said Monday that smaller businesses are already beginning to receive a larger portion of the loans, and the more relaxed eligibility rules are expected to drive a new surge of loans in the coming weeks.
- What 500,000 Covid-19 Deaths Means – David von Drehle, Washington Post
- Americans Are Ready for Communal Investment – Jennifer Rubin, Washington Post
- Five Ways to Improve the House COVID Relief Package – Committee for a Responsible Federal Budget
- Biden Asked What Could Be Cut From His COVID Relief Package. Here Are Some Ideas – Washington Post Editorial Board
- We Already Went ‘Big’ on Coronavirus Relief. More of the Same Won’t Solve the Problem. – Rep. Steve Scalise (R-LA) and Tim Phillips, Washington Post
- No One’s Buying the Republicans’ Deficit Fearmongering Anymore – Alex Shephard, New Republic
- Why States and Localities Need More Federal Aid – Lucy Dadayan and Kim S. Rueben, Tax Policy Center
- Time Is Already Short for Democrats’ Agenda – Jonathan Bernstein, Bloomberg
- The Limits to America’s Pent-Up Demand – Stephen S. Roach, Project Syndicate
- The GOP Should Forgive Neera Tanden – Hugh Hewitt, Washington Post
- U.S. Economy May Have Its Best Chance in Years to Break From Era of Subpar Growth – David J. Lynch, Washington Post
- HHS Nominee’s Lack of Public Health Experience Is a Concern – Ramesh Ponnuru, Bloomberg
- What Happens When People Stop Going to the Doctor? We’re About to Find Out. – Wayne A.I. Frederick, New York Times
- Trump Tariff Aid To Farmers Cost More Than U.S. Nuclear Forces – Stuart Anderson, Forbes
- Why Texas Republicans Fear the Green New Deal – Naomi Klein, New York Times
- 50 Million Americans Are Unpaid Caregivers. We Need Help. – Kate Washington, New York Times