Two Key Senators Say No to Biden’s Budget Office Pick

By Yuval Rosenberg

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.

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