Biden Agrees to Limit Covid Relief Payments
In a victory for moderate Democratic senators seeking to rein in the $1.9 trillion Covid relief bill, President Joe Biden agreed on Wednesday to tighten the income limits for the next round of individual payments.
According to the new plan being circulated in the Senate version of the Covid relief bill, the full payments of $1,400 would still be provided to individuals earning up to $75,000 and married households earning up to $150,000, as laid out in the recently passed House bill. But individuals earning more than $80,000 and couples earning more than $160,000 per year would not receive any assistance. In the House version of the bill, those cutoffs are $100,000 and $200,000, respectively.
In essence, the payments would phase out much faster under the new Senate version of the bill, reducing the total number of people who will get a check.
Who gets hit: Kyle Pomerleau, a tax expert at the right-leaning American Enterprise Institute, estimated that nearly 9 million households that received a payment during the Trump administration would not receive one through the Biden bill, according to The New York Times. The narrower income limits would save between $15 and $20 billion on the total cost of the bill, Pomerleau said.
Steve Wamhoff of the liberal-leaning Institute on Taxation and Economic Policy said that about 5% of Americans, or 17 million people, would lose benefits under the new plan. “The Senate bill would benefit 86 percent of adults and 85 percent of children, compared to 91 percent of adults and 90 percent of children under the House-passed bill,” Wamhoff wrote. “But among the bottom 60 percent of Americans, those who most need help, both versions of the proposal would benefit 100 percent of adults and children.”
Moderates flex their muscles: Driven by concerns among moderate Democratic senators about providing aid to households that may not need it, Biden’s decision to limit the payments reflects the remarkable power centrists including Joe Manchin (WV) and Jeanne Shaheen (NH) now have in the upper chamber, where party control is split 50-50 and just one defection can make or break a bill. Manchin “basically has veto power over everything the party wants to do,” Jake Sherman of Punchbowl News tweeted.
Manchin expressed approval of the payment limits and praised the overall package, even though it will increase enhanced unemployment payments to $400 a week instead of keeping them at $300 as he suggested. “It’s going to be a good package that’s going to help an awful lot of people. And it’s targeted. The main thing is, it’s targeted to get to people in need,” he told Politico.
Questions about the politics: Critics questioned the wisdom of Biden’s decision, which creates a politically awkward situation in which millions of people who received Covid relief payments under former President Trump will not receive payments from the bill Biden hopes to sign soon.
“Conservative Dems have fought so the Biden admin sends fewer & less generous relief checks than the Trump admin did,” Rep. Alexandria Ocasio-Cortez (D-NY) tweeted. “It’s a move that makes little-to-no political or economic sense, and targets an element of relief that is most tangibly felt by everyday people. An own-goal.”
From a fiscal perspective, the savings are modest — the Senate bill would be 0.63% cheaper, according to New York magazine’s Eric Levitz — and the sharp phase-out risks creating a punitive marginal tax rate of over 50% for some households earning incomes close to the cutoff point, according to the Progressive Policy Institute’s Ben Ritz. “If I were a worker making $80k I would be furious about this in a way I would not have been as a $100k worker under the House framework,” Ritz tweeted. “This really dumb change makes checks more rather than less inequitable & saves hardly any money.”
Accepting the political reality: In comments Wednesday, White House Press Secretary Jen Psaki acknowledged the power that moderates now have in the Senate, while making clear that Biden is focused on doing what it takes to get the relief bill passed. “Sen. Manchin and others in the Senate are negotiating with each other about what package they can support moving forward as it relates to the American Rescue Plan. That’s ongoing now,” Psaki said. “But Sen. Manchin has been clear that he supports a big package. He believes it should meet the moment. And so we’re looking forward to working with him and getting this across the finish line.”
Quote of the Day: Biden Bashes States Relaxing Covid Restrictions
“I think it’s a big mistake. Look, I hope everybody has realized by now: These masks make a difference. We are on the cusp of being able to fundamentally change the nature of this disease because of the way in which we're able to get vaccines in people's arms. …
"The last thing we need is Neanderthal thinking that, in the meantime, everything is fine, take off your mask. … Getting a shot in someone's arm and getting the second shot are going to take time. And it's critical, critical, critical, critical that they follow the science: Wash your hands, hot water. Do it frequently, wear a mask and stay socially distanced. And I know you all know that. I wish the heck some of our elected officials knew it.”
– President Biden, responding Wednesday to decisions announced Tuesday by Republican Texas Gov. Greg Abbott and Mississippi Gov. Tate Reeves to relax Covid restrictions and lift mask mandates in their states. Dr. Rochelle Walensky, director of the Centers for Disease Control and Prevention, also warned Wednesday against prematurely lifting coronavirus restrictions: “The next three months are pivotal. I think we at the C.D.C. have been very clear that now is not the time to release all restrictions.”
White House Pulls Tanden Nomination for Budget Office
The White House on Tuesday gave up its fight to have Neera Tanden lead the Office of Management and Budget, accepting the first Cabinet-level defeat for a Biden nominee. President Biden said in a statement Tuesday evening that he had accepted Tanden’s request to withdraw her nomination and that he looked forward to having her serve in another role in his administration.
Tanden’s nomination was met with immediate opposition. Senators took issue with “mean tweets” targeted at lawmakers in both parties that Tanden had posted when she was president of the Center for American Progress, a left-leaning think tank. A number of key senators — most notably Sen. Joe Manchin (D-WV) — had announced that they would oppose her nomination
Tanden’s supporters argued that the criticisms of her social media posts was unfair and hypocritical given the how Republicans had responded, or failed to respond, to offensive tweets and comments made by President Trump throughout his term in office.
But it became clear that Tanden had no path to confirmation after Sen. Lisa Murkowski (R-AK) reportedly signaled to the White House that she would be a no. The support of Sen. Bernie Sanders (I-VT), the chair of the Senate Budget Committee, and Sen. Kyrsten Sinema (D-AZ) was reportedly also in doubt.
“Unfortunately, it now seems clear that there is no path forward to gain confirmation, and I do not want continued consideration of my nomination to be a distraction from your other priorities,” Tanden wrote in a letter to Biden released by the White House.
Why it matters: This is Biden’s first failed Cabinet nomination — but all recent presidents have suffered failed nominations. “It took President Barack Obama, for example, three attempts to find a commerce secretary and two tries to get a health and human services secretary confirmed,” CNN’s Kevin Liptak and Jeff Zeleny note. “By the time he departed office, President Donald Trump had all but given up on making high-profile nominations at all, preferring to name acting secretaries instead.”
Still, the failure underscores the narrow congressional margins the Biden administration faces as it tries to advance its agenda — and how the president will have to conserve his political capital for efforts like passing a massive Covid relief package.
The Tanden nomination, coupled with the relief bill changes mentioned above, further highlights the sway Manchin now has as a crucial vote in the Senate with the power to singlehandedly scuttle Biden’s plans — and that the White House may need to work harder than it thought to round up votes from centrist Republicans.
“I guess the message that it sends is that you really have to work your agenda extra hard in a 50-50 Senate and never make any assumptions,” Murkowski reportedly said after the nomination was withdrawn. “I think they probably thought well, OK, well we’ll have Manchin right? So we don’t need a Republican. Well, maybe it’s a lesson that you’re not always going to have Manchin.”
What’s next for OMB: “The person viewed as a leading contender to be nominated in Tanden's place -- Shalanda Young, Biden's pick to be deputy OMB director -- had breezed through a confirmation hearing on Tuesday, earning praise even from conservative Republicans,” CNN says, but the White House said Wednesday it won’t announce a new pick to head OMB this week.
Another Biden pick faces sharp partisan divisions: The Senate Finance Committee split 14-14 along party lines Wednesday on whether to advance the nomination of Xavier Becerra for Health and Human Services Secretary. “He is the first of President Joe Biden's Cabinet nominees not to be favorably reported out of committee, which will force Democrats to bring up a motion to discharge his nomination and hold an additional four hours of debate before a confirmation vote,” Politico reports.
The first Black chair of Council of Economic Advisers: It’s not all bad news for Biden on the confirmation front, though. The Senate on Tuesday confirmed Gina Raimondo, the former governor of Rhode Island, as Commerce secretary and Cecilia Rouse, a Princeton economist, as chair of the White House Council of Economic Advisers. Rouse will be the first Black CEA chair, and the fourth woman to head the council in its 75-year-history.
- Democrats Don’t Need Virus-Relief Compromise – Jonathan Bernstein, Bloomberg
- With Demise of Wage Increase, Biden and Democrats Face Progressive Ire – Emily Cochrane, New York Times
- Democrats Have Decided to Send Checks to Fewer People for No Actual Good Reason – Jordan Weissmann, Slate
- Elizabeth Warren’s Wealth Tax Won't Work. This Will – Rick Newman, Yahoo Finance
- Infrastructure Is Next Up on Biden’s Agenda, and It’s a Politically Tricky Issue – Annie Karni and Jim Tankersley, New York Times
- Greg Abbott's Head-Scratching, Anti-Science Decision to End the Texas Mask Mandate – Chris Cillizza, CNN
- In Democrats’ Progressive Paradise, Borrowing Is Free, Spending Pays for Itself, and Interest Rates Never Rise – Steven Pearlstein, Washington Post
- Rip Up the Unemployment System and Start Again – Jacob Silverman, New Republic
- Big Tech Has Our Data. Should We Tax Them on It? – Renu Zaretsky, Tax Policy Center
- What Do Vaccine Efficacy Numbers Actually Mean? – Carl Zimmer and Keith Collins, New York Times
- The Case for Covid Optimism – Spencer Bokat-Lindell, New York Times
- When It Comes to Vaccinations, More Is More – Tyler Cowen, Bloomberg
- Trump Should Be a Celebrity Vaccine Ambassador – Michelle Cottle, New York Times
- Snarky Tweets Shouldn’t Override Smarts. But They Did for Neera Tanden – Philip Elliott, Time