Biden Agrees to Limit Covid Relief Payments

By Yuval Rosenberg

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.

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