Harris Breaks Tie to Start Senate Debate on Covid Relief Bill
The Senate on Thursday afternoon began what promises to be a lengthy debate over a modified version of President Joe Biden’s $1.9 trillion coronavirus relief package, with Senate Majority Leader Chuck Schumer (D-NY) pledging to pass the bill this week even as Republicans maneuver to drag out the process, likely extending it into the weekend.
"No matter how long it takes, the Senate is going to stay in session to finish the bill this week," Schumer said. "We all know this will merely delay the inevitable. It will accomplish little more than a few sore throats for the Senate clerks who work very hard, day in, day out, to help the Senate function."
The debate began after the Senate cleared a procedural vote, with Vice President Kamala Harris breaking a 50-50 tie along partisan lines.
What’s next: Sen. Ron Johnson (R-WI) forced Senate clerks to read the entire 628-page bill out loud, a step that is usually waived by bipartisan agreement. The reading started shortly after 3 p.m. ET and is expected to take about 10 hours or more, meaning it could extend well past midnight.
"We all know this will merely delay the inevitable. It will accomplish little more than a few sore throats for the Senate clerks who work very hard," Schumer said. And The Washington Post’s Philip Bump calculated that nearly 1,400 Americans will die from Covid while the text is being read.
After the reading, the Senate will begin up to 20 hours of debate on the bill, to be followed by a "vote-a-rama" in which lawmakers can offer up an unlimited number of amendments. That process could potentially require votes on dozens of amendments, dragging out for hours and hours. The key question for the vote-a-rama will be whether any of the amendments will get enough support to be adopted — and whether those changes alter the outlook for final passage through the evenly divided chamber.
Changes in the Senate package: The Senate version of the legislation differs from the House-passed bill in several important ways:
* No minimum wage hike: It doesn’t include an increase in the federal minimum wage to $15 an hour, after the Senate parliamentarian ruled that the provision doesn’t comply with budget rules being used to pass the package by a simple majority vote.
* Tighter limits for relief payments: The Senate bill lowers eligibility limits for $1,400 direct payments, reducing the income level at which payments phase out completely from $100,000 to $80,000 for individuals and from $200,000 to $160,000 for couples filing jointly. The change means that some 9 million fewer households will receive a payment this time compared to the previous round.
* Revised formula for state aid: Democrats tweaked the formula for allocating some $350 billion in aid to state and local governments, boosting money sent to less populous states and diverting $10 billion toward "critical capital projects" like broadband access, CQ Roll Call reports. "There are also numerous new restrictions on the state and local money, including a requirement that only 50 percent of the funds be made available up front, along with more limited uses for the funds," Roll Call says.
The changes reportedly were made to help ensure the support of moderate Democrats — and perhaps to court the vote of Alaska Republican Lisa Murkowski in an effort to show bipartisan backing for the package.
Murkowski indicated Thursday she is still deciding how to vote on the relief bill and said she is focused on how the package could help her state, including its tourism and seafood sectors. "I’m going to see what’s in it. We already know there are some things in it that are clearly not Covid related, but I’m looking at some of the things that will provide a level of relief for a state like Alaska," she told reporters.
* Two transportation projects cut: The Senate bill eliminates funding in the House bill for two controversial transportation projects, one in California and one in New York.
Read about other changes in the Senate version at CQ Roll Call.
The bottom line: A final vote on Senate passage likely won’t happen until the weekend. The House will then have to pass the Senate bill, but Democrats appear to be headed toward delivering Biden his first major legislative win.
Nagging Doubts About Biden’s Covid Relief Plan
Even as Senate Democrats prepare to push the $1.9 trillion Covid relief package over the finish line as soon as this weekend, some policy experts are still worried that the bill is poorly targeted, focused on the wrong issues or just plain too big.
According to The Washington Post’s Jeff Stein, Heather Long and Erica Werner, the grumblings of discontent aren’t limited to Republicans, whose opposition to the bill is both unanimous and unsurprising, and a number of economists of various political stripes. Some Democrats, including moderate senators whose support is needed to pass the legislation, have also reportedly had second thoughts.
One basic issue is the state of the economy, which continues to gather strength according to most analysts, due in large part to growing optimism about the pace of vaccinations. "The improving economy and improving outlook on the virus has dramatically changed the dynamic on Biden’s spending plans, but the bill has remained largely the same," Bill Hoagland of the Bipartisan Policy Center told the Post.
Tinkering with the topline: Given the improving outlook, some economists say the package could be reduced. Constance Hunter, chief economist at KPMG, told the Post that $1.5 trillion would be enough, while panelists at the National Association for Business Economics put the number at about $1 trillion.
Echoing the complaints of many fellow Republicans, Senate Minority Leader Mitch McConnell (KY) said this week that he thinks the bill is too large, though without providing an alternative. "It’s of a size that might have made sense a year ago … this is not a year ago," McConnell said Tuesday. "We’re making extraordinary progress with the rollout of the vaccines."
How much do states and cities need? The $350 billion allotted to state and local governments in the bill is a sticking point for many Republicans, who have long opposed what they inaccurately refer to as a "blue state bailout" that would supposedly aid profligate Democratic cities and states. "This bill would reward bad actions, because states who have not managed themselves well are the ones who are going to benefit from this," Sen. Marsha Blackburn (R-TN) said Wednesday.
Most economists say that while states and cities need help, they probably need less than the bill provides. Moody’s Analytics estimates the need at about $61 billion, according to the Post. The conservative-leaning American Enterprise Institute puts the number at about $100 billion, while the liberal-leaning Center on Budget and Policy Priorities thinks it’s closer to $225 billion.
Mark Zandi, chief economist at Moody's Analytics who has spoken in support of the Biden plan, told the Post that he would prefer to shuffle some of the money around, moving some of the money away from states and cities and toward longer-term plans. "If I were king for the day, I’d scale back a few hundred billion on state and local and use that money to help with the infrastructure program that’s coming," Zandi said. "That’s a more effective way of using the resources to get back to full employment."
But some liberals defend the $350 billion figure, arguing that the need is real — and that the recovery effort should aim to do more than return to the pre-pandemic status quo. "There’s no economic rationale for cutting the state and local aid down," Lindsay Owens of the left-leaning Groundwork Collaborative told the Post. "The idea we just need to get back right to January 2020, and not a dollar more, is bananas. We should try to do better than that."
Thinking longer-term: Some critics say that the Biden bill is missing an opportunity to rework some of the country’s social safety net. For example, Senate Finance Chairman Ron Wyden (D-OR) wanted to adjust the unemployment benefit provisions so that they responded to economic conditions rather than the whims of Congress, but that tweak was dropped from the bill due in part to concerns about the cost.
Other critics have focused on the bill’s failure to provide enough money for housing assistance, child poverty and health care. For example, while the bill provides $34 billion to increase subsidies on the Affordable Care Act health insurance exchanges, it provides a relatively modest $16 billion for state Medicaid programs. "Expanding Medicaid would be a much more efficient way of getting more people insured," Larry Levitt of the Kaiser Family Foundation told the Post.
White House sticks with the plan: For all the complaints, the Biden administration is showing no signs that it wants to redo the relief package. Although Biden signed off on tighter limits on relief payments in response to concerns from centrist Democratic senators, the administration continues to say that it’s far more worried about doing too little rather than too much. "We’re still at the height of a pandemic," White House Press Secretary Jen Psaki told reporters Wednesday. "We are not going to recover from this pandemic tomorrow. The economic recession will not be recovered tomorrow."
Some supporters say they’re sticking with the bill for the simple fact that political constraints make it hard to craft an alternative that is both timely and well-targeted. "This is not a perfect bill," Jason Furman, who chaired the Council of Economic Advisers under President Obama, told the Post. "If an economist was designing it from scratch today, they would design it differently. But nothing Congress does is perfect, and as written the American Recovery Plan will be a major booster shot that will hopefully help close the remaining gaps in the economy."
Quote of the Day: Powell Says Inflation Could Rise, Temporarily
"We expect that as the economy reopens and hopefully picks up, we will see inflation move up through base effects. That could create some upward pressure on prices."
– Federal Reserve Chairman Jerome Powell, indicating at a Wall Street Journal conference Thursday that inflationary pressures may rise for a time as the economy recovers. Powell said any higher inflation likely won’t be enough to prompt the Fed to raise interest rates. The prospect of rising inflation has been the subject of increased economic debate lately, and bond yields have surged in recent days as investors price in higher inflation related to continued economic recovery.
Number of the Day: 202%
That national debt is on pace to grow to more than twice the size of the economy — 202% of gross domestic product — by 2051, up from 102% this year, the Congressional Budget Office said in a report released Thursday on the long-term budget outlook. "The risk of a fiscal crisis appears to be low in the short run despite the higher deficits and debt stemming from the pandemic," CBO said. "Nonetheless, the much higher debt over time would raise the risk of a fiscal crisis in the years ahead."
- A Better Way to Support States During Downturns – Bloomberg Editorial Board
- Biden’s Relief Bill Is a Missed Opportunity – Nir Kaissar and Timothy L. O’Brien, Bloomberg
- Biden Has Finally Agreed to Slim Down Stimulus Checks. There’s a Lot More He Could Cut – Henry Olsen, Washington Post
- Newsflash: Biden Actually Is Governing in a Bipartisan Way – Paul Waldman and Greg Sargent, Washington Post
- Republicans Won Blue-Collar Votes. They’re Not Offering Much in Return – Trip Gabriel, New York Times
- Biden Is Right: A Lot of Students at Elite Schools Have Student Debt – Adam Looney, Brookings
- Fiscal Policy for the COVID-19 Economy – Howard Gleckman and Marc Goldwein, Tax Policy Center (video)
- The Biggest Obstacle to a Wealth Tax – Felix Salmon, Axios
- Republicans' New Strategy? Pointless Obstruction – Chris Cillizza, CNN
We Have a Choice Between Two Covid-19 Futures. Let’s Make the Right One – Eugene Robinson, Washington Post
- The Next Wave of Vaccine Eligibility Criteria Is a Smudgy Mess – Molly Roberts, Washington Post
- When Will America’s Cities Come Back From the Pandemic? – Megan McArdle, Washington Post
- The Inflation Regime Change Is Already Upon Us – John Authers, Bloomberg