Biden has $ 1.9 trillion economic bailout – and a path for it – Quartz
As Democrats unexpectedly set their sights on controlling both houses of Congress for the first time in more than a decade, US President-elect Joe Biden has willing an ambitious plan to turn the economy around in the face of a worsening health crisis.
Biden described the details of his vast program in the context of rising unemployment claims in the United States and deaths from Covid-19. “The crisis of deep human suffering is in sight. There’s no time to lose. We must act and we must act now. This is what economists tell us, ”he said Thursday evening in a speech.
The $ 1.9 trillion aid package, which he called the “US bailout,” will include a new round of stimulus checks, more than $ 400 billion to speed up vaccine production and distribution and safely reopening schools, increased unemployment benefits, $ 350 billion to bolster besieged city and state government budgets, and increased subsidies for child care.
Beyond the initial stimulus package, Biden’s team said his administration would tackle a longer-term plan later in the year targeting tax hikes on corporations, infrastructure, clean energy, health care and education.
A congress creature, Biden stressed his desire for support from lawmakers. “I’m really confident together, together we can make it happen. “
The scope and expense of Biden’s plans will make passing legislation difficult, even with a majority in both houses of Congress after winning two seats in Georgia’s Senate in a special election last week. In the wake of last year costly relief measures for the Covid-19, the price of Biden’s proposal far exceeds the Obama administration’s 2009 stimulus package.
Here’s a look at what the new president could do quickly to stimulate the economy, and how he could go about it.
The cost of containment of the Covid-19
Containing the spread of Covid-19 is a top priority in Biden’s plan to revive the economy. He has proposed investing $ 20 billion to boost vaccine production and distribution through community immunization centers across the country, a 100,000-employee pandemic-response “public health jobs program” focused on vaccine awareness and contract research; and implement nationwide mask mandates by imploring governors and mayors. It would also provide emergency paid time off to help Americans hampered by the economic impact of Covid-related hospitalizations and deaths.
Some of these could be adopted by decree (e.g. through the Defense Production Act), and some through the budget legislation process known as reconciliation, although Biden’s preference is to seek broad bipartisan support.
Biden wooed voters with the promise of $ 2,000 stimulus checks while turning down newly-elected Georgia Senators Jon Ossoff and Raphael Warnock. “That $ 2,000 stimulus check – that money would come out immediately, to help people with real problems,” Biden said in Georgia during Senate campaigns. “Think about what that will mean for your life: put food on the table, pay rent. “
New Senate Majority Leader Chuck Schumer has said checks for $ 2,000 (an improvement over the already approved $ 600 in direct aid to all eligible Americans) will be one of Democrats’ top priorities , although it remains to be seen if or how higher income individuals would be included.
Minimum wage and unemployment benefits
As part of the initial back-up plan, Biden is proposing to raise the federal minimum wage to $ 15 an hour. He wants to extend federal unemployment benefits to $ 600 per week, from $ 300 per week currently, until the end of September. And he wants Congress to allow the automatic renewal of emergency economic measures, depending on the state of the recovery.
Support for small businesses
Biden proposed to add a $ 30 billion small business opportunities fund to invest in entrepreneurs and small businesses. Unlike the recently restarted paycheck protection program, this initiative would ensure relief for all eligible businesses.
As part of the Covid relief, the Trump administration, by executive order, postponed student loan payments until the end of January. Biden’s transition team said extending this policy through executive action would be one of its first steps after Biden’s inauguration. “On day one, the president-elect will call on the Department of Education to extend the existing pause on student loan payments and interest for millions of Americans with student loans,” said David Kamin, new deputy director of the National Economic Council, in a press release. Report Last week.
Beyond that, Biden offered to forgive all Americans $ 10,000 in federal student debt. As with the Covid relief measures, he said he preferred to work with Congress on loan cancellation. Schumer and other Democrats have argued for the use of executive power to write off most or all of Americans’ student debt within the first 100 days. Since the bulk of the $ 1.6 trillion in student debt is held by the U.S. government, these advocates argue the Secretary of Education has the power to cancel it.
For his part, Biden questioned the legality of such a decision. “I’m not sure about that. I would be unlikely to do that,” he told reporters during a conference call in December.
Corporate tax increase and household tax credit
Biden campaigned to raise taxes on corporations and top incomes. His proposals would reverse the tax cuts from the Trump administration’s 2017 tax overhaul and raise the corporate tax rate to 28% from 21%. He pledged not to raise taxes for people earning less than $ 400,000 a year, although analysts differ on how the increases would affect different income levels.
Biden also proposed various tax cuts and tax credits for low- and middle-income families, including a tax credit for child care, renters and first-time buyers. The child care tax credit would total $ 8,000 per family for one child or $ 16,000 for two or more children. Families earning between $ 125,000 and $ 400,000 would receive a smaller part.
Biden now enjoys a 50-50 Senate (with the addition of the decisive vote of Vice President-elect Kamala Harris) and a slim Democratic majority in the House. It is therefore likely that his appointments to the economic cabinet will be quickly confirmed. It also gives Democrats the power to control the Senate calendar and pass certain expenditure legislation with a simple majority using reconciliation, bypassing the 60 votes normally required to close the debate and go to a vote.
As a result, Biden has more leeway to quickly enact major legislation, without resorting to executive decrees and prolonged bipartisan compromise. Calls for political unity could also work to Biden’s advantage, following the storming of Capitol Hill last week that rocked Republicans and Democrats alike.
Still, a razor-thin Senate majority could temper Biden’s ambitions, giving budget-conscious Democrats the power to wield disproportionate influence over spending in areas where Republicans are unanimously opposed. When Senator Joe Manchin, a Democrat from West Virginia, bristled at the “trillions of dollars” Biden pledged last week to spend on an economic relief plan, including $ 2,000 stimulus checks , the markets shuddered. “I don’t know where the hell the $ 2,000 came from. I swear to God no, ”he told the Washington Post. “It’s $ 400 billion more.” Manchin suggested later it was open to stimulus checks if it was limited to households in need.