But while executive actions have a big impact – millions of Americans are behind on rent and mortgage payments and tens of millions more have student loan debt – it is clear that their effect on the economy as a whole will be limited, at best. hypotheses.
“It’s on the margins,” said Diane Swonk, chief economist at Grant Thornton. “It needs to be more than that.”
What the country needs most is an influx of money, say Swonk and other economists, but for this the new president depends entirely on lawmakers if he wants to turn the economy around.
And despite the small majority of Democrats in both chambers, Biden’s path to Capitol victory remains dotted with landmines. He could try to work with Republicans and risk a stalemate or months of inactivity, irritating his own base. He could try to force the passage of a bill without a Republican vote, blowing up his own promises of unity and bipartisanship in the first weeks of his term. Or, as progressive Democrats fear, he could seek a deal – at the risk of a diluted package that takes months to pass, omits some priorities and unleashes only slow economic growth.
Against a backdrop of high unemployment, low inflation and interest rates close to zero, “he is shouting that lawmakers should put their foot on the fiscal policy accelerator and press,” said Mark Zandi, chief economist at Moody’s Analytics.
Biden “cannot press the accelerator alone,” said Zandi. “He desperately needs Congress to start working here.”
Biden’s team is aware of the fact that executive orders alone will do little to contain the crisis or reverse the damage. But they see them as a step in the right direction as they pressure lawmakers to do more.
“We are acting where we can, but there are 30 million of our neighbors starving,” Brian Deese, director of the White House National Economic Council, wrote on Twitter. “Congress needs to act decisively to contain this crisis.”
And so far, at least, it remains uncertain how much lawmakers are willing to spend and how quickly they will be able to act.
Biden has asked lawmakers to follow his American Rescue Plan, which includes hundreds of billions of dollars for the distribution of the coronavirus vaccine, $ 1,400 stimulus checks for American workers and expanded unemployment benefits, among other policies. But members of both parties criticized the package as too expensive and, especially for Republicans, too close to the $ 900 billion aid bill approved in December.
A group of Senate Republicans is seeking a meeting with the president to start bipartisan negotiations on a less expensive relief bill, although Democratic leaders are prepared to pass an aid package with all Democratic votes. In a letter sent to Biden on Sunday, 10 Republicans, led by Senator Susan Collins of Maine, told the president that they are working on a counterproposal focused on spending $ 160 billion on vaccines, testing, treatment and personal protective equipment.
It will probably take weeks or even months, then, before a new invoice reaches Biden’s desk to be signed. And the delay has sparked more discussions about what the president could do on his own to help the economy.
A central objective of Biden’s executive orders has been to organize federal agencies to ensure that aid that has already been allocated flows as smoothly as possible through existing programs. This includes asking the Department of Agriculture to recalculate how it distributes food stamps; direct the Department of Labor to resolve issues that may block unemployment benefits; and calling on the Treasury Department to ensure that more Americans eligible to receive stimulus checks can receive them.
“Push the limits, make programs reach as many qualified people as possible and get rid of bureaucratic obstacles – that’s a big part of what they can do through executive action,” said Andrew Stettner, senior member of Century Foundation, a progressive think tank.
Still, he says: “To speed up the recovery, they need investments from Congress. They need changes in the law. “
Certainly, given the nature of the recession and how it is linked to the pandemic, any measures to combat the coronavirus will stimulate the economy, because they can make more Americans leave their homes, return to work and spend more money.
“The biggest impact the government can have on the economy is the vaccination rate,” said Constance Hunter, chief economist at KPMG.
Much of that effort also depends on Congress approving more money to finance the distribution of vaccines. But Biden also signed an executive order to invoke the Defense Production Act to increase the supply of all the materials needed to put vaccines in the arms, which could also facilitate the process.
He could also work with the Treasury to postpone the filing deadline beyond April 15, as President Donald Trump did at the start of the pandemic last year, or to “waive or change or change certain tax obligations” said Stettner.
“People are seeing this as an example of how you can stimulate the economy even without Congressional action,” he added.
Although he cannot spend new money without Congressional help, Biden could play with funds that have already been allocated for other purposes. Trump signed an executive order late last year to use a combination of humanitarian aid funds and state dollars to increase payments for unemployed workers. Although it worked for a few weeks, the money ran out quickly – a problem that Biden would also face if he tried to divert funds elsewhere to be used for economic relief.
“It was more symbolic than real,” said Swonk of Trump’s move. “And over time – because you’re also trying to get around Congress, which ultimately controls the purse strings – you’re also going to make more enemies.”
All of this means that, in addition to urging Congress to act quickly and decisively, Biden has few options of his own to face the economic crisis head-on. And perhaps the most powerful step he can take unilaterally is both about messages and about money.
“Executive orders aim to signal that the government is fully engaged and will do whatever is necessary to ensure that the economy gets back on track,” said Zandi. “He is signaling that help is on the way.”