President-elect Joe Biden has begun to reveal an ambitious legislative agenda – and while he has signaled hope for bipartisan support, several Senate Republicans are already discarding their newly proposed coronavirus relief plan.
Biden on Thursday unveiled a $ 1.9 trillion proposal, which will include a $ 1,400 stimulus check; billions in funding for vaccine distribution and testing; and additional assistance to state and local governments. The goal is to address the huge economic downturn that the country continues to experience with the coronavirus pandemic and complement the federal aid that was distributed through the $ 2 trillion CARES Act and a second $ 900 billion measure last year.
“It’s not just that smart fiscal investments, including deficit spending, are more urgent than ever,” said Biden in a speech promoting the measure, dubbed the “American Rescue Plan” last week. “It is that the return on these investments – in jobs, in racial equality – will avoid long-term economic damage and the benefits will far outweigh the costs.”
In those same remarks, Biden emphasized that 18 million people are receiving unemployment insurance and 400,000 small businesses have closed for good – both indications that millions of Americans still need additional support.
Several Democrats responded to the plan by urging Biden to consider even more expansive measures, including provisions such as recurring stimulus checks and baby bonuses, which would establish a federally funded savings account for each newborn. Republicans, however, are beginning to take a stand against the proposal – echoing concerns they have long voiced about how such spending could increase national debt.
“Exploding another $ 2 trillion in borrowed or printed money – when the ink on the December $ 1 trillion aid account barely dried and much of the money has not yet been spent – would be a colossal and economically damaging waste,” Sen. Patrick Toomey (R -PA) said in a statement.
Senate majority leader Mitch McConnell has yet to comment on the proposal, although he has been reluctant to pass major relief projects in the past and cited fractures at his conference on the subject as the reason.
The setback that has arisen so far suggests that the Republican opposition could prevent this bill from being passed on a regular basis: since most legislation requires 60 votes to pass the Senate, Democrats would need 10 Republicans to support the measure, given the 50-50 of the Divided Chamber. If they don’t get that support, Democrats may well have to consider other procedural options that would allow them to bypass the 60-vote rule, including budget reconciliation.
Republicans are reinforcing their fiscal conservatism, again
Like Toomey, other Republican lawmakers – including Senator Ted Cruz (R-TX) – have signaled that they are interested in increasing their focus on fiscal conservatism (essentially limiting additions to the national debt), now that Democrats have recovered the White House .
Many in the party appear to be doing so, although such actions contradict the positions they took during the Trump administration. Trump’s tax cuts in 2017 were estimated to add between $ 1 trillion and $ 2 trillion to the national debt, for example, according to the Tax Policy Center.
Republicans’ renewed focus on debt became increasingly apparent in the past year as Republican Party senators sought to limit the scope of the second stimulus package: Republican lawmakers repeatedly pushed for legislation less than $ 1 trillion. .
And, as Bloomberg reported at the time, this opposition led to speculation about whether such positions meant that Republicans would re-establish themselves as the “no party” under Biden’s presidency. The first indications seem to suggest that the Republican Party will actually adopt this strategy, with which it tried to block many of the Obama administration’s legislative efforts.
“We can’t just launch massive spending on it, without responsibility for the current and future American taxpayer,” Senator Rick Scott (R-FL) told the Washington Post recently about the Biden coronavirus relief package.
While there is some debate among experts about how much help for coronavirus is needed, as Vox’s Dylan Matthews explained last spring, debt concerns are difficult to argue in the current economic moment due to some factors, including lower interest rates :
Certainly, there are times when worrying about debt makes sense. Countries like the United States, which print their own currency, can, in principle, always pay their debts, but there is a risk that this involves printing so much money that it results in hyperinflation. If this were a real danger, the United States should think twice before massively expanding the deficit.
But inflation, let alone hyperinflation, is not a real danger right now. According to the Fed’s preferred measure, inflation was well below its 2% target even before the coronavirus arrived.
Some Republicans could hire more relief – but it’s unclear whether Democrats can reach 10
A segment of the Republican conference might be willing to work with Biden on more relief, although there is likely to be an impulse to restrict the measure in return for his support. Biden’s initial offer calls for an increase in the minimum hourly wage to $ 15 – a clause that has generated significant Republican resistance in the past, for example. It is possible that initiatives like these could be reserved for future legislation in order to gain support from the GOP for a broader package.
“There are many things in this package that I can support. Some of which I can’t. We are not going to rescue a lot of badly managed blue states, ”said Sen. Lindsey Graham (R-SC) on Friday.
Previously, Sens. Mitt Romney (R-UT), Susan Collins (R-ME), Lisa Murkowski (R-AK) and Bill Cassidy (R-LA) were part of a bipartisan group that helped draft an aid commitment bill in the last year. It included some of the provisions required by Biden, and they are among those that may be more open to considering additional support this time as well. Senators Marco Rubio (R-FL) and Josh Hawley (R-MO) also supported a bill to increase the recent round of stimulus checks from $ 600 to $ 2,000 – another important part of Biden’s plan.
Whether Democrats and Republicans can agree on the legislation and get the votes needed to reach the 60-person limit required to pass it, however, is an open question. If they can’t, Democrats can choose to move parts of that legislation forward through the process known as budgetary reconciliation.
Unlike most bills, budget resolutions can be passed by the Senate with a simple majority of votes – although there are limitations on what they could include. Following this path, Democrats could pass a bill with the 50 members of their caucus and a tiebreaker from elected vice president Kamala Harris.
“Not everything can go through budget reconciliation,” wrote Dylan Matthews of Vox. “This probably excludes measures like an increase in the minimum wage, or the creation of a state in DC and Puerto Rico, or updates to the Voting Rights Act, or gerrymandering reform.”
As Matthews notes, however, any provisions related to spending and taxes that would expire in 10 years, are deficit neutral and do not make changes to Social Security may all be eligible. This means that certain aspects of the stimulus proposal – such as another round of checks, as well as an extension of paid sick leave – could go through budgetary reconciliation if that is the only option available to Democrats.