President Biden is an unusual position – the weaker the economy is perceived, the stronger the political justification for his COVID-19 stimulus package.
The government took advantage of a mediocre job report on Friday to argue that the full $ 1.9 trillion package proposed by Biden is essential.
Biden sketched the kind of gloomy picture that most presidents would normally suppress while speaking in the State Dining Room at the White House on Friday.
“It is very clear that our economy is still in trouble,” he said.
He went on to describe “a huge pain” in the country, covering not only high levels of unemployment and 15 million people behind in rent payments, but also rising rates of suicide and domestic violence.
Politically speaking, the president’s calculation is clear. He is unlikely to be blamed for the current economic conditions, as he has just taken office, and painting the darkest picture possible explains the need for extensive action.
The Senate paved the way for a potential party vote on Biden’s stimulus measures in the early hours of Friday, when Vice President Harris gave the decisive vote on crucial amendments.
In his remarks on Friday, Biden said: “I would like to do this with the support of Republicans … but they are simply not willing to go as far as I think we have to go.”
He later added that “what the Republicans have proposed is to do nothing or not do enough”.
Sen. Susan Collins
Susan Margaret CollinsSanders criticizes Democrats willing to reduce eligibility for Biden stimulus checks double below normal in the White House The Memorandum: Bad Jobs Report Boosts Biden’s Stimulus Case MORE (Maine) and nine other Republican senators introduced a compromise bill that is priced at approximately a third of Biden’s proposal. Other Republicans have simply registered their opposition to the Biden measure, which they argue is greater than necessary.
Rachel Greszler, a researcher at the conservative Heritage Foundation, wrote about the dangers she sees in raising the federal minimum wage to $ 15 an hour. In his judgment, such a move would more strongly affect some of the industries already most affected by the pandemic, such as hotels, restaurants and clothing retailers.
The chances that the $ 15 minimum wage will be enacted soon dropped dramatically. Sen. Joe Manchin
Joseph (Joe) ManchinSanders criticizes Democrats willing to reduce eligibility for stimulus checks The Memorandum: Bad Jobs Report Boosts Biden’s Stimulus Case Biden expects minimum wage increases to be withdrawn from the final aid bill (DW.Va.) indicated that he would not support him and even his strongest defender, Sen. Bernie Sanders
Bernie Sanders Sanders criticizes Democrats willing to reduce eligibility for stimulus checks. Sunday program preview: Budget resolution paves the way for 0.9 trillion stimulus; Senate prepares for impeachment trial The Memo: Report of bad jobs drives Biden’s stimulus case MORE (I-Vt.), He accepted that it cannot happen immediately.
Still, conservatives like Greszler have general concerns about excessive government spending if a major stimulus measure is passed.
She argued that a debt crisis for the United States is “definitely plausible in the not too distant future” and that the way back from the crisis is mainly through an effective vaccination program that will accelerate the full reopening of the economy.
“The stimulus bill they are talking about now is not timely or targeted, and is just being used to throw a ton of wish list items into a package,” she said.
The skeptics case received unexpected help from Larry Summers, who served as Treasury secretary in the Clinton administration and was one of President Obama’s top economic advisers.
In an opinion piece in the Washington Post published on Thursday, Summers argued, in essence, that the current proposal was too big.
Summers, in a sense, was presenting an optimistic case. Unemployment is on the decline and “demand is likely to strengthen further,” he wrote.
The dangers, he said, were that massive public spending could trigger inflationary pressure and leave less money to tackle other priorities later.
Summers has always been viewed with distaste by progressives, who blame him for promoting deregulation under Clinton and curbing Obama’s response to the Great Recession, among other things.
There was firm resistance from the White House against its last intervention.
Jared Bernstein
Jared BernsteinThe memo: Bad jobs report drives Biden’s stimulus case More than 200 Obama employees sign letter supporting Biden’s stimulus plan., a member of the Biden Council of Economic Advisers, said during a meeting at the White House on Friday that Summers was “just wrong” in suggesting that the president does not care about the threat of inflation.
Asked about Summers’ apparent belief that the Biden government was overreacting in his proposal, Bernstein replied: “No, I strongly disagree with that statement. … We have to hit hard, we have to hit hard. “
Other liberal-minded economists see it in the same way.
“The Biden plan is an intentional exaggeration because, as I understand it, they think the economy has cooled too long for a long time – since the Great Recession – and we need a very strong period of growth to repair the damage,” said Josh Bivens, research director of the Institute of Economic Policy, with a leftist tendency.
Bivens also questioned the idea that a large measure of stimulus would now deplete Biden of political and literal capital later. The public’s perception that the White House had faced current economic problems effectively “would strengthen its speech” for further action, said Bivens.
Among Democrats, there is clearly an appetite for action, whether Republicans like it or not.
Many on the left cite the Obama administration’s experience, where they say the White House has made many concessions in pursuit of republican cooperation that never materialized.
Even now, “I believe the Republicans have never taken the negotiation of an economic recovery package seriously,” said Democratic strategist Julie Roginsky.
“We’ve already seen this [Senate Minority Leader] Mitch McConnell
Addison (Mitch) Mitchell McConnellRepublicans seek to punch Democrats in reopening schools The Republican Party blames the White House team for the lack of a COVID-19 relief deal. [R-Ky.]”, Added Roginsky. “He knows very well that if the economy sinks in the next two years, the chances of him taking back a majority in the Senate are better.”
The Memo is a column reported by Niall Stanage.