Biden unveils $1.9 trillion economic and health-care relief package

Biden unveils $1.9 trillion economic and health-care relief package

By Erica Werner and Jeff Stein

January 14th, 2021

President-elect Joe Biden laid out a $1.9 trillion emergency relief plan Thursday night that will serve as an early test of his ability to steer the nation out of a pandemic disaster and rapidly deteriorating economy — and his promise to unite a divided Congress.

The wide-ranging package is designed to take aim at the twin crises Biden will confront upon taking office Wednesday, with provisions delivering direct aid to American families, businesses and communities, and a major focus on coronavirus testing and vaccine production and delivery as the pandemic surges.

Biden is aiming to get GOP support for the measure, although at nearly $2 trillion the price tag is likely to be too high for many Republicans to swallow. But after campaigning as a bipartisan dealmaker, Biden wants to at least give Republicans the opportunity to get behind his first legislative effort as president.

“Unity is not some pie-in-the-sky dream. It’s a practical step to get any of the things we have to get done as a country, get done together,” Biden said in an evening speech in Wilmington, Del.

“I’m convinced we are ready to get this done,” he said. “The very health of our nation is at stake.”

The package is titled the “American Rescue Plan.” Biden described it as a package of emergency measures to meet the nation’s immediate economic and health-care needs, to be followed in February by a broader relief plan he will unveil in his first appearance before a joint meeting of Congress.

Thursday’s proposal comes at a critical time for the nation. More than 4,200 people in the United States died of the coronavirus on Tuesday, a new daily record. The economic recovery appears to be backsliding, with jobless claims spiking to a new high since August, as nearly 1 million people filed for unemployment last week.

It also comes six days before Biden’s inauguration and a day after the House of Representatives impeached President Trump, highlighting the president-elect’s challenge of trying to get his top agenda item passed as the Senate is likely to be enmeshed in an impeachment trial. Biden has expressed the hope that the Senate can simultaneously move forward on his agenda while weighing impeachment, although it’s unclear how well that might work in practice.

Biden alluded only in passing to the political challenges his proposal will confront, remarking of his proposal to raise the minimum wage: “People tell me that’s going to be hard to do,” but noting that it just happened in Florida.

The plan contains a raft of provisions that build on the approximately $4 trillion Congress has already devoted to addressing the pandemic, which included a $900 billion measure Trump signed last month. Biden has repeatedly described that last bill as unfinished business, saying Thursday, “We will finish the job.”

Biden’s proposal is divided into three major areas: $400 billion for provisions to fight the coronavirus with more vaccines and testing, while reopening schools; more than $1 trillion in direct relief to families, including through stimulus payments and increased unemployment insurance benefits; and $440 billion for aid to communities and businesses, including $350 billion in emergency funding to state, local and tribal governments.

The proposal will aim to make good on Biden’s plan for a universal vaccination program, devoting $20 billion to that goal, as well as $50 billion for a “massive expansion” of testing and $130 billion to help schools reopen safely. Among the many goals laid out in the proposal, Biden hopes to deliver 100 million vaccine shots in 100 days, and reopen a majority of K-12 public schools in that time frame.

Incoming Senate majority leader Charles E. Schumer (D-N.Y.) had urged Biden to consider a higher price tag than what he was initially eyeing for the proposal, according to a person familiar with the conversation who spoke on the condition of anonymity to recount the private conversation freely. Still, the size and scope of the package exceeded the expectations of a number of outside advocates, while answering demands from economists for a major new investment to get the economy on a sounder footing.

“I know what I just described will not come cheaply,” Biden said Thursday night. “But failure to do so will cost us dearly.”

The legislation includes a number of priorities sought by top congressional Democrats, including some of the more liberal members, from increasing the federal minimum wage to $15 an hour to adding billions in funding for child care.

Biden called for increasing federal unemployment benefits from $300 per week to $400 per week for millions of jobless Americans. The benefits would be extended through September, preventing millions of people from losing their jobless aid in March, as would occur under current law. Biden’s plan states that he will also seek to link the level of unemployment benefits to general economic factors, so that benefits increase automatically when the unemployment rate spikes.

As expected, Biden’s proposal would also increase from $600 to $2,000 per person the stimulus payments approved by Congress last month. Trump enthusiastically endorsed the $2,000 stimulus payments, as did congressional Democratic leaders, but many Republicans opposed the idea. Biden’s plan would also expand eligibility for the stimulus payments to families where one parent is an immigrant, as well as to adult children claimed as dependents on their parents’ tax returns. Both categories were excluded in the last relief packages due to GOP opposition. About 13.5 million adult dependents were excluded from the checks as a result, including millions of disabled people.

A major expansion of tax credits is also included in Biden’s proposal, for children and lower-income workers. Biden’s plan would expand a tax credit for children to $3,600 a year per child under 6, as well as $3,000 a year for children under 17. It would also extend eligibility for the credit to millions of very poor families and would dramatically boost the Earned Income Tax Credit, a benefit for workers, from $530 to $1,500.

Biden’s plan also contains new initiatives aimed at buoying the ailing U.S. economy, such as a combined 14 weeks of paid sick and family medical leave for millions of workers. It would provide grants to more than 1 million small businesses, and approve about $35 billion toward making low-interest loans available, particularly for clean-energy investments. Biden’s plan would put tens of billions of dollars into other needs facing the country, from food and water assistance, food stamps, and funding for U.S. territories such as Puerto Rico.

The size of the package and its embrace of multiple liberal priorities that are anathema to Republicans — including a large sum for state and local governments — raises questions about how much bipartisan support Biden will be able to get for the proposal. He is already facing pressure from liberals on Capitol Hill who want to use Democrats’ newfound control of Congress to push through aggressive and costly legislation.

Sen. Bernie Sanders (I-Vt.), who will chair the Budget Committee, has said he is working to put together a massive stimulus bill that could pass under special budget rules with a simple majority vote in the Senate, instead of the 60-vote margin normally required.

Biden, however, wants to try for a bipartisan majority on his first bill — although his team appears to have conducted little outreach to congressional Republicans on the plan. Democratic aides say that if Republicans do not appear willing to cooperate, they can shift gears quickly and move to “budget reconciliation,” the procedure that would allow them to pass legislation without GOP votes. That’s how Republicans passed their big tax-cut bill after Trump took office, and how President Barack Obama passed the Affordable Care Act.

The Senate will be divided 50-to-50 between Republicans and Democrats in the new Congress, giving Democrats control because Vice President-elect Kamala D. Harris will have the tie-breaking vote. Democrats’ 222-to-211 majority in the House is the narrowest for either party in years.

With those margins, even holding enough Democrats together to pass legislation along party lines could prove a challenge. The most conservative Senate Democrat, Sen. Joe Manchin III (W.Va.), has already expressed skepticism about the need for a new round of stimulus checks, while Rep. Alexandria Ocasio-Cortez (D-N.Y.) said Thursday that Biden isn’t going far enough by proposing $1,400 checks, even though Biden’s approach means most people will end up with $2,000 given the earlier batch of $600 checks. “$2,000 means $2,000. $2,000 does not mean $1,400,″ Ocasio-Cortez said.

Foreshadowing the legislative fight to come, Biden’s plan quickly attracted criticism from advocates on the right and the left. Stephen Moore, an outside economic adviser to Trump, slammed it as “fiscally irresponsible.” Mark Wolfe, head of the National Energy Assistance Directors’ Association, said he was disappointed the proposal didn’t include more money for rental assistance or low-income energy assistance.

There was little immediate reaction from congressional Republicans. Rep. Kevin Brady (R-TX) was one of the few to issue an immediate reaction, saying Biden’s proposal “does nothing to save Main Street businesses, get people back to work or strengthen our economy.“

”Special interests and liberals are cheering,” he said in a statement. “The jobless and Main Street are left shaking their heads.”

The $130 billion in K-12 funding in the proposal is aimed at paying expenses associated with mitigating the spread of virus inside schools, such as improving ventilation systems. Although Biden has said he wants to open a majority of schools, there is no federal tally of how many are open to date, and some research suggests a majority of them may be offering in-person options already.