Monday, January 18, 2021

Biden to begin presidency pushing emergency relief, other ambitious economic plans

Jan 15. 2021
President-elect Joe Biden speaks about the economy at the Queen in Wilmington, Del., on Dec. 4, 2020. MUST CREDIT: Washington Post photo by Demetrius Freeman.
President-elect Joe Biden speaks about the economy at the Queen in Wilmington, Del., on Dec. 4, 2020. MUST CREDIT: Washington Post photo by Demetrius Freeman.
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By The Washington Post · Jeff Stein, Erica Werner

WASHINGTON - President-elect Joe Biden will arrive in Washington with an ambitious economic agenda, starting with plans to prod Congress to pass a multitrillion-dollar coronavirus relief bill before moving on to enact his other broad proposals to overhaul the U.S. economy.

Biden's presidency comes at a precarious moment for the nation, with the economy at risk of sliding more deeply into an already devastating recession or expanding into a healthy recovery.

The economy lost 140,000 jobs in December, the first month of job losses since the early months of the coronavirus pandemic, even as infections soared with more than 360,000 already dead. Much of the effort to right the economy will depend on whether the Biden team can get the rollout of the coronavirus vaccines on track, as well as factors outside the administration's control, including the spread of a potentially more contagious form of the virus and a global economic downturn.

Although Biden's initial relief package will center on measures such as increasing unemployment insurance and cutting Americans new stimulus checks, he also is expected to push later this year for more permanent economic reform such as investment in infrastructure, clean energy jobs, the health-care system and other domestic priorities. He will aim to raise the minimum wage to $15 an hour and rewrite immigration laws. Overall, Biden will attempt to reverse many of the Trump administration's economic policies, toward a more activist role for the government.

Biden has made clear that by far his top economic priority is addressing the coronavirus pandemic and its far-reaching fallout. His capacity to do so will set the tone for his entire presidency, and determine whether the nation's economy can rebound from the pandemic's grasp.

"Millions of Americans are still hurting through no fault of their own," Biden said last week in Wilmington, Del.

"The basic story is simple," he said. "If we don't act now, things are going to get much worse and harder to get out of the hole later, so we have to invest now."

A Purple Line overpass in Riverdale Park, Md., near Kenilworth Ave. and Route 410 sits unfinished on June 10, 2020. MUST CREDIT: Washington Post photo by Toni L. Sandys.

Biden has sketched out the broad outlines of a relief bill he said will cost trillions of dollars. It would increase one-time stimulus payments for Americans to $2,000, extend enhanced unemployment insurance set to expire in March, and include assistance for school districts, small businesses, and state and local governments. The legislation would invest heavily in vaccine distribution, as Biden aims to make up for lost ground where the Trump administration has failed to meet its own goals.

"Getting the virus under control and getting the vaccines right is the critical thing to getting the economy back on track. They need to do this, and they need to do it fast," said Constance Hunter, chief economist at KPMG, adding that the nation is "nowhere close" to vaccinating as many people as it should be daily.

Biden has also proposed temporary increases in Social Security payments to seniors and student loan forgiveness of as much as $10,000 per person, and has called for expanding emergency sick leave and eliminating patient costs for covid-19 treatment.

The legislation would come on top of about $4 trillion Congress already has devoted to addressing the pandemic, most recently with a $900 billion measure President Donald Trump signed in December. Many Republicans are reluctant to spend anywhere near the amount of money Biden is discussing, and the proposal is sure to renew long-simmering disputes about the federal deficit, which ballooned under the Trump administration beginning with the GOP's unpaid-for tax-cut law.

Biden has made clear that although future programs may be offset with tax increases or other measures, the coronavirus legislation will constitute emergency spending and will be added to the deficit like the previous pandemic stimulus measures. The final cost of the bill might eliminate hopes of bipartisan support and force him to attempt to pass the legislation with only Democratic votes.

Democratic control of the House and the Senate would allow him to do that, but the margins in both chambers are narrow and divisions within the Democratic Party are deep and, in some cases, acrimonious. Therefore, whether Biden will be able to get his coronavirus package passed will stand as an early test of the legislative prowess and dealmaking ability he boasted of bringing to the White House.

"We have these transformational moments, these historical pivots, maybe once in a generation," said Timothy Naftali, a clinical associate professor of history and public policy at New York University, citing political reforms in the 1960s and after the Watergate scandal in the early 1970s. "Biden and [Vice President-elect Kamala] Harris do not have all the votes they need to enact the progressive agenda, but they have the opportunity to pass legislation that can shape the post-pandemic economic recovery in a way that can be transformational."

Senate Minority Leader Chuck Schumer, D-N.Y., who will become majority leader now that Democrats have won control of the Senate, leaves the Capitol after a vote on Jan. 1. MUST CREDIT: photo for The Washington Post by Amanda Voisard.

Biden will take office with the House and the Senate both controlled by Democrats, which makes the path for his agenda much smoother than if Republicans were in charge. But the margins are exceedingly narrow. The Senate will be divided 50-50 between Republicans and Democrats, with Harris as the tie-breaking vote for Democrats, giving any individual Democratic senator the ability to hold up legislation with demands. The most conservative Democratic senator, Joe Manchin of West Virginia, has already voiced reservations about the size and scope of Biden's plan for stimulus payments, forecasting tricky negotiations ahead on that and any number of other issues.

Although major legislation in the Senate usually requires 60 votes, Biden and incoming Majority Leader Chuck Schumer, D-N.Y., will have the ability to use special budget rules to pass at least two major packages this year with a simple majority. The first is expected to be devoted to Biden's coronavirus relief legislation, while the second is expected to become the vehicle for his other major legislative priorities, including infrastructure and efforts to fight climate change.

That second "budget reconciliation" package also could take in Biden's health-care proposals, which would constitute the largest expansion of federally run health care in decades, including a government plan that millions of Americans could join. Biden's proposal would allow companies and patients to buy directly into the government plan, aiming to force private insurers to lower their prices, while also making the subsidies on the Affordable Care Act exchanges more generous.

Biden also has called for federal spending to repair and upgrade infrastructure - repairing roads, bridges and the nation's electrical grid - which also spurs job growth, economists say. That effort probably would be coupled with an environmental push to encourage move U.S. energy sources away from fossil fuels. Biden has called for trillions in new spending to put the nation on a path to having net-zero emissions by 2050.

Some of these efforts would be financed by proposed tax increases, including Biden's call to increase the corporate tax rate from 21% to 28% after Republicans cut it from 35% to 21% in 2017. Biden has proposed more than $2 trillion in new tax increases, although it is unclear how many of them would be included in a broader legislative package.

Known as a pragmatic dealmaker who defeated a slate of more liberal opponents in the Democratic presidential primary, Biden will face pent-up pressure from those further to the left. For the past two years, bill after bill passed in the Democratic-controlled House and died in the GOP-led Senate.

"There is no excuse for Biden not to deliver an economic recovery package that confronts wage stagnation, the climate crisis, systemic racism and public health. That is what progressives are hoping to see," said Waleed Shahid, spokesman for the progressive group Justice Democrats. At the same time, Biden must step carefully to retain support from Manchin and other moderates, and avoid offering ammunition to Republicans, who already are describing his agenda as socialism.

Health-care workers (some with appointments after dusk) wait in line to get coronavirus vaccines at the Fairfax County Government Center in Fairfax, Va., on Jan. 2. MUST CREDIT: Washington Post photo by Michael S. Williamson.

Republicans traditionally outpoll Democrats on the economy, which remained a bright spot for Trump through much of his administration. Even during the pandemic, he scored relatively high marks from voters on the economy. Trump's connection with working-class voters on economic issues helped him beat Hillary Clinton in 2016, while Biden won on his ability to connect with those voters.

Democrats are desperate to claim a political advantage on economic issues and are hoping that Biden will be able to do so.

"If we get the economics right, if we really stay on that and communicate consistently on it, we have the ability to permanently make ourselves the majority party and shore up weaknesses among blue-collar voters, independents and Latino voters," said Celinda Lake, a Democratic pollster.

"We need to establish an economic message to win in 2022, or in 2024 or 2044. It's the most important thing."

Biden may have a short window to accomplish all his goals. The first two years of a president's first term are typically the most productive. Because Democrats' hold on Congress is particularly narrow, losing either chamber in the 2022 midterm election could leave many of Biden's incomplete agenda items to languish.

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