House Democrats on target to pass groundbreaking, essential COVID-19 relief by end of month
House committees have completed much of the work to draft the pieces of President Joe Biden’s $1.9 trillion COVID-19 relief plan into legislative text. Next stop is the Budget Committee where it will be combined as a single package, slated to pass in the House before the end of the month.
The highlights: $1,400 survival checks to most Americans, with decreasing payments for individuals making more than $75,000/year ($150,000 for couples) and cutting off at $100,000 ($200,000 for couples) in income. That will be based on 2020 income for people who have filed prior to the checks being cut. Those who haven’t will eventually get the full amount after they’ve completed their returns; $400/week supplements to unemployment insurance checks through August 29; $350 billion for state, local and tribal governments; $20 billion to speed up the national vaccination program; and $170 billion to help schools and colleges reopen safely. The big highlight, potentially groundbreaking and extremely smart, is the expansion of child credits to more families, with larger checks. Lower-income families will finally be able to get the full credit of $3,600/annually for every child under 6, and $3,000 for children 6-17. Those payments will come every month (or as frequently as possible if an underfunded and overburdened IRS can’t feasibly provide them monthly).
Like the survival checks, the child credit would be means-tested to phase out starting at $75,000 for a single filer, and $150,000 for joint earners. That would make the credit available to 27 million children in low-income families, the Center on Budget and Policy Priorities estimates, “including roughly half of all Black and Latino children—whose families now don’t get the full credit because their parents don’t earn enough.” Nearly 10 million children would be lifted to or above the federal poverty line, “including 2.3 million Black children, 4.1 million Latino children, and 441,000 Asian American children.”
There are 1.1 million people living in “deep poverty,” whose families will be lifted to 50% of the poverty line. Republicans will argue that this is a disincentive to work because that’s always the excuse of Republicans to punish poor people. Instead, it punishes millions of low-income workers. To use an example from CBPP: “A single mother of a toddler, who earns $10,000 a year providing in-home care to older people (with work hours that fluctuate significantly from month to month), now receives a Child Tax Credit of $1,125. Under the Biden plan, she’d receive $3,600, a gain of $2,475.”
Those handful of Republicans who have engaged enough to be flattered by attention from Biden offered up a paltry $600 billion, which Biden politely dismissed, holding firm to his promise of big, bold relief. But with a smile that seemed to mollify the Republicans. “The president was very gracious,” Republican Sen. Bill Cassidy, told The New York Times. “If we’re going to go forward as a country, we have to do a better job than we’ve been doing of figuring where those who disagree with us are coming from.” They are unlikely to lend any support to Biden’s plan, but it won’t be because of lack of courtesy on his part.
That’s despite the fact that the plan will do all the things they’ve been clamoring for, namely schools reopening, but which they’ve been completely unwilling to help make happen. It’s going to take vaccinations and money for schools and businesses to reopen. It’s going to take infrastructure work to bring ventilation systems up to par in buildings to make them safe. It’s going to take funding to state and local governments so that they can rehire all the public workers, including health workers, who have been laid off or furloughed because of plummeting revenues. It’s going to take people having some money in their pockets to spend at the businesses the Biden plan will also help. There’s another round of $15 billion for the airline industry; $25 billion for bars and restaurants with grants that can be used on payroll, rent, utilities and other overhead; another $7.25 billion for the Republican-created Paycheck Protection Program. (Disclosure: Kos Media received a Paycheck Protection Program loan.)
It would be pretty dumb politics for Republicans to fight all this, to refuse to be a part of the nation’s recovery from the pandemic. It would be criminal for a Democrat to refuse to help Biden begin the end to income inequality in the country (looking at you Sens. Kyrsten Sinema and Joe Manchin). That includes the minimum wage increase, particularly when Biden is offering the concession of having the ramp up to $15/hour take a little longer. “No one should work 40 hours a week and live in poverty,” Biden said at Tuesday night’s town hall in Milwaukee. “But it’s totally legitimate for small-business owners to be concerned about how that changes.”
“Let’s say you said you’re going to increase the minimum wage from $7.25 an hour between now and the year 2025 to $12 an hour, to $13 an hour—you’d double someone’s pay and the impact on business would be absolutely diminished, and it would grow the GDP,” Biden said. He is, however, still behind a $15/hour minimum wage, he reiterated. The Congressional Budget Office said that the minimum wage increase alone would lift 900,000 people out of poverty and raise incomes for another 17 million.
The CBO also said, in answer to a request from Sen. Bernie Sanders, that raising the minimum wage would have “broad economic effects” that would impact most parts of the federal budget and, crucially, would have more of an economic impact than two actions the Republicans took using budget reconciliation in 2017: zeroing out the penalty for carrying insurance under the Affordable Care Act and drilling in the Arctic National Wildlife Refuge. Here’s why that’s important—those things were allowed by the Senate parliamentarian to remain in the Republicans’ budget reconciliation bill that dramatically cut taxes for the wealthy and corporations.
So it was smart thinking on Sanders’ part to have the CBO weigh in on these provisions as he seeks to include the $15 minimum wage, a provision that arguably does not qualify to be included in a budget reconciliation bill because of arcane Senate rules. Which also happens to be the main thing Democrats Sinema and Manchin are bitching about, Senate rules. This statement from the CBO gives Sanders and Democrats every reason to include the provision and force Manchin and Sinema to either help their president achieve his aims, or stand with Republicans.
Biden is at the threshold of doing something transformative here, not just putting the nation back on the path to recovery from this catastrophe, but (to use his awkwardly corny campaign phrase) build back better. As the first test of his plans for the nation’s future, this couldn’t be more important. Outdated and irrelevant sentiments about the days when there was comity in the Senate can’t get in the way.