With President Joe Biden’s massive $1.9 trillion coronavirus aid package facing its first big legislative test this week in the House, critics hope to turn it back or see it slimmed down by saying it’s too expensive and poorly targeted.
The plan is set to be taken up by the House Budget Committee Monday afternoon, then head to the House Rules Committee later in the week, where it could be changed, before going to the House floor late in the week.
The bill is Biden’s first big legislative initiative and an attempt to make good on campaign promises of more economic relief in the wake of the COVID-19 pandemic. Democrats pushed through a budget resolution earlier that will allow the aid bill to pass the Senate with only 51 votes.
At a hearing Thursday, Sen. Pat Toomey, a Pennsylvania Republican, called the bill “wasteful, poorly targeted, and largely unrelated to COVID.”
“This bill is not about COVID, not about economic recovery, and not about stimulus. It’s about enacting a longstanding Democratic policy wish list,” he said.
And the criticism is coming not only from Republicans. The Committee for a Responsible Federal Budget, a bipartisan group that fights to keep the federal budget deficit down, took aim at the plan in a statement last week, saying it contained about $300 billion in spending unrelated to the pandemic.
“Only about 1% of the entire package goes toward COVID vaccines, and 5% is truly focused on public health needs surrounding the pandemic,” said CRFB President Maya MacGuineas.
“Meanwhile, nearly half of the package will be spent on poorly targeted rebate checks and state and local government aid, including to households and governments that have experienced little or no financial loss during this crisis,” she said.
Democrats counter that the aid is needed to ensure the economy does not fall back into the slowdown originally seen in the spring of 2020 as many businesses had to shut down temporarily to slow the spread of the coronavirus.
“We are in a race against time, and aggressive, bold action is needed before our nation is permanently scarred by the human and economic costs of inaction. We have the plan and the fiscal space, we have the American people behind us, and now we have the bill to get it done,” said House Budget Chairman John Yarmuth on Friday.
Biden, during a visit to a vaccine plant in Michigan Friday, said he was open to shrinking the bill but challenged critics to find where to make the cuts.
“Let me ask them, ‘What would they have me cut? What would they have me leave out? Should we not invest $20 billion to vaccinate the nation?’” he said.
The major pieces of the plan include the direct payments to households, $1,400 per individual and eligible family member, at a cost of $413.6 billion over two years, according to the nonpartisan Congressional Budget Office. Aid to state, local, and tribal governments would cost an additional $350 billion, while enhanced and extended unemployment benefits, including a bigger federal add-on to jobless checks to bring them to $400 a week from $300, would cost $242 billion, according to CBO.
The bill would also increase the minimum wage from $7.25 an hour currently to $9.50 and eventually to $15 in 2025, a provision that faces an uncertain future in the Senate with possible procedural challenges and less support among Democrats there than in the House.
While the direct payments and bigger jobless checks have bipartisan support, other parts of the plan have drawn criticism.
A $128.6 billion fund meant to help reopen shuttered schools by making them safer for students to attend, for example, would spend out relatively slowly between 2021 and 2028, according to the CBO.
About $70.7 billion of the fund would be spent between 2021 and 2023 fiscal years, leaving the remainder, or about 45% of the fund, to be spent between 2024 and 2028 , the CBO said.
House Speaker Nancy Pelosi dismissed criticism of the fund at her weekly press conference. “I don’t place too much weight on what the Republicans say, even though it seems to be of value to you to use as a question. But the fact is that this is the money that is needed,” she said.
The CRFB’s MacGuineas took aim at an $83.6 billion provision to help out underfunded but federally guaranteed private pension plans. The money spent on the plans could extend the jobless benefits for another month, she said.
“The financial status of these funds shouldn’t be addressed in a piece of crisis legislation, and certainly not at the cost of benefits for unemployed workers. Frankly, no member of Congress should be willing to defend this,” she said.
The money for state and local governments has also drawn fire.
“On the whole, state and local governments aren’t in fiscal crisis. Preliminary 2020 state and local tax collections were up $21 billion compared to 2019,” Toomey said.
States hve been given additional time to spend money they had previously received in the first big aid bill in March 2020 but not yet spent. Still, some state treasurers say more will be needed ahead.
“Topeka has already laid off people because of Covid. If they have to go through another round, they’re really getting into the muscle, not the fat. It’ll mean fewer employees servicing the needs of the city, which then can be multiplied for other cities and other municipalities,” said Kansas Treasurer Lynn Rogers in a press call Friday hosted by a group called Invest in America Action.