President-elect Joe Biden has begun unveiling an ambitious legislative agenda — and though he has signaled hope for bipartisan support, multiple Senate Republicans are already dismissing his newly proposed coronavirus relief plan out of hand.
Biden on Thursday unveiled a $1.9 trillion proposal that will include a $1,400 stimulus check; billions in funding for vaccine distribution and testing; and additional aid to state and local governments. It’s intended to address the massive economic fallout the country is continuing to experience from the coronavirus pandemic, and to supplement the federal aid that was distributed via the $2 trillion CARES Act and a second $900 billion measure last year.
“It’s not just that smart fiscal investments, including deficit spending, are more urgent than ever,” Biden said in a speech promoting the measure, dubbed the “American Rescue Plan,” last week. “It’s that the return on these investments — in jobs, in racial equity — will prevent long-term economic damage and the benefits will far surpass the costs.”
In those same remarks, Biden emphasized that 18 million people are currently receiving unemployment insurance, and 400,000 small businesses have permanently closed — both indications that millions of Americans still need additional support.
Several Democrats responded to the plan by urging Biden to consider even more expansive measures, including provisions like recurring stimulus checks and baby bonds, which would establish a federally funded savings account for every newborn. Republicans, however, are beginning to line up against the proposal — echoing concerns they’ve long voiced about how such spending could add to the national debt.
“Blasting out another $2 trillion in borrowed or printed money — when the ink on December’s $1 trillion aid bill is barely dry and much of the money is not yet spent — would be a colossal waste and economically harmful,” Sen. Patrick Toomey (R-PA) said in a statement.
Senate Majority Leader Mitch McConnell has yet to comment on the proposal, though he’s been reluctant to approve larger relief bills in the past, and cited fracturing within his conference on the issue as the reason why.
The pushback that’s emerged so far suggests that Republican opposition could potentially stymie the approval of this bill via regular order: Since most legislation requires 60 votes to pass in the Senate, Democrats would need 10 Republicans to back the measure, given the chamber’s 50-50 split. If they don’t pick up that support, Democrats may well have to consider other procedural options that would allow them to circumvent the 60-vote rule, including budget reconciliation.
Republicans are dialing up their fiscal conservatism, again
Like Toomey, other Republican lawmakers — including Sen. Ted Cruz (R-TX) — have signaled that they’re interested in dialing up their focus on fiscal conservatism (essentially, limiting additions to the national debt) now that Democrats have won back the White House.
Many in the party appear to be doing so even though such actions are contradictory to stances they’ve taken during the Trump administration. Trump’s 2017 tax cuts have been estimated to add between $1 trillion and $2 trillion to the national debt, for instance, according to the Tax Policy Center.
Republicans’ renewed focus on the debt was increasingly apparent last year, as GOP senators sought to limit the scope of the second stimulus package: Over and over, Republican lawmakers pushed for legislation that was under $1 trillion.
And as Bloomberg reported at the time, that opposition led to speculation regarding whether such positions meant Republicans would again set themselves up as the “party of no” in a Biden presidency. Early indications seem to suggest that the GOP will indeed embrace this strategy, with which they attempted to block many of the Obama administration’s legislative efforts.
“We cannot simply throw massive spending at this with no accountability to the current and future American taxpayer,” Sen. Rick Scott (R-FL) told the Washington Post recently regarding Biden’s coronavirus relief package.
While there is some debate among experts as to how much coronavirus aid is needed, as Vox’s Dylan Matthews explained last spring, concerns about the debt are difficult to argue for in the current economic moment due to a couple factors, including lower interest rates:
To be sure, there are times when worrying about the debt makes sense. Countries like the US that print their own currency can in principle always pay their debts, but there’s a risk that doing so would involve printing so much money that hyperinflation ensues. If that were a real danger, the US should be thinking twice about massively expanding the deficit.
But inflation, let alone hyperinflation, is not a real danger at this moment. According to the Fed’s preferred measure, inflation was well below its 2 percent target even before coronavirus hit.
Some Republicans could sign on to more relief — but it’s unclear if Democrats can get to 10
A segment of the Republican conference could be willing to work with Biden on more relief, though it’s likely there will be a push to narrow the measure some in exchange for their support. Biden’s opening bid calls for raising the minimum hourly wage to $15 — a provision that has garnered significant Republican pushback in the past, for example. It is possible initiatives like these could be set aside for future legislation in order to win GOP backing for the broader package.
“There’s many things in this package I can support. Some of which I can’t. We’re not going to bail out a bunch of poorly run blue states,” Sen. Lindsey Graham (R-SC) said on Friday.
Previously, Sens. Mitt Romney (R-UT), Susan Collins (R-ME), Lisa Murkowski (R-AK) and Bill Cassidy (R-LA) were part of a bipartisan group that helped put together a compromise aid bill last year. It included some of the provisions Biden has called for, and they’re among those who may be more open to considering additional support this time around as well. Sens. Marco Rubio (R-FL) and Josh Hawley (R-MO) have also backed a bill to increase the recent round of $600 stimulus checks to $2,000 — another prominent part of Biden’s plan.
Whether Democrats and Republicans can reach a compromise on legislation, and get the votes needed to hit the 60-person threshold that’s needed to pass it, however, is an open question. If they can’t, Democrats could opt to advance parts of this legislation through the process known as budget reconciliation.
Unlike most bills, budget resolutions are able to pass the Senate with a simple majority of votes — though there are limitations to what they could include. By taking this route, Democrats could pass a bill with the 50 members of their caucus and a tiebreaker from Vice President-elect Kamala Harris.
“Not everything can pass through budget reconciliation,” Vox’s Dylan Matthews has written. “It likely rules out measures like a minimum wage increase, or DC and Puerto Rico statehood, or updates to the Voting Rights Act, or gerrymandering reform.”
As Matthews notes, however, any provisions that are related to spending and taxes that would expire within 10 years, are deficit-neutral, and don’t make changes to Social Security could all be eligible. That means certain aspects of the stimulus proposal — like another round of checks, as well as an extension to paid medical leave — could potentially pass via budget reconciliation if that’s the only option available to Democrats.