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Unsanitized: The COVID-19 Report for Jan. 15, 2021

The American Rescue Plan

Joe Biden's $1.9 trillion package for public health and economic
relief from the coronavirus

 

President-elect Biden wants $1.9 trillion in COVID public health and
economic relief funds. (Matt Slocum/AP Photo)

First Response

Well we now have the Biden plan for responding to the COVID-19 crisis,
which he calls the American Rescue Plan. And we can definitely say
it's big ($1.9 trillion), ambitious, and detailed. Whether it can pass
into law, and how long the Biden administration will dither until
finding the only strategy that can succeed, is another matter.

I don't have a lot of new thoughts beyond what I said yesterday
,
so let me just lay out what's in this thing:

Public health: This is a massive effort

of $415 billion. It would create a national vaccination program with
public centers and mobile units across the country; ensure free vaccine
delivery to all Americans, including those on Medicaid; expand testing
to support safe reopening of schools and other facilities, with $170
billion specifically for school reopening and emergency relief; fund a
100,000 strong public health jobs corps (an idea first seen in the
Prospect
)
for vaccine outreach and contact tracing; expand health services to
vulnerable populations and congregate settings; invest in treatments and
other supplies; and add 14 weeks of paid sick, family, and medical
leave. That's a fully articulated program that it would be impossible
to spend too much money on, if it results in returning to a normal life
and economy faster.

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Survival checks: This would top up the $600 checks already passed in the
December relief bill to $2,000, and expand eligibility to adult
dependents, who were cut out of the December bill. More on this below.

Unemployment insurance: This would increase the federal unemployment
boost from $300 to $400, and extend benefits and COVID-related
unemployment programs through September (right now they would expire in
mid-March).

State and local aid: There's $350 billion here, which based on the
numbers I've seen is probably enough, if not more than enough, to
cover revenue shortfalls at the state and local level. There's an
additional $20 billion for public transit and $20 billion for tribal
governments, and the bill would temporary cut the state match for food
stamps (SNAP). I still think this is worded to cover "COVID-related
costs," however, and while money is fungible this might get tricky in
some cases where there's just a revenue gap.

Evictions and foreclosures: This would extend the eviction moratorium to
September (it will expire at the end of this month, though Biden can
keep the eviction moratorium going through executive action). It would
also add $30 billion in rental, water, and utility assistance, on top of
the $25 billion passed in December. Just New York City renters owe $1
billion in back rent
,
so the need here is obviously pretty large. There's also $5 billion
for emergency housing to prevent homelessness.

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Hunger: Extends the 15 percent increase in SNAP benefits through
September, adds $3 billion to the Women, Infants, and Children (WIC)
program, and partners with restaurants to feed people, helping both
small businesses and the needy at once.

Child care: The December bill had $10 billion

for child care providers to stay open. This adds another $40 billion,
and gives a tax credit to families to cover the cost of child care.

More tax credits: As mentioned yesterday, the bill adopts the
Brown-Bennet expansion of the Child Tax Credit, to $3,600/year for
children under 6, or $3,000/year for children between 6 and 17. It's
only a one-year expansion, as is an expansion of the Earned Income Tax
Credit and money for the welfare block grant. There are much better ways
to deliver these benefits-like with a flat check-than through a tax
credit, which families won't see until 2022
, and which
denies the lowest-income people in the economy any benefits.

Health coverage: Subsidizing COBRA would continue through September, and
premium support would increase. There's also money for veterans'
health and substance abuse programs.

Small business: There are $15 billion in grants to the hardest-hit small
businesses, and a $35 billion infusion into state, local, and non-profit
small business financing programs, which would go into low-interest
loans.

Cybersecurity: There's a pot of about $10 billion for cybesecurity,
obviously fallout from the Solar Winds hack.

Minimum wage: And oh by the way, it raises the minimum wage

to $15/hour.

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I wanted to post everything in the bill so there's a sense of the
comprehensive effort here. It's a policy smorgasbord, and nearly all
of it is important and well-rendered and would help a great many people.
I'd definitely do some things differently-the Child Tax Credit comes
to mind-but in general this is solid work.

The problem is that there's no way a single Republican would ever sign
onto this. It nears the scope of the Heroes Act (if you add the $1.9
trillion to the $900 billion passed in December, it's just about the
size of the Heroes Act), which was rejected out of hand by Republicans
for six months. And yet the Biden team wants this to go through regular
order, meaning it would require 10 Republican Senators to sign on.

That's not going to happen. It doesn't have to happen; with the
exception of the minimum wage, everything in this bill can be passed
through budget reconciliation on a majority vote. I'm not certain
every Democratic Senator would vote for this, however. And by adding
Brown-Bennet, you invite all of those Senators, any one of whom can
derail the bill, to add their own pet projects. It sets up to be messy
and extended. And unemployment benefits expire in March, and the vaccine
and testing money is needed like today.

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My sources tell me that Biden's team is well aware of the urgency. But
I fear they're setting up a bad process that denies quick,
trust-building action.

To that point, a messaging problem has emerged. Since Donald Trump
intervened with the December bill and said the direct payments were too
low, the concept on offer has always been to increase those $600 checks
to $2,000, a difference of $1,400. That's what the bill that AOC wrote
up an hour after Trump's video said. That's what the CASH Act,
passed in the House after Trump signed the December bill, said. That's
what Senators like Bernie Sanders fought for in the last week of 2020.
It was always topping up to $2,000. That's reflected here.

The allure of round numbers led to the Georgia Senators and Biden
himself wrongly saying, approximately "If you elect them, you'll get
a $2,000 check." But you won't, you'll get $1,400 on top of a
prior $600. So the left has jumped all over this to say that Biden lied
or is shortchanging people or whatever. He really isn't; the deal was
always a top-up. But it really wouldn't be that hard to convert this
to a $2,000 check. It would cost roughly $200 billion to make that
change, and I can't see anyone willing to accept $1.9 trillion balking
at $2.1 trillion. (I also think any normal person not on Twitter will be
thrilled to get $1,400 and won't hold a grievance.)

But this is all the more reason to split out what you can get Republican
votes for as a standalone and get an early victory. The base of the
party lacks trust in Biden, and some are ready to pounce at any slight.
Fulfilling this one high-profile promise-which practically every
Senator says can get 60 votes-would put proof to the ambition
expressed in this bill. And it would get that done quickly, instead of
relying a lingering, lumbering package that raises doubts in the public
mind about Biden's seriousness.

So to sum up, I like the bill, I question the strategy, and I think
those carping about the size of one element of the package should pay
more attention to the process for getting any of it passed.

We Can't Do This Without You

Number of Vaccines Given

11.9 million
,
up from 10.8 million on Thursday. Up to 39 percent of supply being
administered. Third in the world in doses per capita, behind Israel and
the UK. We've been at or near the 1 million shots/day threshold all
week. That's been Biden's benchmark. He needs to get more ambitious;
with the variant spreading, we need twice as much to stay ahead.

Today I Learned

* Get a better mask

for going to the grocery store, or wear two. The virus mutation is very
contagious. (Vox)

* Schools have to be increasingly careful

with the new variant as well. (New York Times)

* A nuanced look

at the vaccine rollout from Jonathan Cohn. (HuffPost)

* We're almost certainly going to see immunity passports

before long, and Israel is already rolling them out. (CNBC)

* I would say that business travel is not coming back
, not
to the same degree. (Financial Times)

* Payment habits and the slow death of cash

is also mostly here to stay. (American Banker)

* Cargill undermined health and safety protocols

for meatpackers, the union says. (Bloomberg)

* Retail rents in New York City are circling the drain
.
(Wolf Street)

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