If both sides were serious, a bipartisan COVID relief plan wouldn’t be that hard to imagine and it could happen fast.
President Joe Biden’s long experience in Washington is already showing why a government run by a competent practitioner is so much better than government run by a populist zealot of any stripe.
On Monday evening Biden sat down with Republican senators who have offered their own counter proposal to his $1.9 trillion COVID relief bill. The next day he joined Democratic leaders to say things that appealed to his party’s hardliners. He told them that Congress needs to go big and bold and that he won’t wait to try to make it a bipartisan bill. (Ironically, speed will be lost not by negotiating but by insisting on the lengthy budget reconciliation process to pass a bill without Republican support.)
Meanwhile, the red meat now having been thrown to liberal lions, his aides continue to talk with the centrist Republicans. It’s safe to assume that their opening offer of a $618 billion package was just that and that there’s room to get closer to Biden’s number.
If so, the way forward isn’t all that hard to figure out. Here are some ideas that have already been suggested by others along with a few of my own.
First, split off the $160 billion for direct health care and pass that tomorrow. Biden and the Republican centrists agree on the amount and money for distribution and delivery of vaccines and other public health programs is clearly needed now. But if you keep this attached to the broader bill it could be March before it is approved.
Next, Biden should just agree to the Republican proposal on direct payments because, well, they’re right. It makes no sense to give payments to families earning as much as $300,000. The GOP plan would cap it at $100,000 and reduce the payments from $1,400 to $1,000. If Biden wanted to make it even more progressive, he could insist on increasing the payments to, say, $2,000 for families making less than $50,000 and then toggle it back to $1,000 for families earning $100,000.
Third, live to fight another day on the minimum wage. I support a higher minimum wage myself, but it has nothing to do with COVID and it’s a poison pill even for moderate Republicans. The Democrats can probably pass this with just their own votes at a later date, but even there they will have to compromise since Sen. Joe Manchin wants $11 an hour, instead of $15. In other words, the current proposal might be a poison pill in the larger bill even for some Democrats.
Fourth, compromise on aid to states and local governments. Frankly, I question the need for this at all. The latest budget projections in Wisconsin predict a balance of $1.8 billion by June 2023. And the City of Madison was able to balance its budget by dipping deep into its rainy day fund. But the city took $8 million out of a still healthy balance of over $50 million. And, by the way, those two facts about the Wisconsin and Madison budgets belie the Republican claim that state and local governments, writ large, haven’t been responsible. Maybe some haven’t across the country, but both Madison and Wisconsin have socked money away for just this kind of storm.
The claim from the Democrats is that this is needed to keep first responders, like firefighters and police officers, on the line. But I’m not aware of a lot cities laying them off in large numbers. And, of course, fire and police are local responsibilities, not state functions.
So, I would focus the aid just on municipalities and, to quell Republican concerns for fiscal management (ironic, by the way, since they voted for the Trump tax cuts that sent their own federal budget into deeper red ink), you could employ a version of Wisconsin’s Expenditure Restraint Program. Under a program like that, local governments could only get the federal money if they promised to keep their spending below some prescribed limit in 2022.
To summarize, here’s what a sensible moderate COVID package might look like:
- About $160 billion in public health money passed on a bipartisan, if not unanimous, vote and signed by Biden by the day after tomorrow.
- Checks going out to families earning less than $100,000 soon after that with maybe even higher amounts going out to those most in need.
- A phased-in higher minimum wage passed by Democrats in an unrelated bill a few months from now.
- Aid focussed on local governments, not states, and tied to expenditure restraint, which would also restrain local tax rates, next year.
What stands in the way of this? People who aren’t moderates. Hard line Republicans won’t want to help Biden make good on his pledge of unity, while zealous Democrats don’t want Republicans to share in any of the credit for doing the right thing.
And this just hurts average Americans. Stubborn Democrats who insist on the big package can only get it through the budget reconciliation process, which will take weeks. Splitting things up into pieces that can pass with bipartisan support would get vital public health assistance and checks into bank accounts very soon.
If Biden can use his political skills, developed over five decades in Washington, to pull off a bipartisan compromise he would be doing something the value of which far exceeds the sum of its parts: he would be laying a strong foundation for rebuilding an American political center.
A postscript: Coming up with an overall price tag for this prescription is difficult, in part because it wouldn’t be one massive package, but a series of bills each the product of negotiation. Suffice it to say, it would be significantly smaller than $1.9 trillion, but probably a good deal bigger than $618 billion. But to those who say that even almost $2 trillion isn’t enough, consider these facts. Household income actually rose last month, the personal savings rate is the highest it has been since 1975 and the feds have already spent some $3.5 trillion on COVID relief efforts since last spring. Predictions for growth in the second half are bullish and there is a real concern about inflation from an overheated economy.
2 thoughts on “A Moderate Way Forward on COVID”
I agree with you except for the part about aid to state and local governments. Just because Wisconsin is projected to have a budget surplus does not mean that is the case in all states.
States (and municipalities) vary in their reliance on individual vs corporate income taxes, property taxes, sales taxes, etc. Which economic sectors (e.g. manufacturing, ag, tech, tourism, etc.) generate those taxes is also important. Given these variables, a pandemic is likely to impact each state’s (or municipality’s) revenues differently. Given that we’re facing a (hopefully) once in a lifetime pandemic, a short-term budget deficit is not necessarily indicative of bad management.