(ATF) President-elect Joe Biden will propose a third massive relief package of about $1.9 trillion when he takes office next week, amid concern that the US economy’s rebound has been deflated by the coronavirus resurgence.
Part of Biden’s plan is to massively ramp up vaccinations, to see if the country can get a Covid-19 vaccine to 100 million Americans in the President’s first 100 days in office.
The Democrats control both houses of Congress by a slim margin, but there is concern on whether Senate hearings on whether to impeach his predecessor Donald Trump will limit its capacity to pass much of Biden’s agenda, even though Chuck Schumer will become the Senate leader from next week.
The President-elect’s American Rescue Plan includes a host of measures aimed at revitalizing the world’s largest economy.
Biden, 78, aims to raise the federal minimum wage to $15 an hour, help struggling state and local governments, safely reopen schools, roll out the vaccination campaign and raise the size of stimulus checks Congress approved last month.
“The return on these investment in jobs, racial equity will prevent long-term economic damage, and the benefits will far surpass the cost,” Biden said during a speech from his home town of Wilmington in Delaware. “In this moment of crisis… we cannot afford inaction.”
House Speaker Nancy Pelosi and Schumer have embraced the plan. And analysts have said it could lay the foundation for a surge in jobs and spending that economists say it need to avoid long-term damage from the pandemic recession.
But they said even if the package ends up being downsized, spending big on a vaccine rollout and testing, while helping state and local governments on the frontlines of those efforts could help bring a swifter end to the country’s healthcare crisis, which remains at the root of the economic crisis.
Jobless numbers highest since August
The latest economic data shows Covid’s winter resurgence sent the recovering labour market into reverse last month as employers shed 140,000 jobs, especially low-income positions in restaurants, bars and other service industries.
On Thursday, the government reported a spike in new jobless claims in the first week of 2021 to nearly a million, its highest level since August.
Biden said: “We’ll use taxpayers’ dollars to rebuild America. We’ll buy American products, supporting millions of American manufacturing jobs, enhancing our competitive strength in an increasingly competitive world.”
His stimulus proposal would build on two huge relief packages Congress approved in 2020, which increased and extended unemployment benefits that have helped tens of millions of people pay their bills after losing their jobs during the pandemic.
It also calls for devising a way to maintain those programs if unemployment stays high, and continues expanded government food assistance as the country struggles with some of its highest hunger levels in modern times.
But controversy could await the plan’s provision of $350 billion in funding to state and local governments, which Republican lawmakers blocked throughout last year.
Also potentially challenging is the president-elect’s move to increase the size of stimulus checks Americans received in the December package to $2,000, which would fulfill a campaign promise.
With the slimmest of majorities in an evenly split Senate, the Democrats will have to woo some Republicans if anyone in their party breaks ranks. One Democratic senator has already expressed hesitation over increasing the payments, but earlier this week Republican Senator Marco Rubio told Biden he would back the additional aid.
The proposal also calls for $160 billion to fight Covid-19, including the national vaccination campaign, and $170 billion for schools, with the goal of getting most institutions with students in kindergarten through eighth grade open in the first 100 days of his administration.
‘Even a smaller amount would help’
Some analysts have said even if Congress pares Biden’s plan down to the $900 billion to match the measure approved last month, it will help.
Earlier on Thursday Fed Chair Jerome Powell noted that early and forceful state spending had helped save the economy from a much more dire fate.
“Now is not the time to be talking about exit,” Powell said, referring to the Fed’s super-easy monetary policy that includes a massive bond-buying program and interest rates expected to stay near zero for years.
At present, 10.7 million are out of work and the unemployment rate is 6.7%, nearly twice the pre-pandemic level.
Other aspects of Biden’s plan include expanding tax credits aimed at fighting poverty and helping working parents afford childcare, plus extending a moratorium on evictions.
The plan offers flexible credits and grants for the small businesses that are major employers but have struggled to survive as states imposed restrictions to stop the virus.
Later, officials said Biden intends to present a second “recovery” plan to lawmakers soon after his inauguration aimed at spurring hiring and fighting climate change.
With reporting by Reuters, AFP