Biden Seeks to Juice Economy as Congress Spars Over Stimulus
U.S. President Joe Biden speaks on his administration’s response to the economic crisis in the State Dining Room of the White House. (Photographer: Ken Cedeno/CNP/Bloomberg)

Biden Seeks to Juice Economy as Congress Spars Over Stimulus

President Joe Biden is discovering the limits of his power to boost the world’s largest economy on his own, as congressional opposition to his sweeping stimulus plan hardened soon after he was inaugurated.

While publicly urging Congress to swiftly pass his $1.9 trillion proposal -- warning of rising unemployment, hunger and homelessness if lawmakers don’t act -- Biden issued more than a dozen executive actions in his first three days in office, some aimed at propping up the economy and containing the coronavirus to allow its reopening.

While moderate Republicans including Susan Collins of Maine see little need for a big new spending bill after last month’s dose, Biden’s making the case that the crisis is deepening, not fading, and urgent action is needed. But top Biden aides acknowledge that unilateral action can only accomplish so much.

“If we don’t act now, we will be in a much worse place, and we will find ourselves needing to do much more to dig out of a much deeper hole,” Biden’s top economic adviser, Brian Deese, said of the stimulus plan at a press briefing on Friday.

Biden Seeks to Juice Economy as Congress Spars Over Stimulus

Record Covid-19 death tolls and renewed lockdowns have battered the economy this winter. A government report for December on Friday is expected to show the worst back-to-back monthly declines in personal spending since the dark days of last spring. And while U.S. stocks hit record highs the past week, some of that optimism has been based on assumptions of new stimulus getting passed.

Biden’s executive actions can at least signal his intentions, but he’ll need cooperation from Congress to validate financial markets’ confidence and make a real difference for the economy and the 11 million unemployed Americans. The legislature’s sign-off is required for the scale of spending needed to notably boost growth.

Biden signed two orders on Friday that expand food stamp benefits for low-income families, direct the Treasury Department to ensure Americans eligible for stimulus checks received them and reinstate protections and collective bargaining rights for federal workers. Next week, he’s expected to sign additional actions urging federal agencies to buy goods and services from U.S. companies, directing regulatory action to fight climate change and strengthening Medicaid.

Biden Seeks to Juice Economy as Congress Spars Over Stimulus

“It is perfectly reasonable and necessary to start with a strong statement of intent from the administration, and it sounds like that is how they will use the executive orders -- as ammunition in the battles to come,” said Thea Lee, president of the Economic Policy Institute, a left-leaning thinktank.

GOP Skepticism

“But when we talk about the $1.9 trillion Covid relief package or the big investments in infrastructure, climate change or the ‘care economy,’ those are things that will need the finance and power of the U.S. Congress to succeed,” she said.

Biden’s plan has so far sparked little enthusiasm from congressional Republicans. They have complained his first legislative proposal is too expensive, not targeted enough or is too much of a laundry list of liberal goals, including a minimum wage increase.

Not a single Republican has indicated support for Biden’s stimulus plan as presented, with Senators Mitt Romney, Chuck Grassley and Collins questioning the urgency since the government is still enacting a $900 billion stimulus from December.

“It’s hard for me to see, when we just passed $900 billion of assistance, why we would have a package that big,” Collins said this week about Biden’s proposal. “I’m not seeing it right now, but again, I’m happy to listen.”

Piecemeal Approach?

Parts of the plan could get traction, however. Republican Senator Todd Young of Indiana called the total package a “non-starter, but it’s something that we will scrutinize and hopefully, find some common ground on.”

He said he might support a proposal to add funding for coronavirus vaccinations, as an example, and said he and Vice President Kamala Harris had spoken about finding a compromise.

Harris will continue to call lawmakers in order to build support for the White House’s plan, spokeswoman Symone Sanders said Saturday.

Biden Seeks to Juice Economy as Congress Spars Over Stimulus

“She holds a number of bipartisan relationships.” Sanders told reporters at the White House. “I think the president’s relationships, coupled with the vice president’s relationships, will prove extremely, extremely valuable as they go about the business of truly building bipartisan support for these packages.”

The Biden team has said it would prefer to pass the relief package with Republican votes. Deese is scheduled to speak with a bipartisan group of senators on Sunday at 3 p.m. Biden is making his own calls to lawmakers, though the White House has declined to specify with whom he’s speaking.

During her confirmation hearing on Tuesday, Treasury Secretary-designate Janet Yellen defended Biden’s proposal against Republicans who raised concerns about the deficit -- an issue that practically evaporated in Washington while Donald Trump was president.

Yellen’s Case

She said Congress needs to “act big” to revive the economy.

“Right now, short term, I feel that we can afford what it takes to get the economy back on its feet, to get us through the pandemic,” Yellen told the Senate Finance Committee, highlighting that interest rates are historically low and that debt-servicing payments as a share of the economy are lower today than before the 2008 financial crisis.

She said doing too little to sustain the economy now could lead to “scarring.”

Presidents Barack Obama and Trump both made liberal use of executive orders and other actions to make policy, particularly when the opposing party controlled a chamber of Congress.

“Executive orders are the trend. It began almost 30 years ago, and they are becoming more and more the practice because Congress has been unable and unwilling to address these challenges through statute,” said former Democratic Senate Majority Leader Tom Daschle.

Daschle said Biden has no choice but to use the executive-authority tools: “He has an ambitious agenda.”

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