Democratic Staff Prep Two Options for Package: Stimulus Update
(Bloomberg) -- Democratic congressional staff are preparing options for two legislative routes for President Joe Biden’s Covid-19 relief plan -- one that includes Republican support and one that goes without. The White House is arguing against a “wait and see” approach on aid, saying sustained fiscal support is vital for the recovery.
Biden has so far failed to win Republican backing for his overall $1.9 trillion stimulus proposal, spurring congressional Democratic leaders to prepare to move ahead with just their caucus. That involves a complicated legislative process known as reconciliation, which likely would take weeks to complete.
Bipartisan groups, including a 16-member Senate coalition and the House Problem Solvers Caucus, continue to work on a potential counterproposal.
Democratic Staff Pursue Dual-Track Approach on Aid
Democratic aides on the House Ways and Means and Senate Finance Committees are preparing dual-track Covid-19 relief plans. One option presumes moving ahead with bipartisan votes and the other relies just on Democrats, amid continuing discussions between the Biden administration and lawmakers on the president’s $1.9 trillion proposal.
“The preparation in the tax-writing committees is getting the core policies together that we’d like to see in the first bill,” Beth Bell, the staff director for the Ways and Means tax policy subcommittee, said Wednesday at an American Bar Association event. The committees are “making sure we have those policies set for a reconciliation path and a not reconciliation path,” she said.
Reconciliation refers to a fast-track budget procedure that would allow Democrats to move the legislation without Republican votes, but they would be more limited in the policies that could be included in the final legislation. Many Democrats say they want to pursue a bipartisan bill, but the two-bill preparation means they could easily switch gears to pass a Democrats-only bill by mid-March -- when extended and expanded unemployment benefits expire.
“Members think it’s vital that something does get done, so that might lead to reconciliation,” Sarah Schaefer, a senior tax policy adviser for the Senate Finance Committee, said at the event. -- Laura Davison
House Plans Vote to Start Fast-Tracking Democratic Plan (2:31 p.m.)
House Budget Chairman John Yarmuth said in an interview that the House intends to vote next week on a fiscal 2021 budget resolution, the first step in a process that could allow parts of Biden’s $1.9 trillion stimulus proposal to pass Congress without Republican support.
Yarmuth said the plan at this point is to go directly to the floor with the budget, bypassing any lengthy markup procedure with his panel. The budget resolution will contain instructions to other committees to assemble the stimulus measure.
A bill complying with the instructions in the budget resolution and adhering to other Senate rules can pass the Senate with just 50 Democratic votes. Some elements of Biden’s Covid-19 plan, such as direct stimulus checks and extended unemployment insurance, qualify for the process while others, such as vaccine funding and a minimum wage increase, may not.
The House is initiating the multi-step budget process even as attempts to forge a bipartisan stimulus bill continue. Some House moderates in the Problem Solvers Caucus are urging Democratic leaders to give bipartisan efforts more time to bear fruit before using the budget tool. -- Erik Wasson
Biden to Meet With Economy Team Amid Delay Concerns (1:59 p.m.)
President Joe Biden will meet with Treasury Secretary Janet Yellen and other members of his economic team on Friday as he seeks to speed his $1.9 trillion Covid-19 relief plan through Congress.
The talks will address “the impact of delay” and examine the impact of not moving forward on relief package, White House Press Secretary Jen Psaki said at a press conference Wednesday.
White House economic adviser Brian Deese has been engaging in one-on-one meetings with lawmakers as the administration tries to build support for its plan, Psaki said. Chief of Staff Ron Klain and senior adviser Anita Dunn have also engaged with members of Congress, she said. Officials from the National Economic Council, Treasury and Domestic Policy Council have been working with staff from the Senate Banking and Finance Committees, along with House Ways and Means and Financial Services panels, she also said. -- Jennifer Epstein
Stimulus Checks Should Be More Targeted, Study Says (11:28 a.m.)
Wealthier families are more likely to save their stimulus checks, limiting the economic boost of the direct payments that policy makers have so far championed, according to research from Opportunity Insights, a Harvard University based policy research group.
Households with income of $78,000 or more only spent $45 of the $600 payments that Congress approved last month, the researchers estimated. Biden’s request for additional checks of $1,400 per person implies federal outlays of some $200 billion to those households -- only $15 billion of which would be deployed in spending, the study concluded.
The data aligns with other research from the U.S. Census Bureau, which indicated that higher-income households were more likely to save the payments.
Republicans and some Democrats, including Senator Joe Manchin of West Virginia, have criticized the high phase-out levels for the stimulus checks, saying they should be set lower, targeting help more toward lower-income households.
People earning as much as $75,000 as an individual or $150,000 as a couple qualified for the full $600 December payments. The amounts phase out from those levels up to $87,000 and $174,000 respectively.
White House economist Jared Bernstein said Wednesday that checks are “better targeted than I think many folks realize.” He argued that “it’s not just folks at the bottom who need the money.” Many in the middle class “face issues around rent and mortgage payments,” with compensation reduced even if they haven’t lost their jobs, he said.
One potential issue is that changing the eligibility requirements and phase outs could mean that it takes longer for the Internal Revenue Service to process a new round of payments. -- Laura Davison
Biden Adviser Rejects ‘Wait and See’ Approach on Recovery (10:08 a.m.)
Jared Bernstein, a member of the White House Council of Economic Advisers, rejected the idea of waiting for implementation of a previous aid package before enacting the next one.
“I’ve heard many people say, ‘Let’s see how the last plan does before we do the next plan,’” Bernstein said at the Bloomberg Year Ahead conference Wednesday. “That wait-and-see has worked very poorly for us before and it’s why we keep experiencing these cyclical reactions to the virus. Things get better, they get worse.”
Moderate Republicans have said it’s too soon to consider a $1.9 trillion package given the $900 billion bill that was enacted just last month.
White House Press Secretary Jen Psaki said Tuesday, “The problem with focusing on the $900 billion package as the answer to our current problem now is that it was catching up for what had not been done for the prior six months. So what we’re really focused on now is what is needed for immediately, now, of course, but also in the months ahead.”
Some benefits from the March 2020 Cares Act began running out at the end of July, and it took until December to negotiate the next relief bill. -- Julia Fanzeres
House Moderate Argues Against Reconciliation Route (9:07 a.m.)
Representative Jared Golden, a Democratic member of the centrist, bipartisan Problem Solvers group, argued against pursuing a Democrat-only stimulus bill.
Golden and fellow members of the 56-strong Problem Solvers spoke Tuesday with White House economic adviser Brian Deese on relief plans, and the Maine Democrat said he favored pursuing a bipartisan approach.
Golden’s stance is a warning to Democratic leaders about the potential challenge of holding the caucus together should they opt to forgo Republican support. The Senate is split 50-50, while Speaker Nancy Pelosi can only afford to lose four Democrats if all GOP members are opposed. -- Erik Wasson
Hoyer Warns of Weekend Work Before Mid-March Stimulus Deadline (7:56 a.m.)
House Majority Leader Steny Hoyer, a Maryland Democrat, said representatives will need to be prepared for weekend work to speed a Covid-19 aid package through the chamber.
“With expanded emergency unemployment insurance benefits scheduled to expire in March, the continued rise in Covid-19 cases and in job losses, and President Biden’s pledge to deploy 150 million vaccine doses in his first 100 days, we will need to move swiftly on additional Covid-19 relief legislation,” Hoyer wrote in a letter to colleagues late Tuesday.
House committees begin work this week, with the full chamber in session next week and potentially into the weekend, Hoyer said. Committees will be working the following two weeks, with the full House in session again the week of Feb. 22.
The House will now be in session in the first two weeks of March, ahead of the March 14 expiration of the expanded and extended unemployment benefits included in December’s $900 billion aid package.
House and Senate budget committees are preparing to move on fiscal 2021 budget resolutions, the first step toward a so-called reconciliation bill, which allows the Senate to proceed on a simple-majority vote basis -- avoiding the need for 60 votes to cut off the filibuster. It makes all the difference given the chamber’s partisan 50-50 split.
The catch, however, is that not all of Biden’s $1.9 trillion plan is likely to qualify for that route. The $160 billion for Covid-19 vaccines and testing would likely be out because discretionary spending is excluded from the process, while the proposed minimum-wage hike may also be disqualified for having insufficient budget impact.
Stimulus checks and jobless benefits, two major components, would be in. Aid for state and local governments would face a high hurdle. -- Billy House, Erik Wasson
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