The Senate passed by a party-line vote on March 6th its version of the bloated stimulus bill pushed by President Biden. The Democrats used the procedural vehicle of a budget reconciliation bill, requiring only a majority vote in the Senate, to get around a Senate filibuster. While supposedly intended to provide more COVID-19 relief to Americans and entitled “The American Rescue Plan,” the Democrats’ $1.9 trillion Christmas tree spending bill is way wide of the mark. The Senate version is slightly less bloated than the bill originally passed by the House of Representatives, but it is still strewn with pork, bailouts to fiscally irresponsible blue states, and giveaways to the teachers’ unions. The Senate’s version will have to clear the House in another vote. While there may be some jockeying back and forth between the House and Senate on the bill’s way to the finish line, it is virtually certain to pass both Democrat-controlled chambers very shortly and proceed to President Biden’s desk for signing. Biden is already boasting that “we’ve taken one more giant step forward in delivering on that promise, that help is on the way.” He can’t wait for a signing celebration to crow some more.
The Senate bill may meet some initial resistance from House progressives already upset by the removal of the job-killing increase of the federal nationwide minimum wage to $15 per hour included in the House version. The minimum wage provision fell by the wayside after the Senate parliamentarian ruled that raising the minimum wage did not belong under the strict budgetary rules governing a reconciliation bill. House progressives are also unhappy with the cuts made by the Senate to supplemental unemployment benefits from $400 to $300 weekly, to be paid until September 6, as well as the reduction in the number of Americans eligible for receiving a direct payment of up to $1400. These concessions in the Senate version were granted to Senate Democrat moderates such as Senator Joe Manchin of West Virginia as the price for these moderates’ support.
However, the wider policy disagreements within the Democratic Party between its progressive left base and the centrists are highly unlikely to get in the way of passing this wasteful stimulus bill. “Despite the fact that we believe any weakening of the House provisions were bad policy and bad politics, the reality is that the final amendments were relatively minor concessions,” said Representative Pramila Jayapal of Washington, the chairwoman of the Progressive Caucus.
With or without the slight modifications that the Senate made, the bill contains many ornaments that have nothing to do with coronavirus relief. “Senate Democrats just managed to pass their bloated spending bill disguised as ‘COVID relief,’” South Dakota Senator John Thune, the Senate Republican Whip, tweeted after the bill was passed in the Senate. “This is the first COVID bill to be entirely partisan because it isn’t designed to help end the pandemic—it’s a blatant attempt from Dems to jam through a partisan wish list.”
For example, the bipartisan CARES Act, passed last March during the Trump administration, provided aid to the states but restricted it to funding expenses “directly related” to COVID-19. Not so with the Democrats’ current bill. State, local, and tribal governments will receive $350 billion for costs incurred up until the end of 2024, which they can use to replace lost revenue. That is a much looser spending standard than the CARES Act imposed.
The blue state and local governments that have shut down their economies for far too long with arbitrary lockdown mandates on their residents and businesses are responsible for their own drastic drops in tax revenues. Nevertheless, they will get an undeserved bailout for their stupidity. To put this in perspective, $75 billion is allotted for vaccinations, testing, and other pandemic medical supplies – 21.4 percent of the unwarranted largesse going to state, local and tribal governments. The bill only provides $7.25 billion for the highly successful Paycheck Protection Program for businesses directly impacted by the pandemic shutdowns – 2 percent of what the state, local and tribal governments will receive.
The U.S. economy is growing without the need for so much more stimulus on top of the trillions of dollars of COVID-19 relief passed last year. Perversely, the states that have high unemployment because of their lockdown policies will be rewarded with more federal financial aid under the bill’s allocation formula, which is based on states’ relative unemployment rather than population. Thus, red state Florida, which has seen lower unemployment because it opened for business earlier than a blue state like New York with stricter lockdown mandates, will be getting the short end of the stick. Florida has a larger population than New York, according to U.S. Census Bureau 2020 estimates. But New York will receive $6 billion more in state aid than Florida due to New York’s higher unemployment resulting from its irresponsible lockdown mandates.
Billions of dollars from previous COVID-19 relief legislation remain unspent. The money lying around includes at least $50 billion of federal COVID education relief funds previously dispensed to schools. Yet $130 billion more in funding will be lavished on primary and secondary schools, and $40 billion on colleges and universities. Much of the money will likely be spent in future years through fiscal year 2028, well after the coronavirus pandemic is in the rearview mirror. The schools are not required to reopen for in-person learning as a condition for receiving the money. This is not emergency funding for schools desperate to reopen. It is a payoff to the teachers’ unions, the Democrats’ best friends.
There are also huge transfer payments included in the so-called “American Rescue Plan” that go far beyond COVID-19 relief. They include a grab bag of goodies such as broadened eligibility under Obamacare and expansion of the food stamps program. A better title for the bill would be the Progressive Wealth Redistribution Plan.
House Majority Leader Steny Hoyer said in a statement released after the Senate’s passage of the bill that “Democrats are delivering on our promise to take action to defeat this virus and provide the assistance the American people need until our economy can reopen safely and fully.” He said that the Democrats succeeded on their own after “months of Republican inaction.” These Democrat talking points are a bunch of nonsense. Trillions of dollars of targeted relief were quickly approved last year by bipartisan votes when the need for relief was the greatest. This happened during a Republican administration and with a Senate under Republican control.
Republicans were willing to negotiate a real COVID-19 relief bill this time as well. “Regrettably, there was no interest from Democratic leadership in negotiating a targeted, bipartisan relief package that meets the challenges at hand,” said Maine’s Republican Senator Susan Collins. “Our country is at its best when we come together as Americans to overcome the challenges we face.”
Instead, the Democrats are ramming through their inflationary wish list, which has less to do with direct coronavirus relief than satisfying their political allies and greedy special interest constituencies such as the teachers’ unions. Future generations will have to pay the piper.