President Biden seems determined to pass his “American Rescue Plan” without any Republican votes. It’s $1.9 trillion or bust, he says, on top of the unprecedented $3 trillion coronavirus relief bill from March and another $900 billion in December, some of which still hasn’t been spent. In fact, Republicans don’t have the clout to stop the bill. But the plan is also drawing some sharp criticism from non‐Republican sources. Two big articles in the Washington Post Thursday and Friday urged that the plan be pared back to presumably necessary measures, with other components to be considered through the normal non‐emergency congressional process of hearings and floor debate.
On Friday Lawrence Summers, secretary of the Treasury for President Clinton and director of President Obama’s National Economic Council, weighed in. Summers said that “safety‐net measures for those suffering and investments in vaccination and testing” need to be implemented immediately. But he warned that the total size of the package “is at least three times the size of the output shortfall” and thus six times the relative size of Obama’s 2009 stimulus bill — which itself was dubbed “Porkulus.” He warned that the massive injection of borrowed money into the economy might well spur inflation and would surely crowd out further Democratic wish‐list programs. Questioning the administration’s first big bill is unpopular with many Democrats, and Politico reported that the article was “being circulated on the left like samizdat.”
Meanwhile, longtime Post reporter and columnist Steven Pearlstein, who like Summers is no Milton Friedman devotee, bemoaned that Democratic “message discipline” was covering up “exaggeration, misconception and faulty economic logic.” He too agreed that “the funds for coronavirus testing and vaccination, extending unemployment benefits and the eviction ban, and getting cash to restaurants and other genuinely small ‘small businesses’ ” are “so good and so urgent that they could pass the Congress this week with bipartisan support.” So pass them, he said, and leave the “less‐urgent and more‐controversial policy initiatives” such as increasing the minimum wage and expanding the earned income, child, and child‐care tax credits to “extensive hearings and thoughtful debate” rather than “ramming them through on a party‐line vote” under the cloak of emergency.
Pearlstein points out that the money Biden is proposing for schools and state and local governments alone is “more than the annual discretionary spending of the Departments of Agriculture, Commerce, Education, Energy, Housing and Urban Development, Justice, Labor and Transportation combined.” Is that really necessary?
All of this is about getting the economy moving again. But the way to revive the economy is to stop the pandemic. So speed up the testing and especially the vaccinations. Spend prudently on relief, with due attention to the cautions raised by Summers, Pearlstein, and others.
This demand to pass a bill now; it’s an emergency is an old Washington story. The late, great Bill Niskanen wrote in 2009 that he had witnessed four times in his professional life “that the president has asked for or asserted unprecedented authority on an expedited basis with little or no congressional review. Each of the prior occasions turned out to be a disaster.” He cited the Gulf of Tonkin Resolution that led to the Vietnam War, President Nixon’s “New Economic Policy” of wage and price controls and closing the gold window, the Iraq War resolution, and the Troubled Asset Relief Program (TARP) of 2008.
At the time Niskanen wrote, Obama White House chief of staff Rahm Emanuel was declaring, “You never want a serious crisis to go to waste. And what I mean by that [is] it’s an opportunity to do things that you think you could not before.” That’s often true of these huge emergency bills that don’t get much congressional or media scrutiny. Much of the Patriot Act just after the 9/11 attacks has been described as “a longstanding law enforcement wish list that had been previously rejected by Congress, in some cases repeatedly.” And as Gene Healy and Steven Horwitz wrote in 2009, the stimulus bill was the Democrats’ Patriot Act, “an opportunity to enact a whole variety of programs that they’ve wanted to pass for years.” Robert Pear of the New York Times called it “not just a package of spending increases and tax cuts intended to jolt the nation out of recession. For Democrats, it is also a tool for rewriting the social contract with the poor, the uninsured and the unemployed, in ways they have long yearned to do.” And more: aid to local school districts, job training, high‐speed rail, slow‐speed rail (Amtrak), rural sewers, broadband, new computers for Social Security, $90 billion for “green energy.” An interest‐group wish list and a lobbyists’ bonanza.
And now the Biden plan — the American Rescue Plan — again offered in the name of emergency and including another wish list of items that haven’t made it through the normal congressional process. Beyond the actual Covid‐related measures regarding testing, vaccination, and relief — which may be too high, as Summers argues — the plan includes a sharply higher minimum wage, new OSHA enforcement, an eviction moratorium of dubious constitutionality, increased food stamp funding, and hundreds of billions of dollars the federal government doesn’t have for businesses, Tribal governments, public transit, local schools, and more.
In November I urged President‐elect Biden not to overreach. He has a narrow mandate to not be Trump and to deal with the pandemic, which will revive the economy. If he doesn’t want to listen to me, he should listen to Larry Summers, Steve Pearlstein, and other allies who are urging him to focus his plan on the country’s immediate concerns and the resources available.
Commentary by David Boaz. Originally published at Cato At Liberty. https://www.cato.org/blog/how-bidens-covid-relief-bill-patriot-act