The American Rescue plan is President-elect Joe Biden’s economic proposal. Here is what both sides are saying about the $1.9 trillion COVID-19 stimulus plan. To have stories like this and more delivered directly to your inbox, be sure to sign up for our daily newsletter.
Top story from the Wall Street Journal: President-elect Joe Biden formally announced his $1.9 trillion COVID-19 stimulus plan on January 15. Among other items, The American Rescue Plan, as it’s known, “calls for a round of $1,400-per-person direct payments to most households, a $400-a-week unemployment insurance supplement through September, expanded paid leave and increases in the child tax credit.” Here’s what else is included in the plan, and here is what both sides are saying about the proposal:
On the Right: Conservatives and right-leaning outlets are concerned about the cost of the American rescue plan. In an op-ed for the Wall Street Journal, John F. Cogan and John B. Taylor focus on the direct checks. Cogan and Taylor note that “one-time cash payments to individuals to stimulate economic growth have been tried on at least five separate occasions,” over the past 50 years. History shows, however, “such spending does nothing to stimulate the economy. In the end, it only adds to the federal debt.” In a separate Wall Street Journal opinion piece, Phil Gramm and Mike Solon aren’t convinced the US even needs more stimulus. In fact, they call the additional spending “entirely political.” Gramm and Solon point out that third-quarter GDP came in at 33.1%, “largely offsetting the record decline in the second quarter.” Fourth-quarter GDP is expected to grow at 10.4% compared to an initial forecast of 2.2%. “Household income is higher than it was before the pandemic, retail sales rose from Nov. 1 through Christmas by 2.4% compared with last year, total household savings are near a record level, the economic harm of the latest wave of infections is far less than the damage from earlier one, and consumption, based on all economic indicators, is set to leap when pent-up demand is unleashed as the vaccine reduces the virus transmission rate.” Gramm and Solon argue that “further stimulus combined with an accelerating vaccination rate could in fact produce an overheated economy.” Lastly, Stephen Moore of Fox News says Biden’s plan “will likely speed America further along the track to bankruptcy, higher interest rates, higher inflation, and much higher taxes.” Moore says “it is a Sen. Bernie Sanders-type wish list of everything conceivable that the left has wanted to spend money on for years, and even decades.” Moore points to Biden’s addition of a $15-an-hour minimum wage increase in the plan as an example saying: “All that is missing is the Green New Deal. Does any of this have anything to do with a health emergency?”
On the left: Democrats and left-leaning outlets generally support the size and scope of the American Rescue plan. Some, however, don’t think it’s enough. Emily Stewart of Vox points out that “the $1.9 trillion in relief Biden is proposing is more than double the $800 billion American Recovery and Reinvestment Act that Democrats passed in 2009 in the wake of the Great Recession.” Stewart says “the size and scope of this proposal is a reflection of some lessons Democrats have learned: In 2009, many lawmakers believed they’d have a chance at another bill to deliver more help, but they never did. So the recovery was slower and more uneven than it could have been had they been more ambitious at the outset.” To that end, some on the left are calling for more stimulus on top of the $1.9 trillion plan Biden proposed. Zachary D. Carter of The Huffington Post says “Biden’s $1.9 Trillion Package Is A Good Start. But It’s Only A Start.” Carter points to Biden’s speech in which the President-elect said, ‘”… a growing chorus of top economists’ no longer believe apocalyptic warnings about the dangers of government spending and government debt. The real danger, according to this new intellectual consensus, is not spending enough.” Carter says, “With the economy running about $3.5 trillion a year short of its February 2020 output, according to economists Mark Paul and Adam Hersh, Biden’s $1.9 trillion price tag will not be sufficient to close the gap between the economy we have today and what we called ‘prosperity’ under President Donald Trump.” In regards to concerns that Biden’s plan includes “wishlist items” like increasing the federal minimum wage to $15 an hour, Maanvi Singh of The Guardian says his proposal is actually proving popular on both ends of the economic spectrum. Singh writes that “two diametrically opposed forces – Democratic socialist Sanders and big business [or] The US Chamber of Commerce, an influential lobbying organization that represents business interests, praised Biden’s proposal.” As Singh notes in the title of her article, there is “no time to waste.”
Flag This: According to FiveThirtyEight, Americans are still overwhelmingly concerned about the economy. As of January 15th, over 85% of poll respondents said they were either “somewhat” concerned or “very” concerned about the coronavirus’s effect on the US economy. Most polls from the past week focused on the January 6th Capitol Hill Riot, but at the end of last month a survey conducted by Business Insider/Survey Monkey, found 43 percent of respondents saying that the direct payments sent to eligible Americans should be over three times the $600 being offered in the current stimulus package. This sentiment supports both President Donald Trump and President-elect Joe Biden’s push for another round of direct payments to most households.