Democrats' $1.9T COVID relief bill is creating divisions. Here's why

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Melissa Nann Burke, The Detroit News
·8 min read
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Feb. 26—WASHINGTON — The U.S. House on Friday will consider Democrats' $1.9 trillion coronavirus relief legislation, which if passed would give Joe Biden his first big legislative win as president and trigger another wave of government spending.

Unlike the two major COVID-19 relief packages adopted by Congress last year, Biden's massive stimulus proposal is more contentious and lacks bipartisan support.

Michigan Republicans argue the measure is packed full of non-COVID-related liberal "pork" and that Congress already approved $4 trillion in aid, including $900 billion in December. They charge that Biden's willingness to pass the massive measure with Democrats alone is an abandonment of his unity message.

"Quite frankly, it's not the direction that President Biden promised for going in a bipartisan way," said GOP U.S. Rep. John Moolenaar of Midland.

But Michigan Democrats said the danger of doing too little at this point in the pandemic is greater than spending too much, noting the nation just marked 500,000 dead from the virus.

"The urgency is not a political issue. This is literally life and death," said U.S. Rep. Dan Kildee of Flint Township and chief deputy whip for House Democrats.

"We don't think this is too much. We think what we've included is what is needed to get us through 2021 and through this pandemic. At least this phase of it."

The House package includes $400 billion for a national vaccination program and the reopening of schools; $1,400 in direct payments to individuals; and $350 billion in aid for state and local governments.

It includes a $15 hourly minimum wage, though that provision is expected to be removed by the Senate after it was ruled out of order with that chamber's rules late Thursday.

Democrats are rushing to pass the package by mid-March when benefits such as enhanced unemployment insurance are due to expire. The House legislation would extend the unemployment benefits through August, boosting the weekly amount to $400.

"This is triage," U.S. Rep. Haley Stevens, D-Rochester Hills, said Thursday on CNBC. "We all know we need the funding for the vaccines, the testing. We're long overdue with some of the economic provisions of this bill."

She highlighted backing for the package from the U.S. Chamber of Commerce, the U.S. Conference of Mayors, over 150 business executives, as well as polling suggesting the relief is popular among both Democrats and Republicans.

But some economists have warned the package is too large, with the top economic adviser to former President Barack Obama, Larry Summers, saying it could "set off inflationary pressures of a kind we have not seen in a generation."

Treasury Secretary Janet Yellen last week defended the size, saying the country is "digging out of a deep hole" and that the Federal Reserve has the tools to deal with the risk of inflation by adjusting rates.

"The greater risk is of scarring of people, having this pandemic taking a permanent lifelong toll on their lives and livelihoods," Yellen said on CNBC.

Centrists thwarted

Centrist lawmakers in both parties had hoped for a more targeted, independent bill that would carve out the components with urgent need, such as expanding vaccine access and testing, small business aid and funding for schools to reopen safely.

Instead, Democrats are using a process called budget reconciliation to get the legislation through the Democrat-led Senate with a simple majority.

"I'm deeply frustrated by the budget reconciliation process," U.S. Rep. Peter Meijer, R-Grand Rapids Township, said during a university forum this month. "It truly means that no Republican input is required whatsoever."

Rep. Elissa Slotkin of Holly, a moderate Democrat, has been vocal about her distaste for the process for the bill, rather than pursuing a bipartisan effort.

She also said it's "overly dramatic" for colleagues to complain after GOP leaders used reconciliation to adopt major legislation such as the tax reform bill passed under President Donald Trump.

Slotkin was still deciding this week whether to support Biden's stimulus package. In the House bill, she said she sees a lot of important elements, such as the state and local support, which would help local governments that lost tax revenue during the pandemic.

"But there's also things in there that I don't love," Slotkin said. "I am leaning toward the good outweighing the bad."

'Taxpayers' hair on fire'

The size of the package generally is a nonstarter for Republicans, who are hollering about millions of dollars allotted for the National Endowment for the Arts, the National Endowment for the Humanities and the Institute of Museum and Library Services.

"All of those have good programs, and I've supported some of those in the past," said U.S. Rep. Tim Walberg, a Tipton Republican. "But in a pandemic COVID relief bill, this puts my taxpayers' hair on fire when they see that kind of thing."

U.S. Rep. Lisa McClain, R-Bruce Township, said Democrats are treating the legislation like an omnibus bill jammed full of pork, without a chance to debate the issues on the floor.

"We already have $1 trillion of taxpayer money that we haven't allocated from the last COVID relief package. Now, we are going to borrow more money on the backs of our kids and grandkids when we haven't spent the first money?" she said. "It doesn't make any sense."

Republicans also object to the funding for states and local governments as "bailouts" for blue states that they say mismanaged their finances and hurt their own economies through strict COVID restrictions.

"Why should South Dakota, Florida, Ohio and Indiana be forced to pay for states like Michigan, California and New York who have shut the states down to economic growth? Walberg said. "I have a real problem with that. I've said that all along."

Kildee dismissed the argument as a "knee-jerk" anti-government response.

"The truth of the matter is that virtually every institution in our society has been hit hard by the economic and health impacts of the pandemic," Kildee said.

"Also state and local governments have been hit because there's this combination of increased demand for services and — because of the economic slowdown necessary to save lives — the loss of revenue."

$15 wage stirs division

Lawmakers have been split on whether the $15 minimum wage hike belongs in the package — long a priority for progressive Democrats.

The Democratic push would increase the minimum wage over five years and gradually phase out the tipped wage. Some states have adopted higher minimum wage rates, including Michigan at $9.65 an hour.

Democrats say the measure is needed to boost the standard of living for millions, including workers who have toiled on the front lines during the public health emergency.

Even if the wage hike is removed by the Senate after Thursday's development, the House would likely pass it as a separate bill, as it did last Congress, said U.S. Rep. Andy Levin, D-Bloomfield Township.

Levin noted the national wage rate of $7.25 an hour hasn't gone up for 11 years. If it had kept up with productivity since the 1960s, he said, it would now be over $20 an hour.

"It's popular. It's needed to pull people out of poverty. And all the money they earn they'll just plow back into the economy because that's what lower-wage workers have to do," Levin said.

"It'll actually help businesses because people will spend the money, and they spend it locally. I don't think there's any real evidence that it leads to job losses."

Walberg argued the wage increase would hurt businesses at a time when Congress is trying to bring relief to job providers.

"If you say every person who's going to work at a fast-food restaurant is deserving from day one of $15 an hour — I don't think my kids would have been worth that," he said.

Charley Ballard, an economist at Michigan State University, is concerned the proposed national wage increase would be "too much, too fast."

"Don't get me wrong. I very much favor an increase in the national minimum wage, which has been stuck at $7.25 per hour for 12 years. The question is how much do we raise it, and how fast?" Ballard said.

"The problem is that we really don't know how large the job losses will be as a result of more than doubling the minimum wage in only a few years. Why don't we know? Because nearly all of the studies are based on data from smaller changes."

Ballard suggested an increase to $12 per hour is more doable without substantial job losses.

McClain said Congress should not further extend the enhanced unemployment because business owners in her district say they can't find workers, claiming that people are passing up work because they make more from their benefits.

Levin said he's heard the same complaints from small business owners in his district, but that data has shown that the federal program last year to enhance benefits by $600 a week actually helped to save businesses, rather than hurt them.

"That extra money is what kept the economy afloat during that time, and people who are unemployed had no choice but to plow that money immediately into rent and groceries and paying their bills," Levin said.

"What we need to do is pass this stimulus if we want to put people back to work."