EDITORIAL: Senate should pare back reckless relief bill
Feb. 28—Democrats are determined to spend money America doesn't have on programs it doesn't need at the risk of throwing the economy into recession just as it should be enjoying a post-COVID rebound.
President Joe Biden's $1.9 trillion relief package, headed to the Senate this week, is larded up with spending that has little to do with countering the effects of the pandemic, sends money to people who have not been financially harmed and comes on top of the $4 trillion in relief approved in 2020, at least a quarter of which has not been spent.
The package is so large that some economists worry it will over-stimulate the economy, driving up inflation and triggering a recession.
Worse, it misses the mark in terms of what's needed to accelerate the pace of the recovery. An analysis by the Center for a Responsible Federal Budget determined less than 1% of the package would go toward vaccinating Americans against the COVID-19 virus.
Getting the nation's workforce inoculated so the economy can fully reopen is the most effective step Congress could take in relieving the suffering from the pandemic.
The watchdog group adds that $300 billion in spending has nothing to do with COVID-relief, including $100 million for a Silicon Valley transit tunnel just outside House Speaker Nancy Pelosi's California district.
It also concluded another $500 billion could be cut from the package without reducing its impact. Included in that category are a bailout of private pensions funds and additional cash for local governments and school districts that have already been made whole by previous COVID relief bills.
Taking that spending out would cut the cost of the bill nearly in half and lessen its negative impact on the economy.
It could be cut further by better targeting help to those who really need it. In December, Congress approved a relief bill that sent $600 checks to most Americans, whether or not they have suffered financial harm from the pandemic. This new bill would add another $1,400, and families with household incomes of up to $200,000 annually would be eligible.
Part of the justification for broadly mailing checks is that they will be spent to stimulate the economy. But that hasn't been the case with past packages.
Households that have done OK during the crisis tend to sock the stimulus checks in the bank, helping explain why savings grew by $1.6 trillion last year.
The House bill includes a hyper-inflationary provision to raise the minimum wage to $15 an hour from the current $7.25. That is bound to be stripped out in the Senate after a parliamentarian ruling that, if it were included, the package would require 60 votes to pass.
Democrats hope to adopt this spending spree on a simple majority vote in the Senate. That would make it the first of six COVID-relief packages not to receive bipartisan support.
We would hope at least one Democrat will join Republicans in demanding the bill be pared back to a more fiscally responsible level.
