Late Friday, the House took its first vote to pass President Biden’s $1.9 trillion stimulus package, the first step toward their goal of enacting the plan into law before a March 14 deadline when some unemployment benefits will expire.
Much of last week’s media coverage of the plan centered around the Senate parliamentarian’s decision to not allow consideration of a minimum wage increase to $15 per hour in the spending plan. PRI’s Rowena Itchon recently wrote about the minimum wage debate on Right by the Bay, noting a Congressional Budget Office study showing that “raising the federal minimum wage to $15 an hour by 2025 would cost 1.4 million U.S. jobs over the next four years.”
That debate aside, economists are questioning whether another massive stimulus plan is really needed right now, when you consider that states like California are experiencing large budget surpluses and the economy is relatively stable.
“The best thing the federal government can do is stop wasting money on politically motivated programs that are economically unwise,” said PRI’s Wayne Winegarden in an interview with The National Interest last week. “We need to focus on the public goods that the government should be providing and stop with the illusion that federal government spending is a free lunch with no consequences. The more and more we spend, the larger these consequences are becoming.”
A close look at the math in the Democrat stimulus plan reveals that the plan is anything but focused on Covid relief.
Last week, the Wall Street Journal editorial board did some back-of-the envelope math and determined that direct Covid relief only totaled about $825 billion in the Democrat plan. They wrote, “the rest of the bill—more than $1 trillion—is a combination of bailouts for Democratic constituencies, expansions of progressive programs, pork, and unrelated policy changes.”
House Republicans took it a step further last week, arguing that roughly $1 billion from prior Covid relief plans have not yet been spent, and that just 9 percent of the current plan was focused on Covid-related health spending, with 91 percent went for other priorities.
Among the non-Covid spending items they objected to in the bill:
- $100 million to fund BART’s extension to downtown San Jose – a project which has ballooned in cost from $4.6 billion in 2018 to $6.9 billion today – which Republicans called “Speaker Pelosi’s Silicon Valley Subway” (Update: In a victory, Speaker Pelosi has announced that the funding for this project will be stripped from the bill based on a ruling from the Senate parliamentarian, CNN reports.)
- $1.5 million for the Seaway International Bridge in New York, which The Daily Caller called a “pet cause for Democratic Sen. Chuck Schumer” (Update: Funding for the New York project will also be pulled, according to CNN.)
- $135 million each for the National Endowment for the Humanities and the National Endowment for the Arts, and $200 million for the Institute of Museum and Library Services
House Oversight Committee Ranking Member James Comer (R-KY) and Budget Committee Ranking Member Jason Smith (R-MO) also objected to the fact that most of the plan’s school reopening funds would come in later years.
“Of the $130 billion in spending that Democrats claim is desperately needed to reopen America’s K-12 public schools, only 5% would occur this fiscal year,” they wrote.
The nonpartisan Committee for a Responsible Federal Budget urged policymakers to adopt 5 reforms to improve the stimulus package passed by the House.
These recommendations include removing or offsetting unrelated policies, right-sizing state and local aid to meet real needs, and better targeting rebate checks based on need. They also recommend extending but then tapering off expanded unemployment benefits as the economy recovers and adding triggers to the package so spending is automatically adjusted downward as the economy improves. If Congress enacted their reforms, the size of the bill would be cut down to $1.3 trillion.
If Democratic leaders in Congress and President Biden wanted to reach a bipartisan deal, they could surely enact these and many other common-sense ideas to refocus the project’s spending priorities toward true Covid relief and pare down the legislation’s cost size to something more realistic.
But, of course, that’s not their goal here. This so-called Covid relief bill is far more about flexing the muscles of a new legislative majority in Congress and appropriating money to pet projects in lawmakers’ districts than meeting America’s actual Covid-related needs.
Tim Anaya is the Pacific Research Institute’s senior director of communications and the Sacramento office.