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Kamala Casts Deciding Vote: Senate Dems Rubber-Stamp Biden’s $1.9 Trillion Aid Package, Despite Warnings About Blowback

Kamala Harris, as Vice President and President of the Senate, flexed her new-found political muscles in a polarizing vote to proceed with a $1.9 trillion pandemic relief package over Republican congressional opposition. Reuters reported the news that the Senate has approved of the House’s passage of the relief package:

By a party line vote of 219-209, the House of Representatives passed the budget plan, after the Senate approved it in a pre-dawn vote. Vice President Kamala Harris cast the tie-breaking vote in the Senate for the first time.

Speaker Nancy Pelosi predicted the final COVID-19 relief legislation could pass Congress before March 15, when special unemployment benefits that were added during the pandemic expire.

The sweeping legislation not only contains bi-partisan measures that Republicans would support, such as the remaining $1,400 in relief checks to qualifying citizens, vaccination and testing funding, the eviction ban, and relief to actual “small businesses,” among other such items, it also contains a bevy of more controversial legislative items, such as increasing the minimum wage to 15 dollars an hour.

Steven Pearlstein had blistering criticism of the package in the Washington Post:

[I]f the aim is to permanently expand the economic safety net — which it clearly is — then these initiatives should be subject to extensive hearings and thoughtful debate. Ramming them through on a party-line vote as part of a relief package not only undermines the claim of urgency but raises the risk that Republicans will respond in kind by trying to undo them when they get back in power.

The Republicans, for their part, offered a much smaller bill of $600 billion. Part of the rational is that there are hundreds of billions in unspent relief that could still be used to aid small businesses in struggling Americans.

“As House Democrats push today for $1.9 TRILLION in new COVID spending, remember that $1 TRILLION out of the $3.7 TRILLION in previously enacted stimulus remains unspent!” Rep. Mike Johnson tweeted.

The Louisiana Congressman provided a “brief rundown of unused funds”:

  • Paycheck Protection Program: $280 billion
  • Health Care spending: $239 billion
  • Funding for Schools: $59 billion
  • Economic Disaster Loans: $172 billion
  • Unemployment Insurance: $172 billion
  • State and Local Aid: $58 billion
  • Stimulus Checks: $52 billion
  • Food Stamps: $33 billion

The Biden administration is forsaking all appearances of “unity.” It is even getting blowback from usual allies as it abandons democratic norms in favor of naked authoritarian partisanship.

An economic adviser who served under President Obama, Larry Summers, warned about cost overruns:

As my recent paper with Jason Furman argues, I am all for a far more expansive approach to fiscal policy. But that does not mean indiscriminate support for universal giveaways at a time when household income losses are being fully replaced and checking account balances (at least as of October) were above pre-Covid levels.

Pearlstein also made a persuasive case about the Biden administration’s flawed economic logic.

One plausible reason for insisting on $1.9 trillion is that a package that large is needed to replace the sharp drop in household income and private spending caused by the pandemic. But as Lawrence Summers, who served key roles in both the Clinton and Obama administrations, points out in a recent column, the $3.5 trillion in fiscal stimulus that has already been provided is enough to replace the lost household income many times over. In fact, much of the money has wound up in household bank accounts, which are now at least $1.6 trillion higher than they were at the start of the pandemic. The problem isn’t so much that households in the aggregate don’t have enough money to spend or are too scared to spend it. It’s that because of the pandemic, they can’t spend it on many of the things they’d like to. Another big slug of fiscal stimulus won’t change that.

Indeed, the best economic “stimulus” that could happen for the American people is simple: Re-open the economy.



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OPINION: This article contains commentary which reflects the author's opinion.