Category: budgetreconciliation

Republicans totally miscalculate the moment, think opposing COVID-19 relief is a winner for them

Posted on by Joan McCarter

The House Budget Committee advanced the American Rescue Plan, the $1.9 trillion COVID-19 relief package, on Monday. It combined bills from nine other committees into the budget reconciliation package that will get a final vote in the House at the end of this week, then go to the Senate where it can be passed with a simple majority vote. That part is key, and why lawmakers chose to use the budget reconciliation took for enacting the relief: because you can't count on any Republican to do the right thing. The right thing in this case is spending $2 trillion on helping everyone as opposed to giving it in tax cuts to the very rich.

Republicans are proving yet again how necessary choosing a path for relief that does not require them really is. Thus far, their only contribution has been to insist President Biden "unite" with them and accept one-third of a loaf with their "plan." Their toxicity was proved by Mitch McConnell's forcing Democrats to vote on noxious messaging amendments to get the process underway. Those tactics having failed in stopping the forward motion of the package, Republicans are now insisting their opposition to it is principled and won't harm them politically at all. It's almost as if the 2020 election, particularly the Georgia Senate races, didn't even happen.

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This tactic frankly has more of a vibe of leadership trying to convince individual Republicans that they'd damn well better not stray and end up helping Biden, but nevertheless, that's their plan. "It's clear Democrats have no interest in approaching COVID relief in a timely and targeted fashion and are instead using the reconciliation process to jam through their liberal wish list agenda," House Minority Whip Steve Scalise told Republican lawmakers in an email Friday, continuing to whip them into opposition.

Various Republican officials and hangers-on are keeping up the message. "House Democrats' $2 trillion socialist boondoggle puts partisan politics first and fails to address the most pressing needs facing Americans, like getting kids back in the classroom and reopening small businesses," Torunn Sinclair, a spokesperson for the National Republican Congressional Committee, told The Hill.

Republican strategist Ford O'Connell added "I don't see any risk to Republicans at all opposing this, especially as it relates to the 2022 election." A senior House Republican told CNN's John Harwood there would be no Republican votes for it. "Personally I expect zero. No effort to reach out to House R[epublicans] by majority or W[hite] H[ouse]. Why would any R[epublican] vote for this?" Certainly not because they have any concern for their constituents.

Other Republicans preview how they intend to run against Democrats on this in 2022 and beyond: revisionist history. "Democrats stalled on coronavirus relief for months in 2020 when American families desperately needed it," Mandi Merritt, a spokesperson for the Republican National Committee said. "And what was their first priority when they now control the White House and both Houses of Congress? A politically motivated impeachment—not relief for struggling families. […] We will be sure that voters don’t forget this." Never mind that the House passed the $3 trillion HEROES Act on May 15 and followed up by passing the compromise $2.2 trillion bill on October 1, 2020. Never mind that McConnell completely ignored these bills and refused to even talk to House Speaker Nancy Pelosi about negotiations.

Republicans intent on opposing the bill because they are Republicans and can't do anything to help a Democratic president are insisting that despite the large bipartisan majority of support for the package, opposing it won't hurt them. That poll, from CBS News/YouGov shows 83% approval for the package, including a majority of Republicans. A total of 61% of Republicans in that poll said that the $1.9 trillion package was either about right (34%) or not big enough (27%). Another poll from the left-leaning firm Navigator Research last week found 73% support for the package, including 53% support from Republicans. A New York Times/SurveyMonkey survey in mid-February found 72% approval for it, with 43% of Republicans approving.

That's before the bill even passes. Before people get their $1,400 checks. Before they have more funding for their small businesses. Before they get their coronavirus vaccine. Before their family gets their brand-new monthly child tax credit payments. Once the benefits of this bill actually reach people, that support will solidify among all but the most hard-core Trumpist Republicans. Because the stuff in this bill is that good, and it really will help people.

A reminder: the bill provides $1,400 for every individual—including dependents, both minor and adult—who makes up to $75,000, or $2,800 to couples making $150,000, after which it tapers off, ending at the $100,000/$200,000 cap. That's based on the most recent federal tax filing, so families who lost income in 2020 need to file right away to receive the maximum payment. The government will use 2019 filings otherwise.

The bill also provides direct aid to small business, including restaurants and bars which have been unable to use the Paycheck Protection Program funding. (Disclosure: Kos Media received a Paycheck Protection Program loan.) The child tax credits it is authorizing will be paid out monthly as opposed to annually, and raise the maximum credit from $2,000 to $3,000 for children between ages 6 and 17 and to $3,600 for children under 6. It includes a $400/week boost to unemployment benefits and continues their availability to gig and self-employed workers. It provides hundreds of billions in funding to state and local governments and to schools, and billions for both COVID-19 testing and vaccine distribution.

All of that will spur the nation into recovery, both in public health and economically. Republicans are using an outdated playbook in thinking they'll be able to skate—or even gain—politically by opposing it. They're looking back to 2009, when an inadequate stimulus package by the Obama administration led to a too-slow recovery. Biden isn't making that mistake again. Republicans are also looking back at their mostly successful opposition to the Affordable Care Act, when they made gains in House and Senate seats fighting the new law. Most of the benefits of Obamacare, however, weren't immediately available to people as the law wasn't fully implemented until 2014. Neither the 2009 stimulus nor Obamacare had the huge public support that this Biden package is now receiving.

The benefits of this package will be available immediately and to the majority of households in America, and that will make all the difference.

Sanders, Wyden fight to keep survival checks from being cut by ridiculous austerity arguments

Posted on (Updated by Joan McCarter

Democrats are having a public fight over something that really matters: how much assistance hurting people are going to get from them in survival checks. It's a stupid fight, summed up best by Sen. Bernie Sanders:

Unbelievable. There are some Dems who want to lower the income eligibility for direct payments from $75,000 to $50,000 for individuals, and $150,000 to $100,000 for couples. In other words, working class people who got checks from Trump would not get them from Biden. Brilliant!

— Bernie Sanders (@BernieSanders) February 7, 2021

He's not alone in this with powerful support from Oregon Democratic Sen. Ron Wyden, the new chair of the Finance Committee. The other side is being spearheaded by Sen. Joe Manchin, with back-up from Mitch McConnell's favorite "bipartisan" water carrier, Sen. Susan Collins. They're trying to keep payments from what they call "high-earning" families.

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Look at how Manchin explains this: "An individual of $40,000 income or $50,000 income would receive it. And a family who is making $80,000 or $100,000, not to exceed $100,000, would receive it," Manchin said. "Anything over that would not be eligible, because they are the people who really are hurting right now and need the help the most." Who's missing there? Yeah, everybody making more than $50,001. So he's not even arguing in good faith here, couching this as cutting off payments at $80,000 when that's not what he wants to do.

The gap between $50,000 and $80,000 includes a lot of people who, as Sanders says, got two checks already from the Trump administration and are expecting the third one everybody is talking about, a point also made by Wyden: "I understand the desire to ensure those most in need receive checks, but families who received the first two checks will be counting on a third check to pay the bills." That's so glaringly apparent that it's hard to understand there is any constituency for this fight, including in the White House.

It gets even worse when you drill down to find out where the impetus for the cut comes from, as David Dayen has done at The American Prospect. The debate is being driven by a paper from Harvard economics professor Raj Chetty and others which showed higher-income households not spending the last, $600 round of checks immediately. Dayen uncovers the fact that the Chetty research is not on household-level income data. Instead, data for about 10% of U.S. credit and debit card activity sorted into ZIP codes by the address associated with the card. Those ZIP codes are then grouped "using 2014-2018 ACS (The Census Bureau’s American Community Survey) estimates of ZIP Code median household income," according to the appendix in the Chetty paper. So, as Dayen says, the conclusion that low-income people spent their checks immediately while higher-income people did not, "is by saying that ZIP codes that had lower-income people in them between three and seven years ago contained a higher level of immediate spending than ZIP codes with higher-income people during this period." A period before the pandemic.

That's a damned big supposition. Claudia Sahm, a former Federal Reserve and Council of Economic Advisers economist, tells Dayen, "I think the paper is unsuitable for the policy discussion. […] It's one paper at odds with 20 years of research. […] I know the sampling error has to be in the thousands of dollars, there's no way it’s that precise." What's even worse about this paper is that they didn't even disclose the out-of-date ZIP code basis for their data until late last week, more than a week after it had been highlighted in the traditional media and started taking hold. It's still out there, with The New York Times opinion page giving Chetty and colleagues space to continue their badly sourced argument.

All that's aside from the larger argument: we're in the middle of a global pandemic and the economy is in tatters—just spend the money helping as many people as possible and worry about sorting out who should have to pay any of it back later. Because the need is so great and this isn't a time to skimp. Treasury Secretary Janet Yellen has said as much, and thankfully appears not to be so much on board with this push to reduce payments, though the White House has been vaguely supportive. "The exact details of how it should be targeted are to be determined, but struggling middle-class families need help, too," Yellen said on CNN this weekend. Asked if she thinks the targeting should be higher than $50,000 per person but less than $75,000, Yellen responded: "Yes, I—I think the details can be worked out. And the president is certainly willing to work with Congress to find a good structure for these payments."

There's also this: they're still going to base the payments on 2019 income unless they have 2020 income filed by the time the relief bill is passed. Which means you need to file immediately if you've had a big drop in income. Which means the IRS is going to be flooded with returns at the same time it's trying to make income determinations and trying to determine who gets what. But at least there is the recognition that a lot of people did not have the same income in 2020 as 2019.

Again, the survival checks have been means-tested already, with the first rounds of checks phasing out starting at $75,000 based on out-of-date data. Compounding that is this new argument based on really bad and irrelevant information. Not that what anybody does with their survival checks really matters right now, anyway. Worry about saving the maximum amount of people possible. That will make the economy come back stronger and faster and then the rest can be sorted out, if necessary, with tax reform.

Democrats ditch Republicans on COVID-19 relief, start budget reconciliation process

Posted on by Joan McCarter

House Democrats are moving forward on a COVID-19 relief bill, preparing to ditch the Senate Republicans and provide critical relief to the American people without them. Initial votes could come as soon as next week, and President Joe Biden has signed off on using the procedure—budget reconciliation—to get his relief package through as Republicans in the Senate continue to obstruct.

"Reconciliation is a means of getting a bill passed. There are a number of means of getting bills passed. That does not mean, regardless of how the bill is passed, that Democrats and Republicans cannot both vote for it," White House press secretary Jen Psaki said. "So the president obviously wants to make this bipartisan, hence he's engaging with members of both parties and he remains committed to that." House Budget Chairman John Yarmuth said Monday that he is preparing the reconciliation instructions for the package, and is even going to include Biden's $15/hour minimum wage increase, even though that's a "stretch" in his words to qualify under the rules for the procedure.

Budget reconciliation became a thing as an optional procedure under the Congressional Budget Act of 1974. That act requires Congress to come up with a budget resolution every year, and that resolution can instruct the committees to craft bills that would reconcile current law with the decided-upon budget plan. The main advantage of legislation developed with it is that it is considered under expedited procedures on both the House and Senate, and it is not subject to the 60-vote threshold in the Senate that has killed everything good any Democratic president has tried to do since 2008. It begins with a resolution that instructs the relevant committees in both the House and Senate to draw up legislation to meet a budget specified within the resolution—the bill that the committees finalize must either reduce or increase the federal deficit by no less or no more than the resolution determines. Anything included in the legislation after it is combined, or reconciled, by the House and Senate has to thus change either spending or revenue. Sort of. Budge reconciliations can't touch Social Security, they can't increase the deficit in a 10-year window, and they are limited to federal spending or revenue. Mostly.

The "sort of" and "mostly" as a limit in the Senate's rather expansive power to decide what it wants, one has a simple majority. The Congressional Budget Office and the Senate parliamentarian act as the referees for the process, the CBO making the budget projections and the parliamentarian ruling what provisions can be included depending on the degree to which a provisions budget impact is "incidental"—does it impact spending or revenue—or not. If the Parliamentarian rules it incidental under the Byrd rules (a tightening up of the process spearheaded by then-Sen. Robert Byrd in 1958), then it comes out. That is unless the president of the Senate, the person sitting in the chair who in this case would be Vice President Kamala Harris, overrules the parliamentarian. That hasn't happened frequently, but we also haven't been in a global pandemic that's crippling the economy frequently.

One authority on the federal budget and Senate rules believes that even the minimum wage increase could be passed in reconciliation, along with the rest of the provisions—including another round of direct $1,400 payments, increasing and extending emergency unemployment benefits, hundreds of billions in aid to state and local government and schools, funding for vaccine production and distribution, expanding testing and tracing, as well as other proposals. Bill Dauster, who served as deputy chief of staff to former Senate Majority Leader Harry Reid, "said in a guest op-ed column for CQ Roll Call that a minimum wage boost has enough budgetary impact to be considered under the Byrd rule."

Now that McConnell has caved to allow the Senate to organize, the committees can start the work of drafting their components of the reconciliation bill. There's a hard deadline for them to get it accomplished—another unemployment cliff in March, because that's as long as Senate Republicans would let that go. There's also that matter of an impeachment hearing that begins in a couple of weeks. The House, Yarmuth said Monday, is on it: "we will be prepared to go to the floor as early as next week."