Why the New Covid Relief Bill Is Something to Celebrate
Democrats got almost everything they wanted in the $1.9 trillion stimulus bill
The tendency to poke holes in everything and to focus on what went wrong (or what didn’t go right) is a difficult one to resist, especially in the age of social media. But that’s a tendency you should absolutely resist when it comes to the $1.9 trillion Covid relief bill that the Senate just passed, and that Joe Biden will soon be signing into law. This is a genuinely impressive and important bill. It will not only bring much-needed relief in the form of $1,400 checks for every member of a family and give unemployed workers extra benefits for the next six months, but it will also put a significant dent in the U.S. poverty rate, particularly the child poverty rate. If you compare it to the stimulus bill that Democrats passed in 2009, soon after Barack Obama took office, the Covid bill is more than twice as big and far more progressive in its impact (meaning it’s better targeted at people who need help). And perhaps the most impressive thing about this bill is that it got through Congress without being watered down.
To be sure, there were a few changes that were made to the bill in the Senate, largely, it seems, to keep Sen. Joe Manchin of West Virginia on board. The most important of those reduced the extra benefits for unemployed workers from $400 to $300 a week. In a more sensible world, that wouldn’t have happened, since the last thing you should trim in an economic relief bill is unemployment benefits. But relative to what many expected, the changes were surprisingly small. Before Congress began considering this bill, many pundits thought the original $1.9 trillion price tag would have to be significantly reduced in order to keep all 50 Democratic senators on board. (That no Republican senator would vote for the bill seemed like a foregone conclusion.) A $1.2 trillion bill certainly seemed possible. Instead, the bill Congress passed looks surprisingly similar to the one it started with.
That’s different from what happened with Obama’s 2009 stimulus bill, which was meant to deal with the biggest economic crisis since the Great Depression. That bill was too small to begin with — even though Christina Romer, the chair of the Council of Economic Advisers, had concluded that a $1.8 trillion stimulus was necessary to cover the output gap, concerns about political practicality meant that the eventual proposal was just north of $800 billion. (After being told $1.8 trillion was unrealistic, Romer had actually come up with a $1.2 trillion proposal, but even that was considered implausibly large.) That $800 billion was completely inadequate to the scale of the problem, and yet Democrats ended up shrinking the bill from there, and adding provisions that had no meaningful impact on the economy, in order to get the support of Republican senators Susan Collins and Olympia Snowe.
Nothing like that happened this time around. With the unemployment rate already down to 6.2%, and the economy ready for a post-pandemic boom, $1.9 trillion is adequate to the scale of the problem. And the bill’s provisions are largely well targeted — checks, extended unemployment benefits, big child tax credits (which is what will help bring down child poverty), rental and homeowner assistance, money to reopen schools and to expand testing and vaccine distribution. It also makes a big chunk of unemployment benefits tax-free, and covers the full cost of COBRA for unemployed workers who had health insurance through their jobs, letting them keep their health insurance through September.
The fact that a $1.9 trillion bill with all of these provisions in it could get through Congress — with the support of Joe Manchin, a Democrat from one of the most conservative states in America — speaks to two things. First, it’s yet another piece of evidence that the obsession with deficits which dominated American politics through the 1990s and 2000s has been replaced, for good reason, with a concern with closing output gaps and getting the economy to full employment. Second, it’s a testament to how much more progressive the Democratic Party has become over the past decade. The Covid relief bill isn’t, after all, so much bigger and more progressive than the 2009 stimulus bill because Joe Biden is so much more liberal than Barack Obama was. The bill is so much more progressive because Democrats are.