President-elect Joe Biden has unveiled an economic relief plan that would deliver $1,400 to most Americans and invest in a national vaccination program — and also endorses a whole host of Democratic policy priorities from increasing the minimum wage and expanding paid leave to extending unemployment benefits.
Biden is set to address the nation on the details of the plan, called the American Rescue Plan, on Thursday night at 7:15 p.m. ET as he prepares to assume control of the federal government next week amid a still-raging pandemic throttling the country’s health care system and economy. On average, the coronavirus has killed more than 3,000 Americans a day over the past week, and unemployment claims nationwide are on the rise. Nearly 1.2 million Americans applied for unemployment benefits last week, according to the latest report from the Department of Labor.
The $1.9 trillion plan is designed to both immediately address those crises, while also delivering on longer-term Democratic priorities.
“The American Rescue Plan will address the stark, intergenerational inequities that have worsened in the wake of COVID-19,” says an outline of the plan.
The 19-page outline sprawls from taxes to health care to workplace safety, and it’s not clear which of its policies will remain top priorities when negotiations begin in earnest. Some items, such as unemployment benefits, are already on the coming Capitol Hill agenda this year.
The plan, as currently designed, would likely need bipartisan support to pass Congress. But Democrats, who will soon have control of the Senate majority, also have a legislative maneuver called budget reconciliation available to them, which will allow them to pass certain proposals with only a simple majority.
In its last COVID-19 relief bill, Congress extended federal unemployment benefits for gig workers and the long-term jobless only until April. Biden’s plan would extend benefits through September, and also boost the $300 per week federal supplement to $400.
That’s a more modest increase than top congressional Democrats are currently demanding. Sen. Ron Wyden (D-Ore.), who will be the chairman of the Senate Finance Committee once Democrats take control of the Senate, and was instrumental in writing the original $600 unemployment insurance program in March, said he intends on pushing a return to that original benefit.
“The new jobless claims are going to be especially important to Senate Democrats and it will really strengthen our case,” Wyden said Thursday morning, citing new numbers released Thursday showing 18 million Americans claiming unemployment aid. “The original four-month law actually reduced the poverty rate.”
The plan also appears to omit a proposal favored by Wyden and many Democrats to tie benefits to the unemployment rate instead of setting an arbitrary cut-off deadline. Biden supports the idea and it’s mentioned as a possibility after the September cut-off, but a senior official said he is not prioritizing economic triggers for jobless benefits in the administration’s first proposal.
In a statement after the proposal’s release, Wyden said he looks “forward to taking the lead” on the proposal, while reiterating his support for increasing the jobless benefit and making the program more responsive to the economy.
A core pillar of Biden’s proposal is boosting vaccination, through what he’s calling a “national vaccination program” that will provide states and local governments with an extra funding, above and beyond what last year’s COVID-19 relief bill offered. Biden has said his goal is to administer 100 million doses in the first 100 days of his administration ― a pace that is higher than current levels, but still a lot lower than what is likely necessary to achieve herd immunity by summer.
The Biden plan also calls for the federal government to launch “community vaccination centers around the country” and deploy “mobile vaccination clinics to hard-to-reach areas,” although the transition team has not specified whether the federal government will be creating and running those centers directly or whether it will simply be providing support to state and local governments, many of which have already launched some efforts along those lines.
Also in the rescue proposal: A call to hire 100,000 public health workers, both to combat the pandemic and create jobs, as well as funding for schools to test and prepare classrooms for a return to in-person learning.
The proposal includes expansions of assistance already on the books and new funding for struggling public programs. It includes an additional $30 billion in rental and utilities assistance, $5 billion for housing those at risk of homelessness, extensions of the eviction moratorium and the increased nutrition benefit, more than $150 billion in funding for schools and funding for struggling public transit systems, among other programs.
The incoming administration also wants to pass a slew of changes to low-income tax credits that Democrats have sought in recent years, including an increase in refunds for parents from the child tax credit and a boost to the earned income tax credit for childless adults. But Biden has apparently not embraced proposals to make the credits payable in advance, meaning the changes wouldn’t benefit anyone until 2022, and would only boost refunds for one tax year.
If parents received tax credits in advance ― as House Speaker Nancy Pelosi (D-Calif.) and Ways and Means Chair Richard Neal (D-Mass.) proposed last year ― the policy would resemble the kind of child benefit that is standard in other advanced countries, and it would probably put a huge dent in child poverty.
The proposal’s $1.9 trillion price is significantly higher than anything Republicans have been comfortable with in recent months, but Biden has repeatedly argued deficit spending is necessary to combat the pandemic’s damage. The proposal does not include any tax increases or revenue raisers to offset the cost of the aid.
“The consensus from economists from everywhere from the Fed to the IMF to other top institutions, is that at this very precarious moment in the crisis,” the senior Biden official said. “The risk of doing too little at this moment is far greater than the risk of doing too much and therefore. The investments in this package will actually deliver real relief, prevent scarring, prevent human suffering and actually put us on a path to a stronger recovery, and a stronger and more stable fiscal position.”
That said, Democrats do have a lot of political considerations to take into account. Many Biden officials remember the political failures of the 2009 economic relief package, the American Recovery and Reinvestment Act, a policy that economists maintain was economically sound, but Republicans made so politically toxic that Democrats lost control of the House just a year later.
That’s a history that will likely define the initial negotiations as Biden comes into office with slim majorities in both chambers of Congress.
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