It is not very often that a president receives everything he requests, but this was what happened.
President Joe Biden requested $1.9 trillion to help the country recover from the coronavirus crisis. Democrats in Congress provided that amount.
The American Rescue Plan was filled with rent assistance, tax rebates and direct payments. It also had money to distribute the vaccines that were just becoming available. It was a sign of Biden’s ability to fulfill his campaign promise that Washington’s lumbering machinery would be restored to working in less than two months.
The legacy of the legislation is much more complex than it initially appears. It could be Biden’s first success, or it could be a trap he created for himself.
It could have been a little bit of both.
Friday marks the anniversary of Biden signing the American Rescue Plan. It also marks the second anniversary World Health Organization’s declaration declaring that the coronavirus had became a global pandemic. Administration officials see the relief package as an essential step to protect the economy and encourage a recovery. They point to the historically low unemployment as evidence of their success.
“Looking at the resilience and equity of the recovery in the face delta, omicron, and now military conflict within Europe, that strategy already seems wise,” Gene Sperling, a Biden adviser, said. Sperling was tapped to oversee implementation.
A small portion of the bill’s budget was dedicated to fighting the pandemic. This included purchasing vaccines and treatments, testing, support, and treatment for those infected by the virus that has claimed the lives of more than 959,000 people in the U.S.
Rest was to support state and local governments, ease job loss pain and inject money into American pockets.
Critics claim that the policies have driven up prices because they fuel consumer demand at a moment when supply chains can’t keep up. This has stifled momentum from Democratic efforts for generational changes like expanded education programs and subsidized child care.
Jason Furman, a Harvard economist and former top economic advisor to President Barack Obama, said that “the gamble was it would create success that would make people want more.” It contributed to inflation, which made people want to do more.
He said, “In some ways that’s the greatest consequence.” It was a gamble and they lost that bet, which hurt.
Inflation reached 7.9% in the past 12 months. This is the highest level in 40 years. Furman estimates that the rescue plan was responsible about 2.5 percentage points.
Michael Strain, director for economic policy studies at conservative American Enterprise Institute, puts the figure at 3 percent.
“We didn’t really need another stimulus. Strain stated that the economy was already rapidly growing and that two measures totaling $3.1 billion had been signed by President Donald Trump before Biden became president.
Officials from the Administration reject these inflation estimates and point to a study by the San Francisco Federal Reserve Bank, which found that the rescue plan contributed less than 1% to the increase.
Sperling stated, “The stark truth is that there are higher prices as well as supply chain shocks in almost every major economy around the world.”
Inflation was the main reason Sen. Joe Manchin (D-W.Va.) ended Democratic hopes of using their unification of Washington to expand the social safety net. Biden’s argument that his “Build Back Better” agenda would increase rather than limit prices didn’t stick.
Manchin stated that inflation is real and will not go away anytime soon. Manchin spoke to Fox News Sunday in December.
The failure to pass that legislation also ended efforts to extend monthly child tax credit payments , which were initiated with the rescue plan. Last year, $93 billion was sent out to 45 million families with 65 millions children.
Rep. Pramila Jayapal (D-Wash.), said that she did not regret any inflation that the legislation may have caused and described it as “a consequence that we have to deal with.”
Jayapal, who is the chair of the Congressional Progressive Caucus, stated that “There’s no doubt that the American Rescue Plan put money into people’s pockets and kept businesses open, got shots to arms, and did the type of things that our country would need if its economy was going to recover.”
Biden is still working to realize his goals. White House spokeswoman Emilie Simons said that the president is still working with Congress to reduce American families’ kitchen costs by addressing prescription drug prices and energy costs.
The federal government has now spent almost all of its COVID-19 direct COVID-19 support. This included free at-home testing, vaccine treatment for the uninsured, and payment for vaccines sent abroad to prevent the spread of more dangerous variants.
Television ads, promotions, and incentives pushed up vaccination rates to the margins. However, they were not enough to counter rampant misinformation or partisanship surrounding these life-saving shots. The U.S. adult vaccination rate is 75%, which is well below the rates in other advanced countries.
The White House is urging Congress to approve additional money for antibody treatment, a preventative medicine for the immunocompromised, and to fund community testing sites.
Jen Psaki, White House press secretary, stated Thursday that “We need this money.” “Without additional resources from Congress the results will be dire.”
The funding proposal could be a casualty in negotiations over a larger budget measure that must pass before the end of this week to keep the federal government functioning.
While the omicron wave coronavirus infections are rapidly decreasing, more than 1,100 Americans still die each day from this virus. Most people aren’t vaccinated, or have their immunity boosted.
Although the pandemic lasted longer than Americans expected, the U.S. is closer to its pre-pandemic norm. Mask-mandates have been lifted across the country and nearly all schools are now open for learning in person. Offices are also starting to fill up again with workers.
Administration officials claim that a large portion of the remaining money from the rescue plan, like the COVID funds has already left the federal government.
Over 170 million individual direct payments, also known as Economic Impact Pays, totaling at least $400 billion were made. The average amount distributed was $2,300.
Schools were awarded $122 billion in aid funding. Additional funds were directed to homeless students and children with special needs. Colleges and universities have received nearly $40 billion.
Child care services were also supported by another $39 billion. Money has been awarded to more than 150,000 child care providers that serve over 5 million children.
Over $245 billion has been distributed in state, local, territorial, and tribal governments. An additional $105 billion will be distributed in May.
The pool of dollars to support state and local governments has been controversial. Some critics argue that it is unnecessary since state governments saw double-digit growth of tax revenue.
Jim Kenney, Philadelphia Mayor, stated that the money saved essential services such as firefighters and paramedics.
He said, “Imagine a grandfather who is in a medical emergency and waits for help to arrive.”
Kenney said that without the money, it would have led to hundreds of layoffs among frontline workers in cities.
Heidi Sheirholz is the leader of the liberal Economic Policy Institute and said that legislation is “a key reason we are in such a strong recovery right now.”
She said, “I’m certainly not saying it was perfect.” “But it made it possible for households not to have to go into austerity.”
Nearly half of the $46.5 billion in emergency rental assistance funding was also provided by the rescue plan. This program began slowly because state and local officials were unable to create a new system.
The program gained momentum last summer and has now distributed more than $25 billion in 4.1 million installments. According to Treasury officials, 80% of the money was distributed to tenants with low incomes. The remainder of the money will be spent before the end of the year.
Peter Hepburn, Princeton University’s research fellow at the Eviction Lab, stated that evictions in 2021 were only half what they would be in a normal year. This suggests that 1.36 Million evictions could have been prevented. Evictions fell 33.1% and 27.7%, respectively, last summer after the nationwide eviction moratorium was lifted.
He described it as a “pretty striking accomplishment.”
Sperling cited the rental assistance program to illustrate how the rescue plan can pay off in the future, as evictions can be a setback that can cause financial ruin for American families for many years.
He stated that “Preventing further harms is going be paying serious benefits, both in terms of the long-term economy and basic human well being and dignity.”
