Biden’s stimulus plan is no ‘free lunch’: Financial expert
Lebenthal Global Advisors President Dominick Tavella discusses President-elect Joe Biden’s coronavirus stimulus proposal and the White House push to return Fannie Mae and Freddie Mac to private ownership.
President-elect Joe Biden is already facing backlash over the $1.9 trillion coronavirus relief proposal designed to combat the economic downturn and deadly pandemic that he outlined on Thursday night.
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Biden's plan includes $20 billion to accelerate vaccine distribution, a $15-an-hour minimum wage hike, an extension of supplemental unemployment benefits through the end of September and a one-time $1,400 stimulus check — drawing criticism from progressive lawmakers who wanted to send $2,000 payments, which he previously said he supported.
"$2,000 means $2,000," Rep. Alexandria Ocasio-Cortez, D-N.Y., told the Washington Post. "$2,000 does not mean $1,400." Ocasio-Cortez said Democrats should pass $2,000 stimulus checks in addition to the $600 payment from December, rather than increase it by $1,400.
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Rep. Cori Bush, D-Mo., sent a brief tweet criticizing the incoming president's proposal: "$1,400 ≠ $2,000."
Rep. Ilhan Omar, D-Minn., called on Congress to "immediately" pass $2,000 checks in a seeming swipe at Biden's $1,400 offer.
"$600 wasn't enough," Omar tweeted. "The American people are struggling to make ends meet and need relief. We must immediately pass $2,000 stimulus checks."
While Biden initially wavered on whether to support a $2,000 cash payment as part of the next relief package, he ultimately threw his full weight behind the proposal in the final days before the Georgia runoffs, which played a key role in whether he'd be able to accomplish his legislative agenda.
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"If you send Jon and the Reverend to Washington, those $2,000 checks will go out the door," Biden said on the eve of the special elections. "And if you send Sens. Perdue and Loeffler back to Washington, those checks will never get there. It's just that simple. The power is literally in your hands."
Democrats will control the Senate by the thinnest of margins after twin victories by Jon Ossoff and Raphael Warnock in the Georgia runoff elections last week clinched the party a 50-50 split in the upper chamber, with Vice President-elect Kamala Harris able to cast a tie-breaking vote. Democrats hold a slim 222-to-211 advantage in the House.
Even with a monopoly on power, however, Biden could have a difficult time getting the aid package passed: Unless the Senate uses a tool that requires only a majority vote — which Biden has signaled he doesn't support — then the legislation will need 10 GOP votes in order to pass.
Republicans have also criticized the sprawling proposal, arguing it didn't do enough to help the pandemic-ravaged economy.
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“President-Elect Biden launches yet another economic blind buffalo that does nothing to save Main Street businesses, get people back to work, or strengthen our economy,” Rep. Kevin Brady, R-Texas, said in a statement. “Special interests and liberals are cheering. The jobless and Main Street are left shaking their heads.”
Sen. Joe Manchin, a moderate Democrat from West Virginia, also said last week that he would "absolutely not" support sending Americans a $2,000 stimulus check.
“Absolutely not. No,” Manchin told The Washington Post, when asked whether he supports a fresh round of stimulus checks. “Getting people vaccinated, that’s job No. 1.”
Still, Biden's proposal garned support among Democratic leaders: In a joint statement, soon-to-be Senate Majority Leader Chuck Schumer, D-N.Y., and House Speaker Nancy Pelosi, D-Calif., said they "will get right to work to turn President-elect Biden’s vision into legislation that will pass both chambers and be signed into law.”
“These proposals by the Biden-Harris administration will be critical to getting our country through this challenging period and towards a period of recovery,” they said. "We echo the president-elect’s call for bipartisan action on his proposal and hope that our Republican colleagues will work with us to quickly enact it.”
Biden released his plan during a primetime address on Thursday amid fresh signs that a nationwide surge in COVID-19 cases is causing the nation's economy to deteriorate: In December, employers shed 140,000 jobs, marking the first loss since the early days of the pandemic.
In total, the U.S. has recovered roughly half of the 22 million jobs lost during the first two months of the pandemic. There are still about 9.8 million more Americans out of work than there were in February before the crisis began.
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