CORONAVIRUS STIMULUS

When will Joe Biden's American Rescue Plan be approved?

The American Rescue Plan aims to heal the ailing US economy with ambitious proposals, whether they are bold enough or too bold will decide its fate.

When will Joe Biden's American Rescue Plan be approved?
Samuel Corum AFP

President-elect Joe Biden wants to hit the ground running with a series of policies after he is inaugurated on 20 January. Part of his agenda is the American Rescue Plan; an ambitious $1.9 trillion wide-ranging covid-19 recovery fund that will require negotiations even within his own party to get passed.

One of the most popular features of the plan among the American public is the direct stimulus payments to individuals. Biden’s plan calls for topping up the $600 payments passed in the $900 billion coronavirus relief bill in December with an additional $1400. Having promised $2000 payments if Democrats won the senatorial runoff elections in Georgia, some members of his party are now calling for just that, saying that $1400 is not enough.

What is the American Rescue Plan?

Biden’s plan to tackle the economic and health crisis brought on by the covid-19 pandemic is an expansive list of policies to deal with the challenges America is facing. The plan deals with vaccine distribution, reopening schools, providing funds for state and local governments and small businesses, as well as financial relief for Americans suffering from the aftermath of the coronavirus pandemic.

Whether Biden can get the package through as one big package or if he will have to break it up into smaller pieces has yet to be seen. On some parts of the proposal both Democrats and Republicans can agree but others face strong opposition.

American Rescue Plan an investment in the future

The size of the bill is daunting with a price tag of $1.9 trillion, which is less than the $2.2 trillion CARES Act that help lead the US to an initial recovery in the spring that began to peter out in fall. After months of negotiations to deliver more relief spending to hold up the recovery, a $900 billion bill was passed in December as the covid-19 infection rate and deaths began to soar once again. If passed, Biden’s plan would push the total spent so far to tackle the damage caused by the pandemic to over $5 trillion.

That amount of spending causes concern among fiscally conservative lawmakers but economists have urged governments and in particular the US to do more.

While presenting his proposal on Thursday Biden expressed why such a large plan was feasible for the American economy saying, “The return on these investments in jobs, racial equity, will prevent long-term economic damage and the benefits will far surpass the cost.” Adding, “A growing number of top economists have shown, even our debt situation will be more stable, not less stable if we seize this moment with vision and purpose.”

What challenges does the Biden’s plan face?

Joe Biden has said that he wants to have bipartisan support which will require negotiations with the Republicans who baulk at the size of the overall plan. He will have to content his party though and some Democrats want to “go big.” With control of both chambers of Congress and the use of “reconciliation” in the Senate, Biden will have an easier path forward to getting any legislation passed.

Any bill based on Biden’s plan will have to be passed in the House first where the Democrats have a slim majority. The progressive wing of the party would like to see more spending, such as recurring direct payments to American families for the duration of the pandemic and beyond. To content the more moderate wing of the Democrats and Republicans Biden’s plan nods at automatic stabilizers which would automatically turn social safety net mechanisms on and off by attaching them to economic conditions thus limiting the long-term cost.

In the Senate, which will be evenly split, how the legislation moves through the chamber will depend on how the committees are structured. Once the Senators-elect from Georgia, Rev. Raphael Warnock and Jon Ossoff, are sworn in Democrats will have to decide how they will work with Republicans. If they come to an agreement on sharing power in the Senate this could affect how fast legislation gets to the floor for a vote.

As long as all the Democrats vote together the American Rescue Plan should get through in one form or another. How long it will take, will depend on the situation the country finds itself in and how much and how long Democrats and Republicans are willing to negotiate.

Where Democrats and Republicans see eye-to-eye

Both Democrats and Republicans have some common ground on some of the measures, one such being additional stimulus checks. The $600 direct payment to eligible adults and children found its way into the $900 billion relief package enacted in December at the last minute, but was seen as insufficient. Lawmakers on both sides of the aisle called for larger payments, with the push getting a boost from President Trump when he threatened to veto the package and called for $2000 payments instead.

The payments are causing a division among Democrats of all places. More progressive members want to see actual $2000 stimulus payments approved in any new stimulus expressed most openly by Representative Alexandria Ocasio-Cortez in the Washington Post. While more moderate Democratic Senator Joe Manchin wants the payments to be targeted for those who need it most. For their part Republican Senator Marco Rubio sent a letter to Biden urging him to back standalone legislation to increase the payments to $2000.