By Todd Lassa

President-elect Biden is ready to test the mettle of his party’s wafer-thin majorities in the House and Senate with his $1.9-trillion coronavirus American Rescue Plan. Key feature of the plan is $1,400 in stimulus payments to complement the $600 mailed out late last year, thus matching the $2,000 President Trump and House Speaker Nancy Pelosi sought. 

In campaigning for Democrats Raphael Warnock and Jon Ossof in their successful January 6 Georgia runoff races for U.S. Senate, Biden suggested that it would take their victories, which give the party a 50-50 count plus Vice President-elect Harris’ tiebreaker, to pass the additional $1,400 stimulus checks. The Trump administration 2017 tax cuts and last March’s $2.2-trillion Coronavirus Aid, Relief and Economic Security (CARES) Act, the largest stimulus package in U.S. history, pushed the federal deficit to record levels. Now Republicans on Capitol Hill are starting to move back to their more traditional model fiscal responsibility and opposing such large deficits. 

After details of The American Rescue Plan (or TARP, which recalls the Targeted Asset Relief Program of the Bush 43 and Obama administrations in response to the 2008 credit crisis) were released, The Wall Street Journal suggested in a Friday morning story that Biden’s proposal, along with a 0.7% drop in December retail sales, were to blame for a decrease in stock market averages. But the story quoted one analyst as suggesting that the market was expecting a larger dollar amount that would better stimulate the economy as vaccinations continued across the country and the economy started opening up. 

Conversely, critics of the CARES Act and the short-term extension passed by Congress just before the New Year say the stimulus funds, when distributed to Americans who need it most, were being saved rather than spent (the objective of the payments is to help generate commerce) as they feared for their future employment. 

In addition to direct payments for individuals, Biden’s TARP proposes an additional $400 per week in unemployment insurance supplement through September, expanded paid leave and increases in the child tax credit. About half the package would be claimed by household costs. 

There is $20-billion for national vaccination centers across the U.S., open to anyone living here regardless of immigration status, with the goal of reopening public shools by May 1, within Biden’s first 100 days. Most of the rest of the remaining $950-billion or so would pay for relief to state and local governments, which have suffered severe tax revenue declines due to small business failures and higher unemployment, and to vaccine distribution, including the national centers. 

“If we invest now boldly, smartly and with unwavering focus on American workers and families, we will strengthen our economy, reduce inequity and put our nation’s long-term finances on the most sustainable course,” Biden said Thursday evening (AP). 

Deaths globally from the coronavirus pandemic topped 2 million on Friday, according to Johns Hopkins University. The U.S. death toll accounts for nearly one-fifth of that, now close to 400,000.