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Stimulus Watch: Reconciliation Rules

Joe Biden, stimulus, Build Back Better, infrastructure, infrastructure watch

Where’s the stimulus? Short answer: It’s still in Congress. Longer answer: The House is poised to pass its version of the American Rescue Plan by the end of the month, and the Senate may be ready to get the Rescue Plan to President Joe Biden’s desk before enhanced unemployment insurance expires on March 12.

However, there are a few catches. As always, we got you covered.

First off, a summary of what’s changed and what has stayed the same since the American Rescue Plan moved to Congress
Joe Biden, economy, stimulus
Photo by Andrew Davey

As we briefly noted last week, President Joe Biden’s American Rescue Plan has churned its way through Congress to the point where it’s now on the brink of passing the House. And so far, most of Biden’s core demands remain intact: $1,400+ “stimulus checks” for Americans who reported $75,000 or less in 2019 or 2020 taxable income, almost $130 billion for K-12 schools and nearly $40 billion for colleges and universities to secure PPE and make structural upgrades needed to ensure safe reopening of in-person classes, $350 billion in flexible aid for state and local governments (including Native American tribal governments and U.S. territories), and just over $34 billion in housing aid (including $5 billion for state and local governments to provide shelter for people experiencing homelessness).

However, House Democrats have made a few changes to Biden’s original stimulus plan. One such change is with unemployment insurance: The Rescue Plan still renews the COVID-19 era unemployment programs and boosts the federal weekly enhancement from the current $300 to $400, but now it’s slated to end in late August instead of September. With Biden promising to have COVID-19 vaccines widely available to the general public by the end of summer, with even the most optimistic economic forecasts showing a longer timeline for the U.S. to return to full employment, and with Congress’ own timeline including their traditional August recess and the September 30 budget deadline, it’s a gamble for House Democrats to chop a month off the Rescue Plan’s enhanced unemployment benefit calendar.

Joe Biden, Democratic National Convention
Photo by Andrew Davey

Yet while the House is taking away some unemployment aid, it’s adding more in the form of an enhanced child tax credit that goes up to $3,600 for each child under age 6 and $3,000 for each child aged 6-17, as well as a $900+ boost in the Earned Income Tax Credit (EITC) alongside expanded EITC eligibility to $21,000 in annual income. House Democrats’ stimulus bill not only includes an 85% COBRA health insurance premium reduction for select unemployed workers, which is close to the 100% coverage that Biden and Rep. Steven Horsford (D-North Las Vegas) had previously proposed, but also a new 5% FMAP boost for states that participate in the Affordable Care Act’s Medicaid expansion and a suite of enhanced premium subsidies for Affordable Care Act insurance exchange consumers for two years along the lines of what Biden and House Democrats endorsed last year.

Returning to the vaccine front, House Democrats have made some tweaks to Biden’s original proposal health response and vaccine distribution plan, but those tweaks include additional funds for testing and contract tracing, as well as $7.6 billion for a community health center program that builds upon the Biden administration’s recently launched community vaccination center program. The bill also includes $7.6 billion to expand broadband internet availability, a 15% increase in SNAP benefits to go through September, and over $47 billion in small business aid that includes $7 billion for the PPP program that the Biden administration is redesigning to fix the corruption and all-around inequity that mounted under former President Donald Trump’s watch.

So why is this stimulus bill still pending? Let’s examine this fight over the minimum wage, and the inevitable fight over the Senate filibuster.
Kamala Harris, Joe Biden
Photo by Andrew Davey

Thus far, Joe Biden’s presidency has marked a major departure from the recent history of Democratic presidents (Jimmy Carter, Bill Clinton, and Barack Obama) in neglecting their party’s progressive base while trying to build consensus with a Republican Party that had already begun to radicalize. Yet with that being said, there’s still one huge sticking point in the Rescue Plan where Biden has begun to distance himself from progressives: the minimum wage, and whether or not top Democrats will actually fight to make it a living wage. 

While the vast majority of Democrats appear to be on the same page in supporting a $15 per hour minimum wage, Biden seems to be giving Senate Democratic leaders permission to remove the $15 minimum wage provision from the Rescue Plan once the House bill reaches their chamber, versus House and Senate progressives who want Democratic leaders to continue fighting for $15 right here and right now. Though multiple Democrats have already introduced the stand-alone Raise the Wage Act (H.R. 603 in the House, and S.53 in the Senate), both bills look unlikely to reach Biden’s desk any time soon so long as the Senate’s filibuster rules remain as-is. 

stimulus, coup, Parler, terrorism, Washington D.C.
Photo by Andrew Davey

The American Rescue Plan is marked as a reconciliation bill in order for Democrats to bypass the filibuster, and Democratic leaders only get the opportunity to take up one more reconciliation bill this year and one reconciliation bill next year. And because the reconciliation process was originally designed with the federal budget in mind, the Congressional Budget Office (CBO) and the Senate parliamentarian wield enormous power over what is and what is not allowed under Congressional reconciliation rules. 

Even though many Americans might consider this a “snail’s pace” for passing the Rescue Plan, this is actually considered Congress’ fast track. If this were “regular order”, the Rescue Plan would be at risk of being filibustered to legislative death, and progressives fear that is exactly what will happen to the $15 minimum wage if it’s excluded from the final stimulus package while Senate Democrats continue to sidestep any filibuster reform that could allow Congress to pass more legislation without having to resort to special legislative maneuvers that are subject to strict budget rules and can only be used once or twice a year.

If a critical mass of Republicans in Congress continue to refuse Democrats’ offers to “work together”, Democrats will have to figure out how to get their work done regardless.
Nevada Caucus, stimulus
Photo by Andrew Davey

During a press call on January 19, U.S. Senator Catherine Cortez Masto (D) sensed some silver lining in the post-January 6 fallout in the form of a growing chorus of her Republican colleagues wanting to leave the stench of Donald Trump’s presidency behind them. Or as Cortez Masto noted, “Many of us have actually moved bills through committee in a bipartisan way, but they never moved on the floor because [Senate Republican Leader Mitch McConnell (R-Kentucky)] wouldn’t move them.” She also added, “It’s important to show everyone that we’re working together and we want to find common ground. We have a Senate that is 50-50. We have to work together.”

Since then, that push for bipartisanship has produced limited results. While a few of Biden’s cabinet nominees were confirmed on lopsided votes of approval, the increasingly likely failure to confirm Neera Tanden as Director of the Office of Management and Budget (OMB) at least portends a more grueling Senate confirmation process for the rest of Biden’s cabinet picks, including California Attorney General Xavier Becerra (D) for Health and Human Services and Rep. Deb Haaland (D-New Mexico) for the Interior Department. If Democrats can’t even count on their Republican colleagues to help them give Biden a full cabinet to work with, why should they believe they can score any kind of bipartisan deal on this stimulus package, let alone legislation on policy matters like voting rights, criminal justice reform, and LGBTQ+ civil rights that probably stands zero chance of passing under reconciliation?

Donald Trump, COVID-19
Photo by Andrew Davey

When Donald Trump infamously uttered, “I alone can fix it,” at the Republican National Convention in 2016, he not only signaled ahead of time his intent to pursue a less democratic and more authoritarian government, but he also lied to Americans about how the U.S. government is supposed to work. Case in point: Trump’s attempt to circumvent Congress on COVID-19 relief last August resulted in a mere $900 worth of unemployment aid over two months after the original CARES Act unemployment income enhancement expired. Because Trump chose to raid FEMA rather than attempt any real good faith negotiations with Congress, he subjected state governments to a new layer of federal bureaucracy while forcing out-of-work Americans to wait longer for less assistance.

And yet, despite this and Trump’s overall refusal to take COVID-19 seriously, he scored more votes than any prior Republican presidential nominee and came within 43,000 votes (in three states) of winning a second term. There’s just no sugarcoating this: Millions of voters were so disillusioned with the troubled state of our economy and our government that they were willing to give Trump more time to fulfill his promise to “fix it”. Fortunately for Democrats, Trump’s gambit failed. Now they need to finish their work on this stimulus legislation, and they’re going to need to figure out how to deliver solutions that go beyond the narrow scope of reconciliation rules.

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