By most any measure, $1.9 trillion is a lot of chaff to pass out. Americans perhaps don’t realize that most of the blowout is to fund a list of longtime Democratic spending priorities.
A Progressive Blowout for the Ages
The WSJ calls it “a progressive blowout for the ages that does little for the economy but will finance Democratic interest groups for years.” In order to separate the COVID from the chaff, the WSJ digs into the various House committee bills so readers can know what is in the bill before it is passed:
- $75 billion for vaccinations, treatments, testing and medical supplies
- $19 billion for “public health,” primarily for state health departments and community health centers
- $6 billion to the Indian Health Service
- $4 billion for mental health.
- $7.2 billion more for the Paycheck Protection Program
- $15 billion for economic injury disaster loans
- $26 billion for restaurants, bars and live venues
- $15 billion in payroll support for airlines. The recipients of this taxpayer money will at least be required to prove economic harm, and in some cases repay loans.
- $413 billion in checks Democrats intend to send to households far and wide, at $1,400 per man, woman and dependent, that begins phasing out at $75,000 of individual income.
The Congressional Budget Office says the bill’s unemployment provisions will increase deficits by $246 billion, and that its $400 a week in federal “enhanced” unemployment benefits through August “could increase the unemployment rate as well as decrease labor force participation.” So much for economic stimulus.
All told, this generous definition of Covid-related provisions tallies some $825 billion. The rest of the bill—more than $1 trillion—is a combination of bailouts for Democratic constituencies, expansions of progressive programs, pork, and unrelated policy changes.
- $86 billion to rescue 185 or so multiemployer pension plans insured by the Pension Benefit Guaranty Corp. Managed jointly by employer sponsors and unions, these plans are chronically underfunded due to lax federal standards and accounting rules.
- $129 billion, for elementary and secondary schools, whether they reopen for classroom learning or not.
- $40 billion for higher education.
The CBO notes that since Congress already provided some $113 billion for schools—and as “most of those funds remain to be spent”—it expects that 95% of this new money will be spent from 2022 through 2028. That is, when the pandemic is over.
Favored Democratic Programs
- $35 billion to pump up subsidies to defray ObamaCare premiums. The bill eliminates the existing income cap (400% of the poverty level) on who qualifies for subsidies, and lowers the maximum amount participants are expected to contribute to about 8.5% of their income, down from 10%.
- $15 billion to provide a temporary five percentage-point increase in the federal Medicaid match to states that expand eligibility to lower-income adults. This is bait for the dozen or so states that have resisted ObamaCare’s Medicaid expansion, which enrolls working age, childless adults above the poverty line. The political goal overall is to chip away at private coverage on the way to Medicare for All.
- $39 billion for child care
- $30 billion for public transit agencies
- $19 billion in rental assistance
- $10 billion in mortgage help
- $4.5 billion for the Low Income Home Energy Assistance program
- $3.5 billion for the program formerly known as food stamps
- $1 billion for Head Start
- $1.5 billion for Amtrak
- $50 billion for the Federal Emergency Management Agency
- $4 billion to pay off loans of “socially disadvantaged” farmers and ranchers
- nearly $1 billion in world food assistance
Congressional Members’ Pet Projects
- $1.5 million for the Seaway International Bridge, which connects New York to Canada and is a priority for New York Sen. Chuck Schumer.
- $500 million for, as the CBO puts it, “grants to fund activities related to the arts, humanities, libraries and museums, and Native American language preservation.”
Meanwhile the Cares Act (2020) distributed money mainly by state population, according to the WSJ.
Much of the $220 billion for states in the new bill will be allocated based on average unemployment over the three-month period ending in December.
Andrew Cuomo’s New York (8.2% unemployment in December) and Gavin Newsom’s California (9%) get rewarded for crushing their businesses, while Kristi Noem’s South Dakota (3%) is penalized for staying open. These windfalls come with few strings attached.