Stimulus Update: 3 Reasons Biden Is Primed to Fight for His Stimulus Package
by Dana George | Feb. 26, 2021
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There are at least three reasons President Biden will likely go to the mat for his stimulus plan.
President Joe Biden's $1.9 trillion stimulus proposal is undeniably huge and includes a long list of goals. The plan earmarks money to increase the rollout of COVID-19 vaccines, get schools back open, expand unemployment benefits set to expire on March 15, and send another round of direct stimulus payments to most Americans. While Biden has said he is willing to compromise with Republicans pushing for a smaller package, he is likely to fight to keep much of it intact. Here are three reasons why:
1. Lessons from the past
The current president was once Vice President Joe Biden, part of the Obama administration. When he and President Barack Obama took office in January of 2009, they were immediately faced with the task of bringing the country out of the Great Recession. Then, like today, some members of Congress were adamantly opposed to the $1.2 trillion stimulus package proposed by the administration.
What finally passed through Congress in 2009 was a $787 billion stimulus bill, far less than what many economists said at the time was needed. From the distance of 12 years, most economists now agree that the stimulus package's reduced size prolonged the Great Recession. That may be why, according to The New York Times, more than 200 members of the Obama administration recently signed an open letter urging Congress not to cut Biden's stimulus bill.
The first reason Biden is unlikely to bend too much on a stimulus package estimated to cost $1.9 trillion is that he has seen what happens when too little money is poured into an ailing economy. While the 2009 stimulus package helped, it didn't go far enough.
2. Support from economic leaders
While economists are split on whether a $1.9 trillion stimulus plan is too much or too little, some prominent economists, like Paul Krugman, say the danger is not doing enough. According to Krugman, if the plan turns out to be too large, it can be reined back in. If it is too small, there's no second bite at the apple. The administration cannot realistically come back and ask for more.
In addition, more than 150 senior executives from across major U.S. industries signed a letter in support of the president's relief package, according to CNN. Execs from investment firms like Goldman Sachs, technology companies like Intel, and airlines like United, sent the letter to congressional leaders. It read in part, "Congress should act swiftly and on a bipartisan basis to authorize a stimulus and relief package along the lines of the Biden-Harris administration's proposed American Rescue Plan."
With some of the biggest names in business and economics saying that the Biden plan is precisely what the country needs to get back on its feet, Biden is unlikely to settle for much less than $1.9 trillion.
3. Support from the American public
The polling organization Navigator Research recently released a poll conducted among registered voters between Feb. 11 and Feb. 15. With a margin of error of 3%, the poll found that 73% of all Americans support Biden's stimulus proposal, including 53% of Republicans.
Given the highly partisan atmosphere in which we currently exist, the fact that a majority of registered voters agree on any one issue is quite an achievement. What's more, a Quinnipiac University poll from the first week of February found that 64% of Republican voters support Biden's proposal of $1,400 direct payments into bank accounts.
Support from across the spectrum for the president's plan will not be lost on the Biden administration. No matter how much the GOP complains about a rising deficit or encourages people to pull themselves up by the bootstraps, it looks like Biden has plenty of reason to stand his ground on his stimulus proposal.
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About the Author
Dana has been writing about personal finance for more than 20 years, specializing in loans, debt management, investments, and business.
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