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A potential Biden stimulus plan could cost nearly $1.9 trillion. The Biden Administration seems intent on getting a third stimulus plan to Congress, despite some skepticism by some on the need of a third plan.
Only 43% of this plan’s budget, so far known, is targeted to address the COVID-19 pandemic. The rest of the money includes transfers to programs supported by Democrats or transfers to state programs that have already received help from the other two stimulus packages.
The Biden stimulus plan includes $1,400 checks to all Americans making less than $75,000 a year. The administration will also allocate $246 billion for additional transfers to unemployment and severance insurance, which would expand individual unemployment benefits with a $400 weekly check.
For direct pandemic care, the plan includes $75 billion for vaccination programs, treatment, testing, and the purchase of medical supplies. There is also another $19 billion that will go to state health departments and community health centers. The federal government will also make transfers of $6 billion to the Indian Health Service and $4 billion for mental health care.
The package includes a budget for business assistance that includes $26 billion in assistance for restaurants, bars and theaters; $15 billion for airline payroll; another $15 billion to address pandemic incidents; and, finally, $7.2 billion in payroll assistance for small businesses.
By The Wall Street Journal‘s count, Biden’s $1.9 trillion stimulus plan will allocate $825 billion to address the pandemic, less than half of the budget being debated on Capitol Hill.
Biden stimulus plan earmarks billions for non-pandemic programs
The package allocates more money to transfer to the states than all transfers to address the pandemic, as it allocates $350 billion to them despite the fact that state collections have recovered after the March 2020 drop. Democrats also changed the allocation formula to ensure more taxpayer money reaches their states because they were the ones who imposed the greatest restrictions on mobility.
Compared to the Trump CARES Act, which allocated transfers based on state population size, Biden’s stimulus transfers will be allocated based on persistent unemployment rate. Thus, the states that destroyed the most jobs through the excessive imposition of lockdowns, such as California and New York, will receive a larger portion of the stimulus.
The budget will include $129 billion for schools that will be distributed regardless of whether classrooms are open or not. Universities were also able to secure $40 billion. However, in the past stimulus Congress had already drawn down $113 billion, but most of these funds have yet to be used.
Democrats also took advantage of the president’s stimulus to shift more funds to their programs, such as subsidies to pay for defrauded Obamacare premiums. The stimulus plan proposal also includes eliminating the income limit (400% above the federal poverty line) for eligibility, while lowering the maximum income contribution from 10% to 8.5%.
Finally, the Biden stimulus plan includes $39 billion for early childhood care, $30 billion for transit agencies, $19 billion for rental assistance, $10 billion for mortgage payments, $4.5 billion for the Low Income Home Energy Assistance program, $3.5 billion for food stamps, and $1.5 billion for the rail network.
Whether analysts or Republicans-alike endorse the need for a third stimulus or not, the Biden Administration seems determined to launch a $1.9 trillion plan that will further deepen the national deficit, putting the nation into debt for programs that have little or no bearing on addressing the pandemic and much to do with the Democratic Party’s political agenda.
Economist, writer and liberal. With a focus on finance, the war on drugs, history, and geopolitics // Economista, escritor y liberal. Con enfoque en finanzas, guerra contra las drogas, historia y geopolítica