At this moment, the Senate is debating the American Rescue Plan, the Biden administration’s $1.9 trillion stimulus proposal currently enjoying deep and wide bipartisan popularity across the country. Consequently, of course, not a single Republican senator will vote for it.
Why is this?
The Federal Reserve, not what you’d call a radically socialist organization, the Treasury Department, and nearly all reputable economists back the plan. A highly credible Morning Consult / Politico National Tracking Poll, with a 2% margin of error, conducted two weeks ago from 19 through 22 February, reported 66% of all registered voters considered stimulating the economy a “Top Priority,” and 76% of registered voters support the $1.9 trillion plan. And the icing on the cake — 60% of died-in-the-wool Republicans support it.*
Additionally, 63% of small business owners support the $1.9 trillion stimulus plan, according to the Q1 2021 CNBC|SurveyMonkey Small Business Survey, including 46% of Republican entrepreneurs.
With that kind of support, what possible reasons could congressional Republicans have for doing “everything we can to fight it,” as Mitch McConnell proclaimed this week?
There are a few reasons, and, is so often the case in political argument, most of them are nothing more than sound bites.
For example, Republicans claim the proposal is “replete” with giveaways having nothing to do with the pandemic. They object to the plan’s $350 billion aimed at helping cities and states, most notably the $10 billion (less than 1% of the entire plan) to shore up pension plans or lower future taxes.
Let’s look a little more closely at Republican opposition to city and state aid. No municipality — red or blue — has designed its fiscal affairs to withstand a simultaneous public-health crisis and economic lockdown. Unlike the federal government, states and cities cannot print or borrow money at near-zero interest rates. Most are constitutionally required to balance their budgets. When a pandemic annihilates their sales and income tax revenues — while dramatically increasing their Medicaid and health-care outlays — states have little choice but to lay off public-sector workers, cut social services, and/or raise taxes. All of those measures would make our current economic woes worse. There is no economic theory to support a stimulus strategy that combines massive stimulus at the federal level and simultaneous austerity at every lower level of government. If you believe that governments can improve economic welfare by filling in shortfalls in private incomes and consumer demand, then forcing state governments to reduce employment and spending is economically indefensible.
In the face of this, there is no coherent theoretical argument behind the GOP’s opposition to fiscal aid for states. But that hasn’t stopped it from trying. Unfortunately, every strata of our nation’s economy, from business, small and large, to the public sector’s 20.2 million federal , state, county and city employees, to nuclear families and single Moms, to you and me — all are in need.
On the other hand, I’d be interested in knowing just how much economic need our elected representatives and senators are experiencing at this moment. Would you?
*To be precise, this is the exact wording of the question in the Tracking Poll. It can be found on page 229 of the 368 page report: “Would you support or oppose a $1.9 trillion coronavirus relief package that provides up to $1,400 in direct payments to Americans making less than $75,000 a year, $350 billion in emergency funding for state and local governments, funding to support K-12 and higher education to re-open, and extends increased unemployment benefits until September 2021?”
Tags: reports
