The primarily legislative activity on Capitol Hill has been the continuing pursuit of the $1.9 trillion Covid relief bill (aka American Rescue Plan). Long sessions, numerous amendments voted on, and gradually progress toward the goal. First the bill was passed by House Democrats.
Given that only about 9% of the funds in the bill were directly related to combatting Covid, however, it was hard to imagine why such a huge spending bill was called for. Didn’t the administration realize, mused the Wall Street Journal that the economy was already poised for a robust recovery and passing out large amounts of additional relief was more likely to slow things down than accelerate the process. Oh, no, the labor market is recovering, WSJ, 3/5/21.
The February report overall is good news, except in Washington where the timing is awkward. Democrats are rushing into a law a gigantic spending bill under the guise of Covid-19 relief. They need to pass it soon or the political momentum may fade as the public learns more about the non-Covid welfare and political spending it includes. The bill’s $350 billion bailout for states and localities that are gaining in tax revenue should be especially embarrassing, if politicians were capable of embarrassment. Economists differ as to the job creation consequences of the bill. Thus conservative economists Fred Moore and Casey Mulligan concluded that some 5-7 million jobs would be lost over the next six months as a result of federal unemployment pay and Covid relief payments, motivating people to stay home and look after their families. Grant Atkinson, westernjournal.com, 3/2/21.
On the other hand, Biden says job growth is too slow as he pushes Covid spending bill, Rob Crilly, Washington Examiner, 3/5/21. Finally, on Saturday, March 6, the Senate passed the $1.9T relief bill, albeit with changes that were said to infuriate House Democrats, Susan Ferrechio, Washington Examiner, 3/6/21. First, the $15 minimum wage was dropped, accepting the ruling of the Senate parliamentarian that this feature would be blocked by the Byrd Rule. Second, federal unemployment benefits were cut from $400 per week to $300 per week as suggested by Sen. Joe Manchin of West Virginia. There were various other tweaks and adjustments, as well, but no doubt Democrats will be able to reconcile the two bills in the course of the coming week.