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$1.9 Trillion COVID Relief Plan Opens New Horizons in Fight Against Austerity

Missed opportunities aside, Biden’s relief plan is a win against austerity that will cut child poverty by 40 percent.

House Speaker Nancy Pelosi speaks during a news conference with House Democrats regarding the upcoming vote on the American Rescue Plan, on Capitol Hill in Washington, D.C., on March 9, 2021.

The American Rescue Plan (ARP), the Biden administration’s opening statement, has passed in the House of Representatives by a vote of 220-211. President Biden is expected to sign it into law this week.

Some hail the ARP as the greatest Democratic legislative accomplishment since the New Deal, a progressive policy treasure trove that will fundamentally rewire American political priorities even as it hauls millions out of the abyss of poverty and despair. A number of progressives also rightly decry a slew of missed and mangled opportunities. House Republicans voted “No” en masse in between rants about Dr. Seuss. Don’t blame them; there’s a guy down in Florida trying to take all their money, so they have a lot going on right now, bless their hearts.

Wherever one might fall on the spectrum of opinion regarding this legislation, none can deny that there is a whole lot contained within it. The bill is so large, in fact, that the administration faces a daunting task deploying its many moving parts at an effective pace. The priority, of course, will be the immediate disbursal of direct payments to the public, as well as the rapid deployment of funds meant to attack and curtail the ongoing COVID-19 pandemic.

One of the more remarkable elements of the ARP is its focus on child poverty. The child tax credit — from $3,000 to $3,600 depending on the age of the child — “would lift 4.1 million children above the poverty line, cutting the number of children in poverty by more than 40 percent,” according to the Center on Budget and Policy Priorities. The ARP also raises the federal contribution to Medicaid, an effort to bring the 12 states that refused Medicaid money under the Affordable Care Act into the fold.

As Charles Lane notes in The Washington Post, this represents a massive departure from the budgetary priorities that had settled like cement for decades. “It has been nearly 25 years since President Bill Clinton’s signature domestic policy achievement: the 1996 welfare reform bill based on the idea that poor people must work, or seek work, in return for cash benefits,” writes Lane. “His fellow Democrats are marking the occasion by abandoning that premise of the Clinton reform, albeit by implication.”

Another historic element to the ARP is the significant assistance being provided to historically neglected Black farmers. “Black farmers in America have lost more than 12 million acres of farmland over the past century,” reports Laura Riley for the Post, “mostly since the 1950s, a result of what agricultural experts and advocates for Black farmers say is a combination of systemic racism, biased government policy, and social and business practices that have denied African Americans equitable access to markets.”

The ARP sets aside nearly $10 billion to help offset this long injustice. It is not nearly enough, but even critics believe it is a good beginning. Tracy Lloyd McCurty, executive director of the Black Belt Justice Center, calls it “the most significant piece of legislation with respect to the arc of Black land ownership in this country.”

The ARP provides funding to shore up mass transit systems that have been clobbered by the pandemic slowdown. It enhances subsidies so more lower-income people can actually afford to join the Affordable Care Act. It makes a popular form of student loan debt forgiveness tax-free. It rescues more than a million pension plans, and expands the Earned Income Tax Credit for some 17 million childless workers.

When the ink is dry on the ARP, the U.S. government will have officially spent upwards of $5 trillion in total on COVID rescue and stimulus plans, the largest amount the country has ever spent on any emergency, ever. For example, the U.S. spent what would now equal $4 trillion fighting World War II. “That’s a lot of money to a lot of people,” writes Alayna Treene and Felix Salmon for Axios, “much of it delivered through temporary versions of programs that progressives have been chasing for years.”

The Biden administration is betting on all this stimulus money salting a charge of red hot pepper into the economy just as the weather begins to turn. Concerns about the possibility of inflation from an overheated economy have been batted aside by the White House. The people need this, and they are going to get it.

For all that, the ARP also comes with a notable raft of disappointments. Chief among them is the failure to keep a $15 minimum wage hike in the bill. A combination of Joe Manchin’s “centrist” allies and the parliamentarian’s ruling served to knock the wage hike down, and a number of progressives are understandably nonplussed.

“We remain extremely disappointed that the minimum wage bill was not included. The minimum wage remains essential policy and we must deliver on this issue,” reads a statement from the Congressional Progressive Caucus.

“This is not the promise that we made,” Rep. Ilhan Omar told CNN. “This is not why we are given the opportunity to be in the majority in the Senate and have the White House.”

“This trend is outrageous,” tweeted Rep. Bonnie Watson Coleman. “What are we doing here? I’m frankly disgusted with some of my colleagues and question whether I can support this bill.”

Rep. Alexandria Ocasio-Cortez fumed on Twitter about legislators “having the ganas to go home and ask minimum wage workers to support you after going back on your own documented stance to help crush their biggest chance at a wage hike during their longest drought of wage increases since the law’s very inception.” She ended the tweet with “Sin vergüenza,” which means “without shame.”

Another shameful development was the manner in which senate Democrats somehow managed to negotiate themselves into lowering the direct payments from $2,000 to $1,400, and then limited the number of people who could receive them. This was an own-goal by the “centrist” brigade and Chuck Schumer; the Republicans had no hand in it whatsoever.

“Biden strikes deal with Senate Democrats,” read the Politico headline. “The Senate is literally the only place on earth,” noted Esquire blogger Charles P. Pierce, “where that headline makes sense.”

The negotiation process, steered by Joe Manchin and his cohort of “bipartisan” dragon-chasers, also did damage to the amount of assistance unemployed people can expect from the ARP. The House version contained aid at $400 a week extending to August 29. The Senate version, which the House votes on today, knocked that amount down to $300 a week while extending the benefits to September 6.

Republicans have been surprisingly muted in their criticism of the ARP, due in no small part to its massive popularity. They have, however, managed to bullrush a number of elements out of the bill. Chief among them were two infrastructure items: an expansion of BART, the San Francisco/Oakland subway system, and a bridge between upstate New York and Canada.

These may as well have come with “Pelosi (CA) and Schumer (NY) Want These” marked on the box, and the target was too big to miss. “This is the way Nancy Pelosi gets $140 million for her tunnel of love to Silicon Valley,” said GOP Sen. John Barrasso in an ecstasy of hyperbole. In the end, the bridge and the tunnel were nixed.

Outside of Congress, much of the criticism centered on the tired old “bipartisan” trope. To wit: Because Democrats used the reconciliation process to pass the bill, it was an affront to unity that will menace all future legislation. For example, Charlie Cook argued in the National Journal that Biden may have permanently damaged “his ability to do grand bargains.”

Republicans were not going to vote for this bill even if it mandated the Bible be read out loud all day in every town square and public school. They didn’t vote for this, they won’t vote for anything coming up, and pundits like Cook need to stop doing the time warp. Sam Rayburn has been dead a long, long time. Going forward, it’s about winning first, which would require the abolition of the filibuster, the next big congressional fight on the horizon.

Yeah, it’s a lot to take in.

Speaking for myself, the most striking aspect of the ARP is the fact that, after so many long years, it appears we are finally about to do away with damaging and nonsensical pro-austerity arguments. We have the money to help the people; what we lacked was the proper sense of priorities to do so. With the ARP, that all changes literally overnight.

“If Donald Trump’s regressive tax code laid bare the bad faith of the Republican Party’s deficit hawks,” writes Miles Kampf-Lassin for In These Times, “Democrats now appear ready to use this kind of spending as a mechanism to subsidize working people. This stunning shift suggests Democrats have learned from their past failures and are now willing to exercise the full power of the U.S. government.”

Furthermore, this kind of necessary spending does more than lift up the people and excite the economy. According to Sen. Sherrod Brown, it could help to actively rescue democracy itself from the deliberate infliction of desperation and suffering:

We save democracy for today, and for the next century, by making government work; by showing people in the most meaningful way that their votes matter, and that their votes count. And right now, that means a wartime-level mobilization to get Americans vaccinated and get our country through this pandemic. The best chance for our democracy lies not with the vain hope that Republican leaders will grow spines, but with Democrats’ ability to show Americans that they do not have to settle for a government that’s set up to fail.

We learn from history. The far-right elite grows its movement best in the fertile soil of economic inequality. Phony populist leaders eagerly exploit people’s anxieties; once in office, they use that power for corporate tax cuts, to amass more wealth for themselves. Then, when government fails everyone else — when the middle class shrinks, when wages stagnate, when corporate profits soar — people lose faith in democracy itself.

There is much left undone by the ARP, and much left to do for the people. As far as legislative opening salvos go, however, it is pretty extraordinary… and lest we forget that, but for a pair of hard-earned yet nigh-on miraculous Senate victories in Georgia, there would be a bag of dust where this bill currently stands. For all its flaws, it remains a major achievement, and one hell of a good start.

This article has been updated.

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