Last week, President Biden announced the outline of what he called the American Rescue Plan, a $1.9 trillion package of measures to speed up the response to COVID-19 and accelerate the pace of economic recovery.
The package includes $1,400 stimulus checks for most adults, an extension of supplemental federal unemployment benefits (now $300 per week) at $400 per week from their current expiration in March through September, a fully refundable tax credit of $3,000 per child ($3,600 for children under six), $350 billion in aid to state and local governments, $170 billion in aid to K-12 schools and higher education, and many other provisions.
The American Rescue Plan has not yet been introduced in Congress as a legislative proposal. The administration’s current thinking is that a bill incorporating its provisions could be considered by House committees, and then on the House floor, over the next month. The Democratic-majority House will almost certainly pass a bill very similar to Biden’s plan by late February.
By that time, the Senate will likely be winding up Donald Trump’s second impeachment trial, scheduled to begin on Feb. 9. The White House and Democratic congressional leaders will then have to make a crucial decision about how to proceed with the American Rescue Plan in the Senate.
The Senate has not yet organized itself for the 117th Congress, because Majority Leader Chuck Schumer and Minority Leader Mitch McConnell cannot agree on a package of Senate rules for the upcoming session. McConnell wants those rules to include provisions protecting the legislative filibuster, the requirement that 60 votes are needed to pass most bills. Schumer is unwilling to do so, not necessarily because he wants to eliminate the filibuster now, but because he wants to keep in reserve the possibility of its elimination if Republican obstruction of Biden’s program prevents the Senate from acting on most of the President’s proposals.
Initial discussions between White House staff and Senators from both parties indicate that 60 votes are unlikely to be found for the American Rescue Plan as its now stands. Few if any Republicans in the evenly-divided Senate will support the President’s entire package. The “red lines” for many Republican senators are the size of and eligibility for the stimulus checks, as well as the $520 billion in aid for state and local governments and school districts. To pass a bill in the Senate through the regular order, in other words, to overcome a filibuster, that bill would likely be limited to another round of stimulus checks of less than $1,000 per adult, an extension of federal unemployment benefits at the current $300 per week, some vaccine aid, and little else.
While most bills now require 60 votes to pass the Senate, there is an exception. A procedure called reconciliation may be used to pass measures related to taxing and spending by a simple majority. Reconciliation was used to pass the Affordable Care Act in the Senate in 2010, and again to pass the Trump tax cuts in 2017.
Sen. Bernie Sanders, who chairs the Senate Budget Committee, which has jurisdiction over reconciliation bills, says President Biden and his Democratic colleagues should not wait months to work out a deal with Senate Republicans. Sanders has said that if it is apparent, by the end of February, that only a watered-down bill can pass the Senate, reconciliation should be used to pass, and send to the President, a bill much like Biden’s initial proposal, perhaps slightly modified by the House.
Sanders notes that most economists — whether in academia, business, the Federal Reserve or Wall Street — say the risk of doing too little to stimulate the economy is much greater than the risk of doing too much. The consensus of economists is that the economy should “run hot” in 2021 in order to put recovery on a sustainable path for 2022 and beyond.
Eric L. Davis is professor emeritus of political science at Middlebury College.