At the press briefing on Tuesday, White House press secretary Jen Psaki gave the example of a couple in Scranton, Pa., whose combined income as a nurse and a teacher is $120,000, as the type of family that Biden thinks should get the additional $1,400. The rationale for this is not self-evident. A couple with such an income is likely not, as Psaki described, among the “1 in 7 Americans” who have trouble putting food on the table. In fact, a household earning $120,000 is doing better than 73 percent of Americans. That does not seem to be where the money is needed, nor, according to Rattner’s analysis, is it an effective way of putting money into the economy.
The good news is that the White House may be open to a more targeted approach. The Post reports: “Sen. Shelley Moore Capito (R-W.Va.), a member of the bipartisan group, also said in an interview that Biden demonstrated willingness to negotiate with Republicans over more narrowly targeting the income threshold for the stimulus payments." This doesn’t mean that either party has moved toward a deal, but it does mean that further negotiations are possible and that amendments could be offered in the Senate to narrow the payments.
The Post reports, “Biden’s plan would provide stimulus payments to approximately 95 percent of the country, while the Republican plan, lowering the threshold to those making under $50,000 a year, would provide payments to about 70 percent of the country.” Given that, it is hard to argue that the Republican counteroffer would hurt those in need. The difference in how much each party is willing to put into personal checks ($220 billion vs. $465 billion) is not nearly enough to bridge the gap in total spending for each plan. But if Republicans agreed to put that difference of $245 billion toward aid for state and local governments, there might be a true negotiation.
Likewise, all of the 10 Republicans who went to the White House have significant rural constituencies. If Biden agreed to repurpose some of the money in his package for rural needs (e.g., expanded broadband Internet, rural hospital funding), Republicans might look favorably on spending hundreds of billions more. (A recent study affirms that “the effects of the COVID-19 pandemic on rural populations have been severe, with significant negative impacts on unemployment, overall life satisfaction, mental health, and economic outlook.”)
The gap between the two sides would still be enormous, but once there is progress in one area, there might be room to maneuver on other items. Say, for example, that Biden took out the $15 minimum wage and the enhanced child tax credit in exchange for a Republican agreement not to filibuster a later economic package with those items (they could still vote against it). A rescue package might be passed relatively soon, setting the stage for the next round of discussions on Biden’s recovery plan that might include everything from the $15 minimum wage and child tax credit to an infrastructure bill.
While congressional Democrats are understandably eager to get this done as fast as possible, the White House surely understands that this is Round 1 in a four-year relationship with Republicans. If the Biden team can reach agreement with some creative dealmaking, it should seize the moment — especially if Republicans have made at least one significant and valid contribution to the debate.