House Republicans are objecting to the $1.9 trillion measure being pushed by President Biden and Democrats in Congress to deal with the coronavirus pandemic and its economic fallout. As part of the attack, the GOP staff on the House Budget Committee has distributed a pie chart that asserts only a small portion of the bill actually deals with combating the virus.
In his remarks, Smith listed a series of objections to the bill. Let’s take a tour through them and offer an assessment. Some of the claims have to do with arcane budget issues, while others reflect a more philosophical dispute. As this is a reader guide, we’re not going to issue a Pinocchio rating, but readers should be aware that several of these points are off-base or stretched.
“If this package was clearly about crushing the virus, then why is less than 9 percent of all total spending actually used to put shots in people’s arms?”
The GOP cites Biden himself for the $160 billion that this figure represents: “That’s why the American Rescue Plan puts 160 million — billion dollars into more testing and tracing, manufacturing and distribution, and setting up vaccination sites — everything that’s needed to get vaccines into people’s arms, which is the most difficult logistical effort the United States has undertaken in peace time,” Biden said Feb. 19, while touring a Pfizer vaccine plant.
If you want to narrowly define the problem to vaccines, the GOP may be underselling its talking point. According to an analysis by the nonpartisan Committee for a Responsible Federal Budget (CRFB), only about $17 billion, or less than 1 percent, is devoted to vaccine-related activities and programs.
Another $110 billion is aimed at coronavirus containment, such as $51 billion for testing and tracing. Combined, that adds up to $127 billion, not $160 billion. Marc Goldwein, senior vice president of the CRFB, says $160 billion represents an estimate for all spending on public health — including money to replenish the Federal Emergency Management Agency disaster fund — but he believes the total shrank when the House bill was crafted.
But of course the pandemic crisis is not just about vaccines or even containing the coronavirus, but a broader economic crisis spawned by mass unemployment and shuttered businesses. A group of 10 Republican senators acknowledged that when they countered Biden’s plan with their own $600 billion proposal, which included $1,000 checks for Americans. So one could reasonably object that this knock against the bill ignores the rest of the problem.
“If this package was clearly about making sure that schools opened, why is it that less than 5 percent of all spending for schools will only be spent this year?”
This talking point is based on a budgetary quirk — the Congressional Budget Office originally said that in the fiscal year that ends this September, only about $6.4 billion in outlays would be spent out of the total budget authority of nearly $129 billion. (The CBO estimates the impact of bills over 10 years.) This new money would be on top of $71 billion already allocated to schools in two previous bills, much of which is unspent, according to the CRFB. “Many schools already had sufficient money for this year and next,” Goldwein said.
Democrats have amended the bill to address this issue and possibly speed the payout. The CBO offered its own caveat to the estimate: “CBO’s estimates of the rate at which federal agencies, states, local education agencies and other entities would spend those new funds are subject to considerable uncertainty, as is the question of whether those entities could spend the new funds within the allotted time.”
In a Feb. 23 letter to House leaders, a group of education associations objected to this claim. “We are aware of the inaccurate notion that schools are not in need of additional funding because of the reported ‘spend’ rate of federal funding to date,” the letter said. “In conversations with our respective memberships, they report that while the ‘spend rate’ may seem quite low to those unfamiliar with state and district school financial procedures and requirements, they have budgeted for every dollar they are scheduled to receive from the COVID relief bills and are still anticipating more significant costs they will be unable to meet without additional federal funds.”
“If this package was about creating more jobs, why is it that this package spends more than 25 percent, according to the Congressional Budget Office, on items that kill millions of jobs?”
This claim especially caught our attention. The House GOP added together four elements that amount to $471 billion, or 25 percent of the total: $61 billion for the expansion of Medicaid and Affordable Care Act insurance subsidies; $54 billion for the minimum-wage increase; $110 billion for making the Child Tax Credit fully refundable; and $246 billion for the unemployment insurance expansion.
But only one of the elements — the proposal to gradually raise the minimum wage to $15 an hour — resulted in a CBO estimate that jobs would be lost. The CBO said it would mean 1.4 million workers, just under 1 percent, would lose their jobs. (The CBO also found 17 million workers, or 10 percent of the projected labor force, would get higher pay.)
The other provisions resulted in CBO estimates that fewer hours would be worked in the economy. But that’s not the same thing as lost jobs. Regular readers may recall that in 2014 we wrote an article based on the same CBO report that the House GOP cites as evidence. The headline was: “No, CBO did not say Obamacare will kill 2 million jobs.”
“The CBO’s estimate is mostly the result of an analysis of the impact of the law on the supply of labor. That means how many people choose to participate in the workforce,” we wrote. “If someone says they decided to leave their job for personal reasons, most people would not say they ‘lost’ their jobs. They simply decided not to work.”
In awarding three Pinocchios to this claim, we noted that the CBO “in its sober fashion, virtually screams that this is not about jobs.” Yet here it is, seven years later, and the same CBO report is being misused in the same fashion.
Bottom line: The GOP can only cite the CBO for policies that would result in 1.4 million jobs supposedly being lost, not “millions.” That policy, the minimum-wage hike, is only about three percent of the bill’s cost, not 25 percent.
(Note: Goldwein pointed out that the CBO score of the bill does indicate the unemployment insurance provision would increase the unemployment rate.)
“If this package was not a progressive wish list, why does it spend hundreds of millions of dollars on pet projects in New York City and in San Francisco like bridges and trailways?”
House Speaker Nancy Pelosi (D-Calif.) represents San Francisco and Senate Majority Leader Charles E. Schumer is from New York. So it’s no mystery why their cities and states are being name-checked here. The GOP is referring to two provisions.
- “Section 7004 — Great Lakes St. Lawrence Seaway Development Corporation Operations and Maintenance” calls for $1.5 million to conduct, “the operations, maintenance, and capital infrastructure activities of the Seaway International Bridge.”
- “Section 7006 — Federal Transit Administration Grants” sets aside over a billion dollars for Capital Investment Grants (CIG). Within this money, it is estimated that $112.5 million would go to the Bay Area Rapid Transit District (BART) and Silicon Valley Phase II Extension Project.
The suggestion is that this is pork. But Democrats argue the mass-transit funding is designed to offset revenue shortfalls so that transit systems can continue operating. Transit agencies have also had trouble covering all of their share of costs for capital projects. “The New York State bridge is a vital crossing between the United States and Canada that has seen toll revenues plummet as a result of pandemic travel restrictions,” one Democratic aide said. “Without additional funds, the bridge would likely close.”
(According to Punchbowl News, the request to provide $1.5 million to the bridge was made in the spring of 2020, when the Transportation Department was headed by Elaine Chao, the wife of Republican Senate Minority Leader Mitch McConnell of Kentucky.)
“If this package was truly about helping all Americans, why did they change the bipartisan budget formula used in all the other covid packages to reward the blue-state governors, one governor that’s being recalled and another governor that hid disclosure of how many deaths that were in nursing homes?”
Republicans say the new formula now takes into account population and unemployment, whereas before it was based only on population. As a result, California will get $5 billion more and New York will get $2 billion more than under the old formula, Republicans say.
It’s no mystery why the formula changed — Democrats now control both chambers of Congress. When Republicans muscled through a tax bill in 2017 when they controlled both chambers, the law was written to eliminate the deductibility of state and local taxes, which disproportionally hurt residents in blue states.
It was ever thus.
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