(CBS Detroit) — Joe Biden, the president-elect, will have a full to-do list when he takes office on January 20. Wrangling the COVID-19 pandemic and rebuilding the economy are likely right at the top. His transition team is already hard at work putting plans in place.
Earlier this week, the Biden-Harris transition team announced the creation of the Transition COVID-19 Advisory Board, a group of public health experts to consult with Biden and Vice President-elect Kamala Harris. As Biden says, “dealing with the coronavirus pandemic is one of the most important battles our administration will face, and I will be informed by science and by experts.”
Containing the virus is key to rebuilding the economy. And the incoming Biden administration is already laying the groundwork for that as well. In his recently released Emergency Action Plan to Save the Economy, he lays out the basics for attacking the ongoing economic crisis. It starts with stopping the virus through testing, tracing and putting medical supplies where they are needed most. The plan would then look to support small businesses, keep employees on payrolls and work toward a second stimulus package.
A second stimulus package “…is quite necessary, if we don’t want the economy to worsen in the coming months,” says Harry Holzer, Professor of Public Policy at Georgetown University and former Chief Economist for the U.S. Department of Labor. “There have been signs of the recovery flattening, as the virus caseload is getting worse. That’s going to dampen the recovery. That’s going to make people more reluctant to go shopping, to eat in restaurants, etc. The stimulus bills that Congress passed in March and the president signed I think were very helpful in number one protecting workers who had been laid off and people who would’ve been poorer. I think it did a very good job in helping them and also stimulating the recovery. Absent a second round of stimulus, I think more people will suffer and the economic recovery will weaken.”
What form a second stimulus package would take isn’t yet clear, and future events may have some effect on how it shakes out. Before the election, House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin were honing in on a package in the neighborhood of $1.8 to $2.2 trillion. It included a second stimulus check and additional weekly unemployment benefits from the federal government, though some disagreement remained on aid to cities and states. Pelosi’s framework evolved from the $3 trillion HEROES Act, which the House passed back in May, but the Senate did not take it up before the election. The Senate’s last failed attempt at a stimulus package amounted to $500 billion and did not include stimulus checks.
A Biden administration would see the revised HEROES Act as a jumping-off point. “I think the Biden folks might start with Pelosi’s bill,” says Holzer. “Maybe they would like to end up somewhere close to the bipartisan caucus in the House, [which] suggested a $1.5 trillion bill. Of course, [Senate Majority leader Mitch] McConnell hasn’t remotely come anywhere near that. I think the HEROES Act would be either the starting point or certainly the wish list of Biden. But they would understand that that doesn’t have any chance of passing or where they could end up.”
Control of the Senate remains up in the air, and the outcome could have a profound effect on whatever shape another stimulus bill takes. As of this week, the Democrats appear to have 48 seats and the Republicans 50. Georgia’s two seats have yet to be filled, given a unique rule in that state requiring candidates to win a majority of the votes. No candidate in either race reached that threshold, sending each election to a runoff in early January. If Republicans win either race, the Senate will remain under their control. If Democrats win both races, the Senate will revert to their control, given that the Vice President casts the deciding vote in a tie.
A Democratic Senate would allow for a much larger stimulus package, given the presidency and both houses of Congress would be aligned. That package would be more in line with the HEROES Act. A Republican-controlled Senate, a likelier scenario, would probably lead to a much smaller package.
“Basically McConnell will have the power to block a new bill,” says Holzer. “They talk about taking some unused money from the last bill, but those are small amounts. If you want to do legislation, McConnell is going to control it. He’s going to have an awful lot of power. They can peel off some Senate moderates like Susan Collins, but McConnell still controls whether the legislation flows through. Except for very small reallocations of some unspent money from the previous bills, McConnell is sort of in the driver’s seat.”
And with McConnell driving, where does that leave the economy and the millions of unemployed? There are many factors to consider. “Will he reassess?” Holzer wonders. “Will he now believe that more is necessary. Will he want to maintain the good relationship with Biden? There are other variables that may lead him to reassess or not. Remember, McConnell is the guy who so completely obstructed Obama’s agenda. He said publicly [that] my goal is to make him a one-term president. He obstructed everything. Will he continue to be that obstructive with Biden, especially given the needs of the country? There was a fairly strong U.S. Department of Labor report that came out last Friday with the October numbers. And they were pretty good numbers. And McConnell publicly said that this supports my position, that we don’t need a really broad stimulus.”
Those job numbers were somewhat promising. Employers added 638,000 jobs in October, down from 672,000 in September. With that, the national unemployment rate fell to 6.9 percent, even as growth slowed. The number of long-term unemployed rose by 1.2 million. Of the 11 million currently unemployed, one-third have been out of work for at least 27 weeks.
While the economy has improved in recent months, it remains far worse than it was back in February, before the pandemic. It also faces worsening conditions across the country with regard to COVID-19. More than 144,000 new cases were reported on Wednesday, breaking the previous day’s record of 136,000 new cases. Tuesday also saw a record 60,000 COVID-related hospitalizations. Daily case numbers are increasing in 45 states and daily death numbers are increasing in 39 states.
The spiking case numbers are already leading to restrictions that will have a negative effect on the economy. Chicago added new restrictions and a stay-at-home advisory. New York and Minnesota are re-imposing restrictions of their own. One top advisor to Biden proposed shutting down the entire economy for four to six weeks to curtail the spread of the virus.
The rapidly worsening health situation could change McConnell’s thinking on a second round of stimulus. It’s hard to know, given that he still supports President Trump’s efforts to challenge the election results. That position makes it difficult for McConnell to also communicate his intentions for a new stimulus package, let alone work with the incoming administration.
“What other goals does he have in mind?” Holzer wonders. “Part of it is about the economy. Part of it is maybe about the interests of the Republican party. Part of it will be what kind of relationship does he want to establish with Biden and will it be any more cooperative than the one he had with Obama. And I’m not even sure yet if McConnell has figured it out. He might not budge off of his half a trillion. Maybe he’ll budge somewhat. We just don’t know enough about that right now.”