Biden’s Magical Bill: Curing Covid and (Mostly) Ending Poverty in One Fell Swoop

Less than 10% of the $1.9 trillion is actually spent battling the virus, just 1% is for vaccine distribution, but don’t worry, this wondrous bill will alleviate poverty, create jobs, and more, as long as we keep spending and spending.  Where have we heard this before?

If you thought Biden’s massive COVID-19 relief legislation only fixed the fall out from the ongoing pandemic, think again.  In a “that’s not all” to end all “that’s not alls,” this magical bill also ends or at least greatly reduces poverty along with curing other social ills.  Yes, according to Columbia University and the Urban Institute, this $1.9 trillion dollars in spending is so powerful and well crafted it will cut the poverty rate for black Americans by 38%, Hispanic Americans by 43%, and white and Asian Americans by 24%.

“This is one of the biggest, most fundamental changes to anti-poverty policy that we’ve seen since the 1960s, for sure,” claimed Christopher Wimer, co-director of the Center on Poverty & Social Policy at Columbia University.  According to the completely unbiased CNN, “In total, 16 million fewer people will be living in poverty in 2021, according to the Urban Institute, which looked at the impact of the child tax credit, stimulus payments, unemployment benefits extension and food stamps boost.”

The bill is so progressive that even self-described socialist Bernie Sanders is ecstatic.  “This is the most significant legislation for working people that has been passed in decades,” the Senator from Vermont told Anderson Cooper on Monday.  “I think what shocks many in the establishment, and certainly my Republican colleagues is that we wrote a bill to address the crisis facing working families and the middle class and low-income people, and not the wealthy and large corporations and their lobbyists.”

What magic does the bill contain to lift millions of people out of poverty?

First, it ramps up the child tax credit.  In addition to increasing the credit to $3,000 for children under 18, up from $2,000 for children under 17, it makes the credit fully refundable, meaning it’s now a cash payment rather than a credit.  Previously, it was a deduction on your taxes, the bill turns it into a flat out check.  In fact, it’s a payment that can be delivered on a monthly basis, from July to December, not something that is even tied to your taxes any longer.

There’s also an increase in the earned income tax credit.  Even childless workers can receive up to $1,502, tripling the current amount, and the eligibility age has been reduced as well.  In fact, even 19 year olds working part time and living with their parents are eligible for the credit now.  

Second, the bill provides another round of stimulus checks for individuals making less than $80,000 per year and families less than $160,000 per year, $1,400 per person.  Amazingly the Urban Institute believes this direct payment to be the largest poverty reducer.  Who knew sending cash to people solved the poverty problem?  Why not just triple the payments and end poverty entirely?

There’s also additional support for the unemployed, $300 per week through September 6 with no taxes on benefits up to $10,200 for households that earn less than $150,000 per year.  Unemployment benefits are also available to gig workers, independent contractors, restaurant staff, and others that wouldn’t normally qualify, extending protections that first went into effect last year.  Food stamps are more generous as well, up 15% percent, an additional $25 per person per month or $100 for a family of 4.

According to the experts, there’s only one problem:  These measures are temporary for 2021 only.  Meaning, the plan is to keep this level of spending permanent, coronavirus relief turned into an endless expansion of government spending.  Indeed, anti-poverty experts are already claiming they’re optimistic these heightened levels will be the new baseline long after the pandemic is over.  “Getting this far is a huge win and a sign of progress in the conversation, as well as immediately putting money in people’s pockets,” explains Elizabeth Lower-Basch from The Center for Law and Social Policy.  “I certainly don’t think it’s a done deal, but I think there’s a lot more opportunity than there has been in the time that I’ve been working on these issues.”

CNN is claiming Biden is already gearing up to make it happen.  “After signing a massive but temporary expansion of the social safety net into law this week, President Joe Biden will set about convincing Americans that its benefits — which amount to a dramatic reshaping of the country’s economy — must be made permanent.”  The ever unbiased CNN then editorializes, dramatically, “The legislative lifeline, while extraordinary in scope, is only a temporary solution to pull America from its crisis. A legacy-making program along the lines of a modern-day New Deal for Biden would require an even more difficult measure of political capital.”

All I can say is wow:  A bill marketed entirely as necessary relief from the economic, financial, and health hardship induced by the coronavirus is now suddenly transformed into the foundation for a modern day New Deal.  All in back rooms, all with no substantive debate, no cross party votes, and no honesty at all about what they were trying to achieve.

It gets better.  Less than 10% of the $1.9 trillion is actually spent battling the virus, just 1% is for vaccine distribution.

Does anyone wonder why everyone hates politicians?  It’s certainly fair to debate the optimal outlays for all of these programs, but why the bait and switch?  This isn’t the first time a coronavirus relief bill was used in this manner.  In fact, the last relief bill, passed right before Christmas was also surreptitiously transformed into another purpose.  That time it was global warming, and, as usual, the pundit class was giddy over the deception.

Jonathan Chait, writing for the New York Intelligencer, described it as the “most significant climate change legislation ever,” practically gleeful that these measures were “thrown into the bill with little or no public debate.”  Chait continued, “How big a deal are the climate provisions? The World Resources Institute has called the bill ‘one of the most significant pieces of climate legislation that Congress has passed in its history.’ Grant Carlisle, a senior policy adviser at the Natural Resources Defense Council, says, ‘This is perhaps the most significant climate legislation Congress has ever passed.’”

Let’s see, two coronavirus relief bills, less than three months apart.  Afterwards, we’re told that one is in fact the most significant climate change legislation ever passed and the next is the biggest change to anti-poverty spending in 60 years.  Does anyone see a pattern here?

Perhaps even more incredibly, anti-poverty isn’t all the bill contains either.  It truly is the gift that keeps on giving.  There’s $350 billion for cash-strapped, Democrat-run states, basically a no strings attached check for the state leadership to waste on whatever they think is the best means to burn the money.  There’s $86 billion to bail out private pension funds, yes, private pension funds, meaning they’re taking your tax dollars and giving it to retirees, union, of course, on the side.  This money, perhaps needless to say, also comes with no strings attached.

Almost a full third of the spending doesn’t even occur in 2021.  Yes, you read that right, about $600 billion is reserved all the way out through the decade long after coronavirus is gone.  Amazingly, that includes funding to reopen schools.  $126 billion is allotted in the bill, but that money doesn’t need to be spent this year.  Can someone please explain to me why we’re spending additional billions on reopening schools long after they will be reopened?

Of course, the experts are already lining up to expound the bill’s many wonders.  In addition to the antipoverty benefits, the Organization of Economic Cooperation and Development Projects has doubled their economic growth estimate for 2021, up to 6.5% this year thanks to government spending.  Gregory Daco, Chief US Economist for Oxford Economics claims “The key engine of growth is going to be that powerful cocktail of both a healthier economy along with fiscal stimulus,” promising 7% growth and 7,000,000 new jobs.

Experts credit this stunning growth, a return to the 1980’s in fact, on the structure of the bill.  According to the Tax Policy Center, 20% of the poorest families will see an income increase of 20%, at least temporarily, while top earners will see a rise of less than 1%.  Somehow, this completely temporary money that will surely disappear without a trace is going to produce an economic rebound unlike any we have seen in decades.

“There was a big question about the [2017] Tax Cut and Jobs Act, whether or not it would over time have much of a stimulative effect,” explained Howard Gleckman, a senior fellow at the supposedly non-partisan Tax Policy Center. “This one, there’s no question. Everyone agrees it will stimulate the economy. The question is will it stimulate the economy too much?”

Stimulate the economy too much?

Where have we heard this before?  I’ll give you a hint:  Back when Biden was Obama’s Vice President.  In 2009, the American Recovery and Reinvestment act was going to “save or create” 3.6 million jobs and, according to The Guardian, put him “on course to achieve the most ambitious first 100 days in office since Franklin Roosevelt in the 1930s.”  It’s basically the same article, recycled with a different Democrat President and dollar figure.  Also note the ridiculous simplicity of the math:  3.6 million jobs at a cost of $787 billion, now it’s 7 million jobs at a cost of $1.9 trillion, meaning, quite coincidentally, the formula to calculate these new jobs is almost identical if you account for the increase in salaries during that period.

In other words, a different Democrat President, same old, tired, likely false story from the experts.  Another crisis that hasn’t gone to waste and another fawning media response, despite that the American Recovery and Reinvestment Act lead to the slowest recovery since the Great Depression. Does anyone truly believe any of this anymore? The bottom line: If ending poverty and creating jobs was this easy, as in write a big, blank check, why not double the amount and get double the benefit?

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