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A sign outside a restaurant on the River Walk in San Antonio.  (AP Photo/Eric Gay) A sign outside a restaurant on the River Walk in San Antonio.  (AP Photo/Eric Gay)

A sign outside a restaurant on the River Walk in San Antonio. (AP Photo/Eric Gay)

Jon Greenberg
By Jon Greenberg March 5, 2021

If Your Time is short

  • The minimum wage hike is out; the $350 billion for state and local governments is still in.

  • There are tighter limits on the stimulus checks, now with a $160,000 joint income cut off.

  • A handful of infrastructure projects, criticized by Republicans, fall by the wayside.

Senate rules and Senate politics are working their will on the pandemic relief and stimulus plan. 

The total price tag is about $70 billion less than in the House version.

The individual stimulus checks will still be $1,400, but won’t be sent to families with joint incomes over $160,000, a 20% haircut from the upper limit in the House. The $15 minimum wage is gone. Extra unemployment payments could end up at $300, rather than the $400 in the House bill.

Senators also discarded a few other items.

Republicans railed against operating money for a bridge between the U.S. and Canada, and a $125 million grant to help extend the Bay Area Rapid Transit system in the San Francisco Bay area. Both were dropped from the Senate bill.

But the Republican critiques of the bill largely remain the same.

They say it spends too little on the health side of the pandemic, and spends far too much to spur an economy that already is on the mend. A small group of Senate Republicans had  a much smaller $618 billion alternative to the Democrats’ $1.9 trillion plan.

The stimulus checks will cost about $410 billion. Beyond that, the details of the Democratic version might continue to shift, but here are the essential building blocks.

$350 billion to states and localities

Aid to states and localities is the single biggest item that Democrats want and that Republicans reject. It would send $220 billion to states, territories and tribal governments, and $130 billion to cities and counties in order "to mitigate the fiscal effects stemming from the public health emergency."

The measure enjoys broad support at the local level. Bipartisan groups such as the National Association of Counties have lobbied hard for passage. Some Republican mayors back it, along with West Virginia Gov. Jim Justice. 

There’s data to say that the pandemic has put pressure on state and local governments. But gaps in the data make it hard to quantify the total impact. Thanks to earlier federal stimulus aid, states avoided the revenue hits they expected, although more than half saw revenues drop. One thing is certain: State and local governments have shed about 1.3 million jobs since the pandemic hit.

Expanded unemployment, child tax credits and health insurance

The bill extends unemployment coverage through August and adds an extra $300 to $400 a week in benefits. The price tag for that and other unemployment compensation changes is $242 billion. It would raise the child tax credit from $2,000 to as much as $3,600, at a cost of nearly $90 billion. Medicaid, the government’s health insurance for lower income households, would grow, as would health insurance premium subsidies, for an additional $75 billion.

Republicans cast all of these as "policies that destroy jobs." Their biggest reason was the hike in the minimum wage, which is now gone. They also argued that the child tax credit and health care elements would lead to fewer hours worked. But people choosing to work fewer hours isn’t exactly the same as a loss of jobs. 

Economists by and large expect the bill to increase the number of jobs, and if anything, the concern is that it might overheat the economy.

Economist Matt Weidinger at the American Enterprise Institute, a market-oriented think tank, wrote that job growth might fall short of the Democrats’ hopes, but no forecast saw the number falling. Pumping billions into the economy would drive up demand, said Brookings economist Louise Sheiner, and "when demand for output increases, demand for labor increases as well."

Aid to schools

The bill has about $128 billion for primary and secondary schools, and another $40 billion for colleges and universities.

Republicans describe the local school money as part of the "bailout" for states and local government. They also say, accurately, that only 5% of the money for local schools comes in fiscal year 2021. "When does the White House think schools should open?" they said.

Democrats counter that schools will need money in the long run to make up for the lost year when schools went online. There’s also a bit of a timing mismatch between the school and federal fiscal year. Schools ease back after June and don’t fully restart until late August and September. The federal fiscal year ends in September.

Kevin Welner, education professor at the University of Colorado at Boulder said reopening schools is the "easy part."

"The recovery from the pandemic will require a sustained commitment to addressing the needs of the nation’s children," Welner said. "For school districts, budgetary commitments cannot only be short term."

Direct pandemic health-related spending

Republicans criticize the bill for spending relatively little on issues tied to the health aspects of the coronavirus. 

"There’s about 9% … actually going to COVID, meaning 91% of it is not even COVID-related," said Rep. Ted Budd, R-N.C. PolitiFact rated that Half True.

Broadly, the bill offers about $160 billion for vaccines, vaccine distribution and public health measures to coral the virus. 

In a $1.8 trillion package, even $160 billion represents a small slice. There is debate over the right balance between dealing with the pandemic’s health impacts on one hand,and its economic impacts on the other. The two are intertwined. The previous major federal relief bills offered both economic stimulus and funds to stop the virus from spreading. While the current package spends money in different ways, it follows that broad outline. Economists vary on whether it overshoots on the economic stimulus.

Republicans go further to say the bill is loaded with congressional pork and spending wholly unrelated to the pandemic.

The measure does include a number of items, such as $270 million, split between the National Endowment for the Humanities and the National Endowment for the Arts, $200 million to the Institute of Museum and Library Services, and $50 million to address environmental issues in minority and low-income neighborhoods. There’s also $50 million for family planning, some of which could go toward Planned Parenthood.

Child care, small business and household aid

There is nearly $40 billion for child care and about $10 billion to help lower income families pay for food and utilities. There is $25 billion to help renters and small landlords with back rent. The bill also has $50 billion in loans and grants to businesses hard hit by the pandemic.

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Our Sources

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