Joe Biden ran on unifying the American people. However, his first legislative act is to pass an unnecessary $1.9 trillion COVID-19 spending package with no Republican votes.
Here are a few reasons why this stimulus package is unnecessary:
- The Biden administration is proposing this new spending even though Congress has already enacted over $4 trillion in aid, according to the Committee for a Responsible Federal Budget.
- Of this, $1 trillion is unspent and $900 billion was passed by lawmakers and signed into law less than two months ago. Notable examples of remaining funds include Health Spending ($239 billion), Economic Injury Disaster Loans ($172 billion), Unemployment Insurance Expansion ($172 billion), Education Funding ($59 billion), State and Local Aid ($58 billion), Agriculture ($29 billion), Food Stamps ($33 billion), and the Child Care and Development Block Grant ($10 billion).
- This amount also does not include the $700 billion that has been allocated by administrative action and $2.6 trillion that has been spent by the Federal Reserve.
- To put this spending in context, there are 122.8 million families in the U.S. and 79.5 million households, according to the Census Bureau. By either metric, we have spent a significant amount of taxpayer dollars already — $51,500 per family and $33,380 per household has already been spent.
- President Biden’s $1.9 trillion plan would spend an additional $15,500 per household or $23,900 per family.
- According to the Bureau of Economic Analysis, personal saving as a percentage of income in 2020 was 16.4 percent, more than double the pre-pandemic rate in 2019, which was just 7.5 percent.
- According to the American Enterprise Institute, households are sitting on well over $1 trillion of savings. When the $600 stimulus checks were handed out, research found that households with incomes above $78,000 saved $555 of their $600 check, spending just $45.
- Economic forecasters expect 2021 to be a year of solid economic growth even without another stimulus bill. The CBO expects the economy to grow by 3.7 percent from the fourth quarter of 2020 to the fourth quarter of 2021, returning to its pre-pandemic level by the middle of the year, under the assumption that Congress will not appropriate any additional funding.
- Even former Clinton Treasury Secretary and Obama Chief Economic Adviser Larry Summers has expressed skepticism with Mr. Biden’s plan. Writing in The Washington Post, Summers argued that Mr. Biden’s stimulus plan is three to six times larger than the economic shortfall and that it will result in wasteful spending that threatens to cause future financial instability and unnecessary inflation.