Please save us, Joe Manchin.
Please save us, Joe Manchin.
D emocrats don’t have the votes to stop a filibuster in the Senate, so they’re pushing their nearly $2 trillion COVID-relief effort through the “budget reconciliation” process. This way, the 50 Democratic senators, with a tie-breaking vote from Kamala Harris, can get a bill to the president’s desk. Government money for everyone and a $15 minimum wage to boot!
Well, probably not that second part.
Budget reconciliation is supposed to be used for, well, budget stuff. Under the so-called Byrd rule, every item in a reconciliation bill has to directly, and not just incidentally, affect the federal budget. Last night, the Senate’s parliamentarian ruled that the minimum-wage hike doesn’t qualify. This dooms the provision unless the Democrats overrule the parliamentarian (they’ve said they won’t) or find some clever workaround that the parliamentarian allows.
Conservatives should be glad this particular idea is headed off the stage, but they shouldn’t breathe too big a sigh of relief just yet. The ruling was hardly surprising: A higher minimum wage does affect the federal budget in various ways, but these are incidental side effects, not the main purpose of the policy. And there’s a ton of bad ideas the Democrats can still enact via reconciliation. After all, shoveling taxpayer money out the door affects the budget quite directly indeed.
From here, conservatives have to rely not on the parliamentarian, but on the members of the Senate — especially the moderate Democrats whose votes will be needed to hit 50.
Save us, Joe Manchin.
There’s lots of fat to trim. Let’s go over some major spending items, the most justifiable first:
Actually fighting the pandemic: $130 billion (7 percent of the bill’s spending)
Okay, okay. It’s hard to argue with things like testing and vaccine distribution.
Unemployment: $250 billion (13 percent)
Unemployment benefits normally replace only a fraction of workers’ earnings, the idea being to help them out in a tough time while making sure they still have a big incentive to get new jobs. It makes sense to boost these benefits during a pandemic — which we did, first by $600 per week for a period last year, and then with a $300 top-up expiring next month. Even the $300 boost pays a sizeable fraction of workers more than they made while working.
As we get back to normal, it will increasingly make sense to bring that bonus down or just let it expire. Instead, Democrats want to increase it to $400 and keep it around all the way through August. Some modest extension might be in order, but this is too much.
Child allowance: $110 billion (5 percent)
The Democrats want to give parents a lot of money — specifically, $3,600 per year for each child under six and $3,000 for older kids up to 17. (This would replace the current child tax credit, which is worth up to $2,000 per child but is not available to poor parents without enough tax liability to offset; this ensures it supports only working households.) The bill would create this benefit for just a year, but the goal is to make it permanent in the future.
I have some sympathy for doing more to help parents, and for using simple benefits rather than complicated welfare programs to do so, but this is the wrong way to go about it. It’s not paid for by cutting the other spending we already direct to many of these families (unlike Mitt Romney’s far better, if far from perfect, proposal), and it does nothing to ensure that people are working to support themselves. In some ways it would mark a return to the welfare system before the 1996 reform. Maybe things would be different this time, but this is too big a benefit implemented too quickly, with no offsetting cuts, and at a time when we’re already sending families tons of cash through other mechanisms. Speaking of which . . .
Checks from Santa Claus: $420 billion (22 percent)
As noted, we’re already helping people directly affected by the pandemic through unemployment (and aid to businesses). Plenty of Americans, though, didn’t lose their jobs or any income at all. And with so much shut down over the past year while Congress was flinging money around, Americans have actually saved up a ton of money to spend as the economy rebounds.
But Washington loves sending cash to people for no particular reason, so $1,400-per-person checks are on the agenda too. The proposed checks are designed to exclude individuals making more than $100,000 and couples making more than twice that, so at least they’re not as poorly targeted as they could be, I guess.
Direct aid to state and local governments: $350 billion (18 percent)
Some state and local governments took a hit from the pandemic. On average, though, the damage has been far less than anticipated, and far less than what the Democrats plan to spend. Even some hard-hit governments would get more money than they lost. Amusingly, some Democrats have started worrying that red states might just use the aid to finance tax cuts.
K–12 education: $130 billion (7 percent)
Nearly a third of the country’s K–12 students are still attending “virtual-only” schools, and the Democrats’ talking point has been that schools need more money to offer in-person instruction. But the excuses for keeping schools closed are fading out as COVID-19 recedes and the evidence grows that schools can operate safely with basic precautions, not to mention that schools haven’t spent most of the aid money that’s already been given. Oh, and according to the Congressional Budget Office, less than 10 percent of the new bill’s school funding would even be spent this year.
There’s more where that came from, including increased Obamacare subsidies and massive amounts of paid leave for federal workers with kids out of school. It’s great that a $15 minimum wage is off the table, but we’re still relying on Joe Manchin and company to save us from a mountain of pointless spending.