The Epidemic relief bill signed by President Biden on the 11th amounted to $1 trillion and $900 billion, the development of a comprehensive funding allocation plan is the core of the Biden Administration‘s work in the coming weeks; to implement this relief plan, Biden will have to spend $3.7 billion per day until 2022, which is equivalent to an average of $43,000 per second.
After this year, the nation has completed the vaccination phase, and a large portion of the $1.9 trillion will have to be spent on revitalizing the economy.
Jack Smalligan, a senior policy fellow at the Urban Institute and former White House budget official, said, “These taxpayer dollars have to be distributed fairly and they have to be spent in a hurry.”
Some of the spending can be expected to happen quickly: the Biden administration has already sent $1,400 in direct checks for weekend money, totaling about $400 billion; it will also provide more unemployment assistance on an ongoing basis for the 20.1 million people in the country who receive some form of benefit.
Both the direct checks and unemployment benefits are part of the previous round of the $4 trillion bailout package, and represent the system the administration has created to distribute funds in this area; the other parts are trickier.
There is $130 billion available for K-12 schools to hire teachers, upgrade ventilation systems and improve other facilities to restore teachers and students to in-person classes; $40 billion for universities; $30 billion for housing assistance; and about $120 billion for public health spending such as vaccine distribution and virus testing.
Some of the funds may take a little more Time to allocate. After the federal government quickly issues the funds, state and local governments may be responsible for spending the money over two fiscal years,” Smolligan said. Hiring teachers, for example, would not be for just one month, but for several years.”
The Treasury Department is consulting with governors, mayors and other officials on how best to allocate about $350 billion in state and local aid; Treasury Secretary Janet Yellen, speaking at the National League of Cities on Sept. 9, said, “The Treasury team will work to deliver aid as quickly as possible and with the maximum impact.”
The Biden bailout bill also has about $140 billion in temporary tax credits; it includes an expansion of the monthly payment child tax credit; starting in July, families earning less than $150,000 would receive at least $250 per month per child.
Douglas Holtz-Eakin, former director of the Congressional Budget Office and now of the right-wing American Action Forum, noted, “The most troubling question is, can the IRS manage and pay this monthly payment for tens of millions of families?”
These tax credit programs have a high error rate; people may move, incomes may change, the IRS may not have the correct age of children, etc. However, Holtz-Eakin also noted that there is little economic risk to Biden in spending the money because the economy is poised to expand rapidly, at the fastest pace in at least 20 years.
Holtz-Eakin said the successful allocation of funds is key to the Biden bailout reaching its goal of reducing child poverty. In addition, the child tax credit will expire later, and Republican lawmakers will be under pressure to consider whether to block the extension of the benefit in light of the 2022 election.
According to Holtz-Eakin, “This is an obvious political trap that the Democrats are trying to create.”
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