GOP highlights unspent relief funds in criticizing Biden plan

Greg Nash

Republicans are zeroing in on potentially hundreds of billions in unspent funds from previous rescue packages in their criticisms of President Biden’s $1.9 trillion relief plan.

GOP lawmakers, who are in favor of a coronavirus measure that carries a smaller price tag, say the combination of unobligated funds and an improving economic outlook mean Democrats need to scale back their ambitions for the latest relief bill.

“It is estimated that approximately $1 trillion in existing COVID-19 funding has yet to be spent,” said Rep. Jason Smith (Mo.), the top Republican on the House Budget Committee.

“Before President Biden and congressional Democrats try to pass trillions more in spending, the American people need, at the very least, a thorough and accurate accounting of the trillions of dollars already approved.”

The funding argument has popped up at both committee hearings and on the Senate floor.

“Now we’re to a point where the Biden administration is proposing $1.9 trillion of additional spending,” Sen. Lindsey Graham (R-S.C.), ranking member on the Senate Budget Committee, said earlier this month.

“We haven’t spent the money we’ve allocated, nowhere near the money we’ve allocated.”

Biden, stung by the experience of a scaled-down stimulus package in 2009 that contributed to a slow recovery from the Great Recession, says it’s riskier to do a smaller relief bill than a big one, a position backed by Federal Reserve Chair Jerome Powell.

“The overwhelming consensus is in order to grow the economy a year or two, three, and four down the line, we can’t spend too much,” Biden said at a CNN town hall Tuesday evening in Wisconsin.

“Now is the time we should be spending. Now is the time to go big.”

Democrats note that most forms of government spending have a long tail, and often get budgeted out over months or years.

But Republicans say that shouldn’t be the case with emergency funds, and that Biden’s budget office has been slow to provide them with up-to-date figures as the relief package makes its way through Congress.

In a Feb. 5 letter to the White House Office of Management and Budget, Republican members of the House Appropriations Committee asked for an update on $700 billion in discretionary COVID-19 funds. They said they have yet to receive one.

The most recent publicly available data predates the December relief package, which was signed into law on Dec. 27. Democrats note that a large percentage of funds from previous bills had been spent, and expect to see similar trends when January data is released.

The Committee for a Responsible Federal Budget, a budgetary watchdog group, estimates $1.1 trillion of the roughly $4.1 trillion approved by Congress for COVID-19 relief last year remains unused, though the numbers may not reflect expenditures in the past several weeks.

Republicans have argued that the amount of unused funds means Democrats should slim down a relief package that some economists warn could overheat the economy, potentially leading to inflation and a subsequent rise in interest rates.

Some budget experts say it’s a bit more complicated than that.

Ben Ritz, budget director at the Progressive Policy Institute, says the government funds with the greatest economic impact went out the door quickly, and are slated to run out soon.

“A lot of that money was for direct relief, unemployment benefits, stimulus checks,” he said.

Of the $900 billion in the December relief bill, $287 billion was for unemployment relief and stimulus checks.

With the stimulus funds already out the door and emergency unemployment benefits expiring on March 14, Ritz said Congress has to provide more funds, regardless of whether there’s unspent money sitting in accounts set aside for small business loans, education and transportation.

“The line that the money hasn’t been spent was definitely true in January, but not in March,” he said.

Marc Goldwein, CFRB’s policy director, said the arguments highlighting unspent cash don’t add up.

“I don’t think it’s fair to say there’s a big pot of money that they’re not spending. And I don’t think we can afford to wait until it’s all spent, because different parts of COVID relief cover different needs,” he said.

Just because there’s unspent money covering Medicaid expenses, Goldwein said, doesn’t mean the economy is out of the woods.

But he also said significant portions of the $1.9 trillion plan, such as expanded child tax credits, have little to do with COVID-19 relief, and should be passed separately or paid for somehow.

“Some of these are great policies; none of them have anything to do with COVID,” he said.

The nonpartisan Congressional Budget Office found that several key policies in the Democrats’ relief bill, such as funding for schools, are expected to pay out gradually over the course of a decade, far beyond when the pandemic is likely to end.

Democrats, however, see the relief measure as a means of fixing economic problems that existed before the pandemic, such as poverty and inequality. They’ve pushed to include a minimum wage hike in the bill, though it may be stripped out in Senate procedure.

Moreover, they note that they agreed to the December bill with the expectation that it would bridge the gap until Biden took office.

“Congress’ bipartisan action in December was a long-delayed down payment and only a portion of what is necessary to respond to the country’s needs going forward,” said House Budget Committee Chairman John Yarmuth (D-Ky.).

“The president’s American Rescue Plan fills crucial gaps in that relief and will generate a stronger, more inclusive recovery.”

Updated at 11:22 a.m.

Tags Budget coronavirus relief COVID-19 relief Jason Smith Joe Biden John Yarmuth Lindsey Graham Pandemic
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