‘$1.9 Trillion Is A Lot Of Money’: Dems Ignore Economic Data In Rush To Spend Big

Democrats Are Insisting Congress Must Immediately Spend More Than Twice The Amount Of Money That Was Just Passed For COVID Relief Less Than Two Months Ago

“Biden unveiled his $1.9 trillion plan without any bipartisan buy-in, leaving Republicans to question the need for such a big new package coming on the heels of the $900 billion Congress approved in December for economic relief, vaccines and more. Including that legislation, Congress has already devoted about $4 trillion to fighting the pandemic and the economic devastation it wrought.” (“Turned Off By Biden’s Approach, GOP Opposition To Stimulus Relief Intensifies,” The Washington Post, 1/23/2021)

SENATE MAJORITY LEADER CHUCK SCHUMER (D-NY): “We cannot afford to dither, delay, or dilute. We need a big, bold package along the lines of what President Biden has proposed …” (Sen. Schumer, Congressional Record, S.225, 2/02/2021)

• SCHUMER: “There’s agreement, universal agreement we must go big and bold.” (“Schumer Vows Democrats ‘United’ After Biden Meeting On Coronavirus,” The Hill, 2/03/2021)

SEN. BERNIE SANDERS (I-VT), Senate Budget Committee Chairman: “I know we are throwing out a lot of numbers; $1.9 trillion is a lot of money.” (Sen. Sanders, Congressional Record, S.227, 2/02/2021)

SEN. RON WYDEN (D-OR), Senate Finance Committee Chairman: “Recent history tells us you have to go big…. Go small and you make a big mistake.” (Sen. Wyden, Congressional Record, S.231, 2/02/2021)

Approving The Biden Spending Plan Would Result In Federal Government Assistance Proportionally Exceeding The Economy’s Losses During The Height Of The Pandemic

“If Biden’s package is approved in its entirety, federal government assistance to the economy during the pandemic will clock in at around 25% of annual GDP of almost $21.5 trillion. That compares with the roughly 10% hole the virus tore into the economy at the height of its impact.” (“The Improving U.S. Economy Could Complicate Biden’s Stimulus Plan,” Bloomberg, 2/03/2021)

But The CBO Projects That GDP Would Recover To Pre-Pandemic Levels By The Middle Of This Year, Even Without More Federal Spending, And Economic Indicators Are Already Improving

“The United States economy will return to its pre-pandemic size by the middle of this year, even if Congress does not approve any more federal money to aid the recovery, the Congressional Budget Office said on Monday. … Those projections could further complicate President Biden’s ability to quickly pass a $1.9 trillion stimulus package, as moderate Republicans and even some left-leaning economists express concerns that too much new federal borrowing could overheat the economy.” (“U.S. Economy Is Healing, but Budget Office Says Workers Have a Long Way to Go,” The New York Times, 2/01/2021)

• CONGRESSIONAL BUDGET OFFICE: “In CBO’s projections, which incorporate the assumptions that current laws governing federal taxes and spending (as of January 12) generally remain in place and that no significant additional emergency funding or aid is provided, the economy continues to strengthen during the next five years. Real GDP expands rapidly over the coming year, reaching its previous peak in mid-2021 and surpassing its potential level in early 2025. The annual growth of real GDP averages 2.6 percent during the five-year period, exceeding the 1.9 percent growth rate of real potential GDP…” (“An Overview Of The Economic Outlook: 2021 To 2031,” Congressional Budget Office, 2/01/2021)

JASON FURMAN, Former Chairman of President Obama’s Council of Economic Advisers: “CBO’s new forecast projects 3.7% growth over the 4 quarters of 2021. That is close to the consensus & I view it as likely too pessimistic. …” (Jason Furman, @jasonfurman, Twitter, 2/01/2021)

‘The U.S. Economy Is Showing Some Scattered Signs Of Picking Up’

Bloomberg Headline: “The Improving U.S. Economy Could Complicate Biden’s Stimulus Plan” (“The Improving U.S. Economy Could Complicate Biden’s Stimulus Plan,” Bloomberg, 2/03/2021)

• “The U.S. economy is showing some scattered signs of picking up from an end-of-year slowdown, muddying President Joe Biden’s efforts to win congressional passage of a $1.9 trillion stimulus package. New claims filed for unemployment benefits have fallen for two straight weeks, while January payrolls are forecast to rebound from a December swoon in data out on Friday. Growth at service sector companies accelerated last month to an almost two-year high and homebuilders said demand remained robust. Selected high frequency data, such as weekly consumer confidence readings and restaurant bookings, also point to some strengthening, as virus infections ebb and business restrictions are eased.” (“The Improving U.S. Economy Could Complicate Biden’s Stimulus Plan,” Bloomberg, 2/03/2021)

MAYA MacGUINEAS, President of the Committee for a Responsible Federal Budget: “Sending money to people who don’t need it, overstimulating the economy or unnecessary debt all set us up for more things to clean up later.” (“U.S. Economy Is Healing, but Budget Office Says Workers Have a Long Way to Go,” The New York Times, 2/01/2021)

Former Obama White House Economist Larry Summers Explains The Biden Stimulus Proposal Far Exceeds The Gap In Economic Activity And Dwarfs The 2009 Obama Stimulus Bill

LARRY SUMMERS, Former Clinton Administration Treasury Secretary & Former Obama White House National Economic Council Director: “[W]hereas the Obama stimulus was about half as large as the output shortfall, the proposed Biden stimulus is three times as large as the projected shortfall. Relative to the size of the gap being addressed, it is six times as large.” (Larry Summers, Op-Ed, “The Biden Stimulus Is Admirably Ambitious. But It Brings Some Big Risks, Too.,” The Washington Post, 2/04/2021)

• SUMMERS: “[T]his crude calculation actually underestimates the difference between what was done in 2009 and what is proposed now. First, unemployment is falling, rather than skyrocketing as it was in 2009, and the economy is likely before too long to receive a major boost as covid-19 comes under control. Second, monetary conditions are far looser today than in 2009 given extraordinary Federal Reserve policies, the booming stock and corporate bond markets, and the weakness of the dollar. Third, there is likely to be further strengthening of demand as consumers spend down the approximately $1.5 trillion they accumulated last year as the pandemic curtailed their ability to spend and as promised further fiscal measures are undertaken.” (Larry Summers, Op-Ed, “The Biden Stimulus Is Admirably Ambitious. But It Brings Some Big Risks, Too.,” The Washington Post, 2/04/2021)

SUMMERS: “Wage and salary incomes are now running about $30 billion a month below pre-covid-19 forecasts, and this gap will likely decline during 2021. Yet increased benefit payments and tax credits in 2021 with proposed stimulus measures would total about $150 billion — a ratio of 5 to 1. The ratio is likely even greater for low-income individuals and families, given the targeting of stimulus measures. In normal times, a family of four with a pretax income of $1,000 a week would take home about $22,000 over the next six months. Under the Biden proposal, if the breadwinner were laid off, the family’s income over the next six months would likely exceed $30,000 as a result of regular unemployment insurance, the $400-a-week special unemployment insurance benefit and tax credits.” (Larry Summers, Op-Ed, “The Biden Stimulus Is Admirably Ambitious. But It Brings Some Big Risks, Too.,” The Washington Post, 2/04/2021)

Further, Significant Portions Of The Money Already Appropriated By Congress In 2020 Have Yet To Be Spent Or Obligated

“Of the $68 billion Congress has provided for K-12 schools, states have spent just over $4 billion.” (“COVID-19 Relief Funding,” Senate Republican Policy Committee, 2/03/2021)

“Of the $37 billion Congress has provided for higher education, states have spent just over $11 billion.” (“COVID-19 Relief Funding,” Senate Republican Policy Committee, 2/03/2021)

“Of the $13.5 billion Congress has provided for Child Care and Development Block Grant program, only $3.5 billion has been obligated.” (“COVID-19 Relief Funding,” Senate Republican Policy Committee, 2/03/2021)

“CDC has distributed only $3 billion of the $8.75 billion appropriated for vaccine distribution.” (“COVID-19 Relief Funding,” Senate Republican Policy Committee, 2/03/2021)

“For COVID-19 testing, there is still over $14 billion that has not been obligated.” (“COVID-19 Relief Funding,” Senate Republican Policy Committee, 2/03/2021)

“None of the $27 billion provided for the Department of Transportation in December has been obligated.” (“COVID-19 Relief Funding,” Senate Republican Policy Committee, 2/03/2021)

“Less than 75% of the funding provided for community planning and development in the CARES Act [which was passed in March 2020] has been obligated.” (“COVID-19 Relief Funding,” Senate Republican Policy Committee, 2/03/2021)

“Of the over $1 billion provided for housing programs in the CARES Act [last] March, more than $200 million remains to be obligated” (“COVID-19 Relief Funding,” Senate Republican Policy Committee, 2/03/2021)

“Of the $26 billion provided for agriculture and nutrition in December, $24.5 billion has yet to be obligated.” (“COVID-19 Relief Funding,” Senate Republican Policy Committee, 2/03/2021)

And Democrats Are Yet Again Pushing Massive Bailouts For Big-Spending States

“[President] Joe Biden’s $1.9 trillion relief plan… proposes $350 billion of emergency aid to states and local governments, enough to more than cover the immediate budget shortfalls caused by shutdowns to contain the virus. It would also extend $20 billion to public transit agencies like New York’s Metropolitan Transportation Authority...” (“Biden Relief Plan Tosses $350 Billion Lifeline to States, Cities,” Bloomberg, 1/15/2021)

• “[T]he $350 billion set aside for state and local aid in the package is more than double what Democrats wanted to include in last month’s $900 billion measure.” (“Biden Steps Into Debt Fight On Capitol Hill,” The Hill, 1/21/2021)

Sen. Joe Manchin (D-WV) Called The Biden Proposal ‘Extremely High’

FOX NEWS’ BRETT BAIER: “And also $350 billion in state and local relief. You’re for that?”
SEN. JOE MANCHIN (D-WV): “Well, we have to look at that. I think that’s way high -- from everything I have seen, that’s extremely high. … And, you know, we work together in the $900 billion, 908 team that we put together with Democrats and Republicans and came up with a good compromise, but you had to meet metrics in order to do it. You had to need, you had to show, basically, the coronavirus, how much it attacked your state and, basically, how your economy lost in the population. So, they’re going to have to prove that they need it, but I don’t think it’ll be anywhere near that.” (Fox News, 2/02/2021)

But In State After State, Tax Revenues Have Exceeded Pessimistic Estimates From The Beginning Of The Pandemic, And In Some Cases Even Have Budget Surpluses Now

JPMORGAN: “2020 state tax receipts for the 47 states who report the data, shows an avg decline of just 0.12% vs. 2019, with a weighted avg decline of 0.06%, virtually flat to 2019. 21 of 47 states show positive YoY growth of tax receipts… Of the 40 states that report personal income taxes, 2020 collections rose 1.3% vs 2019, with a weighted avg growth of +2.0%. Over half (25) of states reported positive growth, especially larger states (CA, NY, IL, MA)” (“Municipal Markets Weekly,” JPMorgan, 1/29/2021)

CALIFORNIA: “Remarkably, [California] has more money than it did a year ago, before the pandemic — the overall proposed spending total for 2021-22 is $5 billion higher than in last January’s budget, while the general fund amount is a staggering $11.5 billion larger.” (“California Expects Record Revenues In Stunning Covid Budget Reversal,” Politico, 1/08/2021)

• “The state’s coffers are so full that California will be constitutionally obligated to put billions of dollars into rainy-day reserve accounts, all while many other states are facing deficits.” (“California Expects Record Revenues In Stunning Covid Budget Reversal,” Politico, 1/08/2021)

MICHIGAN: “A Wednesday report from the Senate Fiscal Agency says the impact of the recession caused by the coronavirus pandemic is unlike any that Michigan has seen…. The result: At least for the short term, Michigan has about $1.4 billion more to work with than anticipated just a few months ago, in August. And the August estimates — which have now proved too pessimistic — represented a $2.3 billion upward revision from what officials had estimated in May. The upward revisions do not strengthen Whitmer’s case for more direct federal aid for Michigan, which she has called for repeatedly in recent weeks. … Wednesday’s report — which is one of three sets of estimates state officials will consider when they meet to estimate state revenues Jan. 15 — says the state ended 2020 with a $2.5 billion balance in its general fund and a $1.2 billion balance in its School Aid Fund. That’s about $811 million better than what officials estimated in August.” (“Michigan Budget Isn’t As Bad As Whitmer Projected, Agency Reports,” Detroit Free Press, 1/07/2021)

PENNSYLVANIA: “Pennsylvania collected $3.7 billion in General Fund revenue in December, which was $465.8 million, or 14.5 percent, more than anticipated, Revenue Secretary Dan Hassell reported today. Fiscal year-to-date General Fund collections total $18.5 billion, which is $467.1 million, or 2.6 percent, above estimate.” (Pennsylvania Press Room, Press Release, 1/04/2021)

VIRGINIA: “Governor Ralph Northam today announced that total General Fund revenues rose 15.1 percent in December, driven by solid growth in payroll withholding, corporate income tax, sales and use taxes, and recordation tax collections. On a fiscal year-to-date basis, total revenue collections rose 7.8 percent through December, well ahead of the annual forecast of 1.2 percent growth.” (Gov. Northam, Press Release, 1/13/2021)

MASSACHUSETTS: “Massachusetts Department of Revenue (DOR) Commissioner Geoffrey Snyder today announced that December revenue collections totaled $2.842 billion, $230 million or 8.8% more than the actual collections in December 2019. FY2021 year-to-date collections totaled approximately $14.306 billion, which is $372 million or 2.7% more than collections in the same period of FY2020.” (Massachusetts Department of Revenue, Press Release, 1/06/2021)

GEORGIA: “Through November, Georgia’s tax collections are running nearly 6% ahead of last year’s numbers, meaning the state is more than $550 million ahead of projections on its $26 billion spending plan.” (“Georgia Budget Writers Greet Improved Revenue With Caution,” The Associated Press, 1/07/2021)

COLORADO: “In a reversal from earlier forecasts, Colorado’s budget is now expected to take a dive for only one year before rebounding to pre-pandemic levels in fiscal year 2021-22, which starts July 1. The unexpectedly quick recovery means lawmakers potentially have a surplus as high as $3.8 billion for the coming fiscal year, according to new legislative projections.” (“Colorado’s Fiscal Future Looks Brighter. Now Lawmakers Must Decide How To Spend The Unexpected Windfall.,” The Colorado Sun, 12/18/2020)

NORTH CAROLINA: “Thanks in part to the budget stalemate, state government now has more than $4 billion in unspent revenue, and the total is growing every month -- even amid the pandemic’s economic slowdown. For now, though, the legislature has no immediate plans to spend the funds on COVID-19 relief or other priorities… According to the State Controller, the new fiscal year began July 1 with $1.47 billion in the bank. Between then and Oct. 31, the state has taken in an additional $2.91 billion that hasn’t been appropriated. That amount is in addition to the $1.1 billion in the state’s ‘rainy day’ fund. … Another factor driving the surplus is that North Carolina continues to see tax revenue higher than 2019. For example, the state got $1.14 billion in individual income tax revenues in October, up from $1.08 billion in October 2019, according to the State Controller’s report.” (“NC Has More Than $4 Billion In Unspent Revenue But No Immediate Plans To Spend It,” The News & Observer, 12/09/2020)

MINNESOTA: “What had been a $2.42 billion deficit when Minnesota Management and Budget, the agency that oversees the state’s finances, last took a look at the economic impacts of COVID-19 has turned into a $641 million surplus. That’s on a base two-year budget of $48.4 billion…. That look into the two-year budget that begins July 1, 2021 is a vast improvement over the summertime-estimate of a $4.7 billion deficit. And it is well below the state’s current rainy day savings account of $2.36 billion…. Since the start of the state’s fiscal year on July 1 … tax collections have been better than estimated — $805 million better.” (“Minnesota’s Budget Forecast Projects $641 Million Surplus,” MinnPost, 12/01/2020)

MARYLAND: “The Board of Revenue Estimates voted today to slightly increase the revenue projections for Fiscal Year 2021 by 0.3 percent to $18.8 billion, representing a $64 million increase from the September estimates. Additionally, the Board revised the projection for Fiscal Year 2022 to $19.8 billion, representing a 0.7 percent, or $143 million increase from the previous estimates…. The increases in revenue estimates are due to higher-than-expected sales tax revenue and higher capital gains from an unexpectedly strong stock market this fall.” (Comptroller of Maryland, Press Release, 12/11/2020)

WISCONSIN: “Amidst all that has happened, our state’s fiscal condition has remained remarkably resilient. At the close of the 2019-20 fiscal year, the state maintained a positive gross General Fund balance of $1.172 billion, approximately $380 million above the estimated balance … In addition … the 2019-20 gross ending balance was roughly $85 million more than the ending balance at the end of the 2018-19 fiscal year…. Furthermore, we increased the state’s Budget Stabilization Fund once again in 2020, depositing an additional $105.8 million as was noted in the state’s Annual Fiscal Report in October 2020. This deposit brings the current overall total to an all-time high of $761.8 million …” (“Agency Budget Requests And Revenue Estimates FY2022 FY2023,” Wisconsin Department of Administration, 11/20/2020)

• “Even after reducing taxes, and despite one of the most sudden and severe economic crises in history, our overall state tax revenues increased by $190 million in the 2019-20 fiscal year over the prior fiscal year…. For fiscal year 2020-21, overall state tax revenues are forecasted by the Department of Revenue to be $17.664 billion, which represents an increase of $132 million above the 2019-20 fiscal year tax revenues. Total state tax revenues are estimated to increase above this revised fiscal year 2020-21 base to $18.017 billion in fiscal year 2021-22, an increase of $352.7 million (2.0 percent).” (“Agency Budget Requests And Revenue Estimates FY2022 FY2023,” Wisconsin Department of Administration, 11/20/2020)

• “A continued surge in corporate tax collections over the rest of this fiscal year will help produce a $1.2 billion surplus to end the 2019-21 budget, giving the state a cushion heading into the next biennium. According to a report from the Evers administration Friday, the state will see $1.35 billion in additional revenue growth over the 2021-23 biennium on top of the gross balance of $1.2 billion surplus.” (“MON AM News: DOA Projects $1.2B Surplus To End Fiscal Year, Growing Revenues For Next Cycle,” WisBusiness, 11/23/2020)

MAINE: “The Legislature’s Appropriations Committee got some good news from economic and revenue forecasters on Thursday: Despite the recession, Maine’s economy is still growing. Last month state revenues were above estimates by $81 million, and for the budget year to date, revenues are above estimates by $227 million. The increase is being driven by better-than-expected sales and personal income tax collections.” (“Maine Revenues $81 Million Above Projections Last Month,” Maine Public, 12/17/2020)

Reminder: Democrats Have Repeatedly Announced Their Eagerness To Use The Pandemic To ‘Fundamentally Transform The Country’ And ‘Restructure Things To Fit Our Vision’

JOE BIDEN: “It’s like the New Deal, think of every great - every great change that’s taken place that’s come out of a crisis - that’s come out of a crisis…. And I think we have an opportunity now to significantly change the mindset of the American people, things they weren’t ready to do, you know, even two, three years ago.” (CNN Coronavirus Town Hall, 4/16/2020)

• BIDEN: “And I truly think that if we do this right, we have an incredible opportunity to not just dig out of this crisis, but to fundamentally transform the country.” (LULAC Virtual Town Hall, 5/04/2020)

REP. JIM CLYBURN (D-SC), House Majority Whip: “This is a tremendous opportunity to restructure things to fit our vision.” (“House Democrats Eyeing Much Broader Phase 3 Stimulus,” The Hill, 3/19/2020)

SEN. CHUCK SCHUMER (D-NY): “We need big, bold action…. We need Franklin Rooseveltian-type action and we hope to take that in the House and Senate in a very big and bold way.” (“Schumer, Pelosi Set To Unveil ‘Rooseveltian’ Relief Package,” The Hill, 5/07/2020)

• SCHUMER: “A picture of Franklin Roosevelt was hovering over all of us and we’re very much aware of that. It was alluded to a whole bunch of times.” (The Washington Post’s Jeff Stein, @JStein_WaPo, Twitter, 2/03/2021)

HOUSE SPEAKER NANCY PELOSI (D-CA): “I see everything as an opportunity. The bigger the challenge, the bigger the opportunity.” (MSNBC’s “All In with Chris Hayes,” 5/11/2020)

• SPEAKER PELOSI: “It’s a wonderful opportunity because I think our country is united in wanting to, not only address the immediate needs of the emergency and the mitigation for the assault on our lives and livelihoods, but also how we recover in a very positive way.” (“Democrats Eye Major Infrastructure Component In Next Coronavirus Package,” The Hill, 3/3/2020)

SEN. BOB MENENDEZ (D-NJ): “How many times are we going to get a shot at a trillion-dollar-plus program? … This rush, in a way that doesn’t get it right, is dangerous because I don’t know how many trillion-plus packages we are going to have.” (Sen. Menendez, Congressional Record, S.1910, 3/22/2020)

REP. PRAMILA JAYAPAL (D-WA), House Progressive Caucus Co-Chair: “So I think it depends on how you use the word leverage. For me, the leverage is that there is enormous suffering, and if we do not respond with the boldness and the scale that this crisis demands, then that suffering will continue. I think it’s important for us to not allow ourselves to be pulled into a place where we don’t define the agenda …” (“An Unusually Honest Conversation About Wielding Political Power, With Rep. Pramila Jayapal,” Vox, 5/06/2020)

FLASHBACK: RAHM EMANUEL, Former Obama White House Chief of Staff: “You never want a serious crisis to go to waste. And what I mean by that is an opportunity to do things that you think you could not do before.” (Remarks to Wall Street Journal CEO Council, 2008)