{"id":191161,"date":"2021-03-05T12:30:14","date_gmt":"2021-03-05T17:30:14","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=191161"},"modified":"2021-03-05T12:30:16","modified_gmt":"2021-03-05T17:30:16","slug":"comparing-trump-and-bidens-covid-relief-bills","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/comparing-trump-and-bidens-covid-relief-bills\/","title":{"rendered":"Comparing Trump And Biden\u2019s COVID Relief Bills"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">14<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fcomparing-trump-and-bidens-covid-relief-bills%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=191161&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div><img decoding=\"async\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2021\/03\/F3049F04-ED69-4E60-A0AB-D61157E7443A-1200x800-1.jpeg\" class=\"ff-og-image-inserted\" \/><\/div>\n<p><span>The final year of President Trump\u2019s administration was marked by the passage of an enormous COVID-19 relief bill. In the first weeks of his administration, President Biden is attempting to sign a similar measure into law.<\/span><\/p>\n<p><span>On March 27, 2020, President Trump signed the<\/span> <a href=\"https:\/\/www.congress.gov\/bill\/116th-congress\/senate-bill\/3548\/all-actions\"><span>Coronavirus Aid, Relief, and Economic Security (CARES) Act<\/span><\/a><span>, which pumped $2.3 trillion into COVID-19 relief programs, an economic stimulus, education, and subsidies for various American industries.<\/span><\/p>\n<p><span>Now, the United States Senate is currently debating President Biden\u2019s $1.9 trillion<\/span> <a href=\"https:\/\/www.congress.gov\/bill\/117th-congress\/house-bill\/1319?q=%7B%22search%22%3A%5B%22american+rescue+plan%22%5D%7D&amp;s=4&amp;r=1\"><span>American Rescue Plan<\/span><\/a><span>, which<\/span> <a href=\"https:\/\/www.dailywire.com\/news\/bidens-covid-relief-plan-where-is-the-money-actually-going\"><span>seeks<\/span><\/a> <span>to provide an economic stimulus through additional relief and subsidies. The omnibus legislation passed the House of Representatives in late February.<\/span><\/p>\n<p><span>A White House<\/span> <a href=\"https:\/\/www.whitehouse.gov\/briefing-room\/legislation\/2021\/01\/20\/president-biden-announces-american-rescue-plan\/\"><span>press release<\/span><\/a> <span>states that the American Rescue Plan \u201cis ambitious, but achievable, and will rescue the American economy and start beating the virus.\u201d The Biden administration emphasizes the bill\u2019s aim to \u201chelp working families, communities, and small businesses persevere through the pandemic.\u201d<\/span><\/p>\n<p><span>The<\/span> <a href=\"https:\/\/budgetmodel.wharton.upenn.edu\/what-we-do\"><span>Penn Wharton Budget Model<\/span><\/a> <span>(PWBM) \u2014 an initiative of the University of Pennsylvania\u2019s Wharton School that provides nonpartisan analysis of the economic impact of landmark public policy proposals \u2014 weighed the effects of both the<\/span> <a href=\"https:\/\/budgetmodel.wharton.upenn.edu\/issues\/2020\/4\/8\/short-run-effects-of-the-cares-act\"><span>CARES Act<\/span><\/a> <span>and the<\/span> <a href=\"https:\/\/budgetmodel.wharton.upenn.edu\/issues\/2021\/2\/3\/macroeconomic-effects-of-19-trillion-biden-covid-relief-plan\"><span>American Rescue Plan<\/span><\/a><span>.&nbsp;<\/span><\/p>\n<p><span>For a variety of reasons, the analyses show that Biden\u2019s bill does not measure up to that of his predecessor.<\/span><\/p>\n<p><strong>GDP<\/strong><\/p>\n<p><span><em><span>CARES Act<\/span><\/em><\/span><\/p>\n<p><span>The Penn Wharton Budget Model predicted that the CARES Act would help to significantly slow the drop in America\u2019s gross domestic product (GDP) \u2014 an economic measure that reflects the total output of an economy.<\/span><\/p>\n<p><span>Without the CARES Act, PWBM projected that the United States GDP in 2020 would plummet 37% on an annualized basis. With the CARES Act, PWBM initially anticipated that the drop in output would only reach 30% \u2014 a 7% improvement over the base scenario. However, a later<\/span> <a href=\"https:\/\/budgetmodel.wharton.upenn.edu\/estimates\/2020\/5\/5\/long-run-economic-effects-of-cares-act?rq=cares%20act\"><span>update<\/span><\/a> <span>revised this estimate to a 5% improvement.<\/span><\/p>\n<p><span>When federal, state, and local governments borrow excessively, public debt \u201ccrowds out\u201d productive investments. In other words, investors purchase government debt instead of financing private companies\u2019 ventures, which limits the economic growth that would have resulted from higher production and innovation.&nbsp;<\/span><\/p>\n<p><span>In the long-term, PWBM\u2019s update predicted that the CARES Act would lower GDP by 0.2% within the next decade as a result of increased government debt.&nbsp;<\/span><\/p>\n<p><span>To complete the analysis, PWBM used \u201cfiscal multipliers\u201d \u2014 a figure meant to capture the \u201camount of additional output generated for each dollar of government spending\u201d \u2014 to forecast the effects of the CARES Act allocations. Analysts used the same multipliers created by the Congressional Budget Office to measure the American Reinvestment and Recovery Act of 2009 \u2014 another economic stimulus package enacted during a severe recession.<\/span><\/p>\n<p><span><em><span>American Rescue Plan<\/span><\/em><\/span><\/p>\n<p><span>Though the two relief packages are of comparable sizes, PWBM predicts a much more modest boost to output from the American Rescue Plan.<\/span><\/p>\n<p><span>PWBM anticipates that President Biden\u2019s legislation would increase GDP by 0.6% in the short term, while decreasing GDP by 0.3% over the next two decades due to the \u201ccrowding out\u201d effect.<\/span><\/p>\n<p><span>The primary source of the disparity arises from the fact that the American economy was in far worse a state during the spring of 2020. In comparison to recovery periods and more normal economic conditions, government spending has a much stronger effect upon output during the troughs of deep recessions.&nbsp;<\/span><\/p>\n<p><span>As PWBM notes about the current economic status of the United States, \u201cunemployment has been disproportionately concentrated among lower wage and young workers in specific sectors\u201d and \u201cmost sectors of the economy now appear to be operating at near pre-recession levels.\u201d Affected sectors are primarily limited in recovery due to \u201cpandemic behaviors and policy restrictions which affect both consumption and production.\u201d<\/span><\/p>\n<p><span>\u201cBroadly, the economy is near full employment with some sectors strictly idled for the near-term,\u201d the analysts added.<\/span><\/p>\n<p><span>When analyzing the American Rescue Plan, PWBM applied fiscal multipliers used by the Congressional Budget Office when output is \u201cclose to potential\u201d rather than fiscal multipliers useful when output is \u201cwell below potential.\u201d&nbsp;<\/span><\/p>\n<p><span>The CARES Act is therefore a more effective spending package than the American Rescue Plan largely because of its timing. President Trump\u2019s legislation was enacted at a more appropriate period in the business cycle for government stimulus measures: the worst part of a severe recession.&nbsp;<\/span><\/p>\n<p><strong>Government Bailouts<\/strong><\/p>\n<p><span><em><span>CARES Act<\/span><\/em><\/span><\/p>\n<p><span>President Trump\u2019s COVID-19 relief package provided $150 billion \u2014 equivalent to 6.5% of the bill\u2019s expenses \u2014 toward direct aid to local and state governments.&nbsp;<\/span><\/p>\n<p><span>According to the Penn Wharton Budget Model, these allocations were meant to \u201cincrease spending from state governments scrambling to mount a fiscal response to coronavirus outbreaks.\u201d In comparison to other portions of the CARES Act, PWBM expected the bailouts to perform among the weakest in terms of boosting economic output. Analysts anticipated the $150 billion in bailouts to increase GDP by $105 billion over the next two years.<\/span><\/p>\n<p><span><em><span>American Rescue Plan<\/span><\/em><\/span><\/p>\n<p><span>Ignoring the lackluster effect of government bailouts upon economic growth, the American Rescue Plan devotes $350 billion to state and local governments \u2014 a figure representing 18.4% of the legislation\u2019s total, as well as a 233% increase over the CARES Act\u2019s allocation in the same category.<\/span><\/p>\n<p><span>Democrats in Congress have been aggressive in their attempts to increase government bailouts through omnibus spending packages.<\/span><\/p>\n<p><span>For instance, the Democrat-controlled House of Representatives passed the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act in May of 2020. One-third of the $3 trillion package was earmarked for bailing out state and local governments.<\/span><\/p>\n<p><span>After backlash from Republicans, Speaker Pelosi proposed an updated<\/span> <a href=\"https:\/\/www.speaker.gov\/newsroom\/92820-0\"><span>version<\/span><\/a> <span>of the HEROES Act in September of 2020. The new proposal reduced overall spending to $2.2 trillion \u2014 a revision largely caused by state and government handouts falling from nearly $1 trillion to $436 billion.<\/span><\/p>\n<p><span>The Democrats\u2019 emphasis on government bailouts leads their spending bills into the same pitfall \u2014 failing to spend stimulus dollars in manners that meaningfully boost GDP.<\/span><\/p>\n<p><span>As PWBM explains, \u201cthe greatest multipliers are attached to provisions that provide money for government purchases and transfers of cash into low-income and recently unemployed households.\u201d&nbsp;<\/span><\/p>\n<p><span>\u201cThese types of programs typically get cash into the hands of households who are most likely to spend it quickly, which generates the most aggregate demand and the greatest stimulative effect,\u201d noted the analysts. \u201cBy contrast, putting money into the hands of people and institutions who are more likely to save it is not as likely to generate an immediate short-term boost to the demand for goods and services.\u201d<\/span><\/p>\n<p><span>President Biden\u2019s American Rescue Plan is limited in its macroeconomic effects partly because it allocates money to sectors that do not contribute to short-term economic growth.<\/span><\/p>\n<p><em>The views expressed in this piece are the author\u2019s own and do not necessarily represent those of The Daily Wire.<\/em><\/p>\n<p><em>The Daily Wire is one of America\u2019s fastest-growing conservative media companies and counter-cultural outlets for news, opinion, and entertainment. Get inside access to The Daily Wire by becoming a&nbsp;<\/em><a href=\"https:\/\/www.dailywire.com\/subscribe\"><em>member<\/em><\/a><em>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The final year of President Trump\u2019s administration was marked by the passage of an enormous COVID-19 relief bill. In the first weeks of his administration, President Biden is attempting to &#8230;<\/p>\n","protected":false},"author":1,"featured_media":1888282,"comment_status":"close","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-191161","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/191161","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=191161"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/191161\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1888282"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=191161"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=191161"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=191161"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}