Biden and top economic officials stress urgency of more coronavirus aid

President Joe Biden and Vice President Kamala Harris during an economic briefing with Treasury Secretary Janet Yellen on Jan 29, 2021. PHOTO: NYTIMES

WASHINGTON (NYTIMES) - US President Joe Biden and his top economic aides brushed aside criticism from Republicans Friday (Jan 29) about the administration's US$1.9 trillion (S$2.53 trillion) stimulus package and vowed to forge ahead with the proposal, saying the Bill was critical for a flagging economic recovery and overwhelmingly popular with voters.

The comments came as Mr Biden was briefed by aides on the need for more fiscal help and the state of the economy, and as new analysis from the Brookings Institution suggested that the Biden proposal, if enacted, would vault the economy above its pre-pandemic path by the second half of this year.

A team of top economic officials, including Treasury Secretary Janet Yellen, met with Mr Biden and Vice-President Kamala Harris in the Oval Office on Friday to underscore the challenges facing an economy that recorded decelerating growth at the end of last year. They were joined by Mr Brian Deese, director of the National Economic Council, and Mr Jared Bernstein and Ms Heather Boushey of the Council of Economic Advisers.

"The price of doing nothing is much higher than the price of doing something and doing something big," Ms Yellen said before the briefing. "We need to act now. The benefits of acting now and acting big will far outweigh the costs in the long run."

Mr Biden, who has spent the first days of his presidency calling for more economic help, said the pandemic legislation was his top priority. "People are going to be badly, badly hurt if we don't pass this package," he said.

Even as states have begun to vaccinate vulnerable populations, the economic recovery from the pandemic is showing signs of slowing, fuelling concerns among White House officials that time is running short to pass a robust package before some emergency benefits expire in March.

Those officials are increasingly saying that Congress must move swiftly to approve a package of a scope similar to what Mr Biden is proposing, although they acknowledge privately that the process of congressional negotiations could produce a Bill with a lower price tag than the president has called for.

To help win support, particularly among Republicans, they are making the case that Mr Biden's proposal polls strongly across party lines.

"A fair question you might ask our GOP or Republican colleagues is why they oppose proposals that have the support of 74 per cent of the American public," the White House press secretary Jen Psaki told reporters Friday. She cited a recent Monmouth University poll in which 71 per cent of respondents said it was important for Republicans to find ways to work with Mr Biden.

Democrats in Congress say they are continuing to work with Republicans on a potentially bipartisan Bill, but they are also preparing a parliamentary manoeuvre known as budget reconciliation that would allow them to pass a Bill with a simple majority, as Republicans did with their 2017 tax cut law and their failed attempt to repeal the Affordable Care Act.

"I'm not going to let Republican senators stall for the sole purpose of stalling," Senator Ron Wyden of Oregon, incoming Democratic chairman of the Senate Finance Committee, said Thursday on a conference call hosted by the advocacy group Invest for America.

Despite White House pressure, Republicans have complained in recent days that using the reconciliation process would undermine Mr Biden's calls for unity.

On Friday afternoon, as he was departing the White House to visit Walter Reed National Military Medical Centre, Mr Biden said he still hoped that Republicans would support a relief bill, but he signaled that Democrats would move forward on their own if they must.

"I support passing Covid relief with support from Republicans if we get it, but the Covid relief has to pass," he said.

New analyses this week suggest that Mr Biden's plans, if enacted, could significantly lift an economy that has only partly rebounded from its rapid fall into recession last spring.

Two researchers at the Brookings Institution, Ms Wendy Edelberg and Ms Louise Sheiner, wrote this week that Mr Biden's plans would increase economic activity by 4 per cent this year and 2 per cent in 2022. That increase would speed the economy's return to the path it was on before the pandemic hit.

Without another aid package, they estimate, the economy would remain smaller by the end of 2023 than it would have if the recession had never occurred. But if the package is enacted, they predicted, the economy would be larger by the fall than it would have been on its prepandemic path. They caution that those forecasts are subject to a great deal of uncertainty.

"Without additional federal resources to contain the resurgence of the pandemic and distribute vaccines, the economy will face substantial headwinds," Ms Edelberg and Ms Sheiner wrote. "More broadly, millions of households will suffer as a result of waning fiscal support for the unemployed and households and businesses suffering financially."

The International Monetary Fund projected small, but still positive, effects from the Biden plan this week. It estimated Mr Biden's proposal would bolster US economic output by 5 per cent over three years. The fund estimated that the plan would increase output this year by 1.25 per cent.

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