The House may have passed President Biden’s $1.9 trillion stimulus bill (along strictly partisan lines), but the economic case for the bill is collapsing. It remains likely to become law—dragged over the finish line in a partisan vote stuffed with payoffs to keep all Democratic lawmakers on board. But as new information contradicts and undermines the bill’s intended purpose, the exercise has become more about saving face and showing partisan unity than intelligently addressing the pandemic and recession.
The bill has grown too large for three reasons. On economics, liberals have come to believe that the Great Recession’s slow recovery was due to insufficient stimulus spending, and have vastly overcorrected. On politics, Democrats remain committed to the $3 trillion price tag they demanded last fall (net of the $900 billion legislation enacted in December)—despite an improving economy requiring much less aid—because scaling it back would mean compromising with Republicans they detest. And on policy, the bill provides an opening to create permanent new government expansions and spread benefits to their popular constituencies like state governments and unions.
Yet this $1.9 trillion would bring total pandemic-response spending to $5.4 trillion in just 12 months—which will comprise one-fifth of the entire national debt—with rapidly declining effectiveness.