H.R. 1319: American Rescue Plan Act of 2021

As was expected, H.R. 1319 provides for $1,400 direct payments to individuals, dubbed “recovery rebates,” with an additional $1,400 for each dependent, and $2,800 for joint filers. These direct payments come on top of the original $1,000 and $600 payments from 2020. As with previous direct payment schemes, writing more checks to the American public is putting a band-aid on a bullet wound. These provisions do nothing to aid in reopening our economy or help unemployed Americans get back to work and often go to individuals who don’t need it, at the expense of those in our society who are truly hurting from this pandemic and its effects.

Similarly, this package includes another $128.5 billion in new aid for the Department of Education to disperse to the states, with no ties to reopening schools. This, in spite of the fact that there is still well over $50 billion in previous education funds unused from previous COVID relief bills. Much of this money is not even obligated to be spent within the next year or two, and does nothing to solve the basic problem that states and localities need to get kids back physically into classrooms as soon as possible (which the CDC has declared safe to do).

One of the most contentious sections of H.R. 1319 would more than double the federal minimum wage from $7.25 per hour to $15 per hour over the next five years. Doing so would undoubtedly place a heavy burden on small businesses, such as restaurants, that are already in dire straits due to government-mandated lockdowns. Beyond the policy reasons to oppose raising the federal minimum wage, including this provision in the budget reconciliation bill clearly violates the Byrd Rule, which is not just a rule — it is law. If Democrats want to raise the minimum wage, they should at least attempt do so through the proper legislative procedure, rather than attaching it inappropriately as a rider on must-pass budgetary measures.

In addition to the massive amount of federal dollars already spent to bail out state and local governments, H.R. 1319 gives away $219.8 billion to cover the costs of the COVID-19 pandemic and “address the negative economic impacts of such emergency.” Subtitle A of Title V provides $4.5 billion for territories, $20 billion for tribal governments, and $195.3 billion for the states and DC. This section also provides an additional $130.2 billion for local governments. These state and local bailouts are framed as “fiscal recovery funds,” despite the fact that they do nothing to solve the underlying fiscal issues faced by state and local governments, many of which predated COVID-19. Once again, Congress appears more willing to simply throw money we don’t have at an issue rather than addressing its root cause, and in the process, forcing taxpayers from fiscally responsible states to subsidize the fiscal mismanagement of blue states.

H.R. 1319 also provides an additional $10 billion to be used in the centralized planning and production of medical supplies under the Defense Production Act (DPA). Throughout this pandemic, attempts to centrally direct these supplies have repeatedly proven less effective than similar efforts by private actors, as exemplified most recently by the embarrassingly inefficient initial distribution of vaccines by federal and state authorities.