Biden's aid plan could revamp economy, prompt GOP resistance

[Image]( EMAIL}/redirect FRIDAY, JANUARY 15, 2021 | JOSH BOAK, AP ECONOMICS WRITER BALTIMORE (AP) — The $1.9 trillion rescue plan unveiled by President-elect Joe Biden offers the chance to sculpt the U.S. economy toward the Democrats’ liking: a $15 minimum wage, aid to poor families and federal dollars going to public schools. It’s an ambitious effort that would arrive after roughly $4 trillion has already been devoted to fighting the pandemic. But it could be quickly trimmed by congressional Republicans who are skeptical about raising the minimum wage and increasingly focused on the federal budget deficit that ballooned under President Donald Trump. “This is an opening bid. There is a sense from Republican staff that $1.9 trillion is a little rich,” said Bill Hoagland, a former Republican aide who is senior vice president of the Bipartisan Policy Center. “But President-elect Biden is an astute student of the Senate and negotiations and I have a feeling that they would expect this to be the top and not everything would be accepted.” Biden stressed in his Thursday speech announcing the plan that low interest rates mean the government should borrow now in hopes of having faster growth and a more stable financial outlook in the future. “If we invest now boldly, smartly and with unwavering focus on American workers and families, we will strengthen our economy, reduce inequity and put our nation’s long-term finances on the most sustainable course,” Biden said. The question is what elements of the Biden plan can win enough Republican votes to clear the evenly split Senate, where at least 60 votes will be needed. Without Republican buy-in, Biden’s proposal could pass with a simple majority under budget reconciliation -- but that's a time-consuming process that would limit what Democrats are able to accomplish. Florida Sen. Rick Scott, a Republican, attacked the plan Friday as an attempt to pass liberal policies and shuffle money to Democratic states with it's $350 billion in state and local government aid. EMAIL}/redirect EMAIL}/redirect “We cannot simply throw massive spending at this with no accountability to the current and future American taxpayer,” Scott said in a statement. The $15 minimum wage may be among the most controversial provisions. Many business groups and Republicans have historically opposed it. Matthew Haller, head of government relations for the International Franchise Association, noted that $15 wages would be relatively high in parts of rural Georgia and West Virginia, both states that will be represented by Democratic senators. But, more importantly, the coronavirus outbreak has crushed sales at restaurants and small retailers that might be forced to close if they face higher labor costs. “It’s the straw that breaks the camel’s back,” Haller said. Nor have projections about stable federal budgets proven to be accurate in the past. After reviewing the Biden plan, Marc Goldwein, senior vice president at the Committee for a Responsible Federal Budget, doubted that the additional spending would cause enough growth to shore up the federal government's long-term finances. EMAIL}/redirect EMAIL}/redirect “More stimulus and support will improve the economic outlook, and that alone may make it worth it,” he said. “But it is very unlikely that the greater borrowing will improve the fiscal outlook." The Biden plan conforms to the view that the federal government can reduce economic inequality and fuel growth by increasing spending on social services and sending cash directly to households. It would provide direct payments of $1,400 per person to eligible households, temporarily expand tax credits for children and childcare, help childcare providers and enhance jobless benefits and food aid. There would be $400 billion to get the nation vaccinated, including $130 billion that could help schools safely reopen with smaller classes or better ventilation systems. The array of spending in the Biden plan would halve the child poverty rate to 6.6%, the lowest level ever based on records going back to 1967, according to estimates from researchers at Columbia University. “Lifting millions of families out of poverty even for one year can have beneficial long-term consequences for the affected children,” said Zach Parolin, one of the researchers at Columbia. There is also the possibility that the Biden plan could lead to lasting changes in the social safety net. By temporarily making the child tax credit fully refundable, families who don’t earn enough money to owe federal income taxes would still qualify for the maximum benefit, which the plan would increase to $3000 per year per child, more for children under age 6. “It’s a reasonable question why more hasn’t been done on this previously,” said Melissa Kearney, an economist at the University of Maryland. “Perhaps it took this pandemic to make the economic suffering of poor families - and the moral and economic cost of that - glaringly obvious.” But Biden is only providing the framework for negotiations, rather than a finished product and much of the promised benefits could be diluted. Alec Phillips, an economist with Goldman Sachs, expects there to ultimately be $1.1 trillion in relief, about 60% of what Biden outlined Thursday. The challenge is that Senate Democrats would likely need to rely on the reconciliation process to avoid the risk of filibusters from Republicans. Without reconciliation, Biden would need 60 votes. Reconciliation, which requires a simple majority, has never been used for discretionary spending, a category that would appear to include the state fiscal aid, education grants and public health spending proposed by Biden, Phillips said in an analyst note. “We do not expect ten Republicans to support a $1.9 trillion relief package,” he said. “While it is possible that congressional Democrats might find a way to do this, it looks more likely that the need to find bipartisan support might constrain the size of the package.” EMAIL}/redirect EMAIL}/redirect © 2020 PTE.la PTE, LLC (publisher of PTE.la) is NOT registered as an investment adviser nor a broker/dealer with either the U. S. Securities & Exchange Commission or any state securities regulatory authority. Users of this website are advised that all information presented on this website is solely for informational purposes, is not intended to be used as a personalized investment recommendation, and is not attuned to any specific portfolio or to any user's particular investment needs or objectives. Past performance is NOT indicative of future results. Furthermore, such information is not to be construed as an offer to sell or the solicitation of an offer to buy, nor is it to be construed as a recommendation to buy, hold or sell (short or otherwise) any security. All users of this website must determine for themselves what specific investments to make or not make and are urged to consult with their own independent financial advisors with respect to any investment decision. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. All opinions, analyses and information included on this website are based on sources believed to be reliable and written in good faith, but should be independently verified, and no representation or warranty of any kind, express or implied, is made, including but not limited to any representation or warranty concerning accuracy, completeness, correctness, timeliness or appropriateness. In addition, we undertake no responsibility to notify such opinions, analyses or information or to keep such opinions, analyses or information current. Also be aware that owners, employees and writers of and for PTE, LLC may have long or short positions in securities that may be discussed on this website or newsletter. Past results are not indicative of future profits. This table is accurate, though not every trade is represented. Profits and losses reported are simulated figures from virtual simulated portfolios. We are engaged in the business of advertising and promoting companies for monetary compensation. All content in our releases is for informational purposes only and should not be construed as an offer or solicitation of an offer to buy or sell securities. Neither the information presented nor any statement or expression of opinion, or any other matter herein, directly or indirectly constitutes a solicitation of the purchase or sale of any securities. PTE.la’s sponsored advertisements do not purport to provide an analysis of any company’s financial position, operations or prospects and this is not to be construed as are commendation by PTE.la or an offer or solicitation to buy or sell any security. Neither the owner of PTE.la nor any of its members, officers, directors, contractors or employees is licensed broker-dealers, account representatives, market makers, investment bankers, investment advisors, analyst or underwriters. Investing in securities, including the securities of those companies profiled or discussed on this website is for individuals tolerant of high risks. Viewers should always consult with alicensed securities professional before purchasing or selling any securities of companies profiled or discussed in our releases. It is possible that a viewer’s entire investment may be lost or impaired due to the speculative nature of the companies profiled. Remember, never invest in any security of a company profiled or discussed in a release or on our website unless you can afford to lose your entire investment. Also, investing in micro-cap securities is highly speculative and carries an extremely high degree of risk. To review our complete disclaimer and additional information, please visit . PTE.la makes no recommendation that the securities of the companies profiled or discussed in our releases or on our website should be purchased, sold or held by investors. PTE.la is owned and operated by PTE LLC. PTE LLC has not been compensated for this specific email, we do have advertisements in this email that we get paid if you click one of the ads (we have not investigated any of the advertisements). Any compensation received by PTE LLC constitutes a conflict of interest as to our ability to remain objective in our communication regarding the profiled company. A third party of PTE LLC may have shares and may liquidate, which may negatively affect the stock price. PTE LLC affiliates may at any time have a position in the securities mentioned herein and may increase or decrease such positions without notice which will negatively affect the market. Some of the content in this release contains forward - looking information within the meaning of Section 27 A of the Securities Act of 1 9 9 3 and Section 21 E of the Securities Exchange Act of 1 9 3 4 including statements regarding expected continual growth of the profiled company and the value of its securities. In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 it is hereby noted that statements contained herein that look forward in time which include everything other than historical information, involve risk and uncertainties that may affect a company's actual results of operation. A company's actual performance could greatly differ from those described in any forward - looking statements or announcements mentioned in this release. Factors that should be considered that could cause actual results to differ include: the size and growth of the market for the company's products; the company's ability to fund its capital requirements in the near term and in the long term; pricing pressures; unforeseen and/or unexpected circumstances in happenings; etc. and the risk factors and other factors set forth in the company’s filings with the Securities and Exchange Commission. However, acompany’s past performance does not guarantee future results. Generally, the information regarding a company profiled is provided from public sources which we believe to be reliable but is not guaranteed by us as being accurate. Further specific financial information, filings and disclosures as well as general investor information about the profiled company, advice to investors and other investor resources are available at the Securities and Exchange Commission (“SEC”) website www.sec.gov and the Financial Industry Regulatory Authority (“FINRA”) website at www.finra.org. Any investment should be made only after consulting with a qualified investment advisor and reviewing the publicly available financial statement and other information about the company profiled and verifying that the investment is appropriate and suitable. PTE.la makes no representations, warranties or guarantees as to the accuracy or completeness of the information provided or discussed. Viewers should not rely solely on the information obtained in this release or on our website. PTE Team 9 Downing street Newark NJ 07105 USA [Unsubscribe]( [Change subscriber options](