Politics

Biden economic advisor Bernstein defends Covid relief plan's $1.9 trillion price tag

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Key Points
  • Jared Bernstein, a longtime economic advisor to President Joe Biden, on Wednesday defended the size of the administration's $1.9 trillion stimulus package.
  • "Reconciliation doesn't mean no Republicans joined the plan," Bernstein said. "There's a lot of common ground when it comes to virus control, when it comes to helping businesses."
  • He said the bill could still attract bipartisan support even if Congress passes it using budget reconciliation, which requires only a simple majority.
  • Biden reportedly indicated on a call with House Democrats that he is open to sending $1,400 payments to a smaller group of Americans to garner broader support.
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Capital Exchange: The new economic agenda with CEA member Jared Bernstein

Jared Bernstein, a longtime economic advisor to President Joe Biden, on Wednesday defended the size of the administration's $1.9 trillion stimulus package amid disagreements with Republicans over state and local funding and other provisions.

A member of Biden's Council of Economic Advisors, Bernstein added that the bill, known as the American Rescue Package, could still pass with bipartisan support even if Democrats use a process that requires only a simple majority of senators.

"Reconciliation doesn't mean no Republicans joined the plan," Bernstein said in an interview with Kayla Tausche at a CNBC Capital Exchange event. "There's a lot of common ground when it comes to virus control, when it comes to helping businesses."

Bernstein, a labor-focused economist, served as Biden's chief economist when he was vice president under former President Barack Obama. He reiterated his view on Wednesday that, given the state of the U.S. economy, it would be riskier to pass too small a stimulus bill than one too large.

"The president is willing to exchange information and ideas in any way that accomplishes the goals he set out for this package. Not moving quickly, and not moving with the force to finally put this virus behind us and launch this recovery: That's the part that's not acceptable to him," the economist added.

Bernstein and others in favor of another big-ticket stimulus bill argue that Biden's plan would hasten the country's return to full employment and support the millions of Americans in the food-services, travel and hospitality industries that continue to struggle to find work.

According to the Labor Department's most recent jobless claims report, the total of Americans receiving unemployment benefits rose during the week that ended Jan. 23, jumping to 18.28 million.

Bernstein's comments also came as the Biden administration explores two politically perilous methods of passing another coronavirus relief package.

The first, touted as the bipartisan path, would shelve key provisions of the $1.9 trillion proposal in exchange for enough GOP support to pass the Senate with 60 votes. The other option, favored by many progressive politicians including Sen. Bernie Sanders, I-Vt., involves forcing the original $1.9 trillion through Congress through a budget tool known as reconciliation.

Biden's plan also enjoys overwhelming support among voters. A new Quinnipiac poll, released Wednesday, shows that more than two-thirds of voters favor the $1.9 trillion plan.

Reconciliation would allow Democrats to pass the measure with a simple majority and, as such, open the door to many of the agenda items included in the original plan that some Republicans oppose, such as the $15 minimum wage and funding for state and local governments. With Vice President Kamala Harris' tiebreaking vote, the Democrats have a razor-thin majority in the chamber.

Congressional Democrats began that process on Tuesday, when the Senate voted 50-49 along party lines to advance a budget resolution.

Though it remained unclear as of Wednesday afternoon which of the two paths the Biden team would ultimately endorse, the president himself said earlier in the day that he was still open to making changes to his plans to drum up bipartisan support.

Biden indicated on a call with House Democrats on Wednesday that he is open to sending $1,400 payments to a smaller group of Americans in the next round of relief legislation and editing the headline $1.9 trillion price tag, according to The Wall Street Journal.

The president has thus far remained opposed to changing the dollar figure on the stimulus checks, even if the payments are ultimately issued to a smaller group of U.S. workers.

Biden's economic team

As part of the Council of Economic Advisors, Bernstein and his Ph.D colleagues provide objective economic analysis to the president at regular briefings. Members of the CEA also issue an annual Economic Report of the President and seek to advocate for economic policies they think the president should consider.

Biden in November nominated Princeton economist Cecilia Rouse to lead the CEA. Should the Senate confirm her nomination, Rouse would be the first Black person to chair the council, which was created in 1946.

Asked how he and the rest of the CEA view the current state of the U.S. economy, Bernstein replied that he measures economic success by how equitably opportunity is spread to historically marginalized communities.

"The economy will not get back to full employment nearly quickly enough" without Biden's plan, Bernstein said. "You can't judge our plan, our success ... simply by looking at GDP. Not even by looking at the unemployment rate. Those things are necessary, but they are not sufficient."

"For far too many people, GDP growth has been a spectator sport for decades on end. And our policies have to recreate the connective tissue so that economic growth generates broadly shared prosperity and racial equity," he added.