Image for Congress Passes Mega-Spending Bill with Major Omissions

At last, Congress approved with bipartisan majorities a $900 billion coronavirus financial relief package, the second largest in US history, which may be remembered as much for what it excluded as included.

As part of 5,593-page measure that also included a $1.4 trillion omnibus spending bill for the current fiscal year that began October 1, the coronavirus financial relief package provides for: 

  • $600 stimulus checks to most Americans
  • $300 in enhanced weekly unemployment benefits for 11 weeks
  • $284 billion for another round of small business loans
  • $13 billion to enhance food nutrition benefits
  • $45 billion for public transportation and $1 billion for Amtrak
  • $25 billion for rental assistance
  • $15 billion for live venues
  • Billions for vaccine distribution and other COVID-19-related expenses.

Omitted from the package were larger stimulus checks, more generous unemployment benefits, inadequate food nutrition support to combat widespread hunger, any financial aid to state and local governments and legal immunity for businesses from coronavirus-related lawsuits. Economists questioned whether the package was big enough and long enough to ward off deeper recession, let alone stimulate economic recovery. President-elect Joe Biden called it a “down payment”. House Speaker Nancy Pelosi described it as the “first step”. Local government officials warned of more layoffs, including cutbacks in public school teachers.

Paul Ashworth, chief North America economist for Capital Economist, told The Washington Post, “It’s $900 billion, but it’s not a particularly well-designed package. It won’t include any direct transfers to state and local governments, which gets you the biggest bang for the buck.” The Congressional Budget Office found small business loans and direct stimulus checks in the previous CARES Act produced only a modest economic boost.  One analysis indicated only 40 percent of the earlier stimulus checks were actually spent.

The relief package was held up by at least a day when Senator Pat Toomey, R-Pennsylvania, demanded a provision to restrict Federal Reserve emergency powers. A watered-down version was included in the final package.

“It’s $900 billion, but it’s not a particularly well-designed package. It won’t include any direct transfers to state and local governments, which gets you the biggest bang for the buck.”

At the insistence of the White House, the relief package contains a tax break for 100 percent of corporate meal expenses, which was defended as a way to help restaurants, but was derided by critics as funding for “three-martini lunches”. Democrats agreed to the provision in return for expanded tax credits for low-income families.

The omnibus spending bill incorporates 12 appropriation bills covering the length and breadth of the federal government. House members had less than six hours to pore over the massive piece of legislation before voting. As usual, behind-the-scenes horse-trading led to multiple “add-ons”. 

White House approval of the mega-deal was contingent on adding another $1.5 billion for the US-Mexico border wall. Other add-ons include restricting the sale of e-cigarettes to minors, encouraging law enforcement agencies to report use-of-force incidents to a federal database and establishing Smithsonian museums for women’s history and American Latinos.

Tucked away in the corners of the spending bill were $110 billion in extended tax benefits over 10 years for alcohol producers, electric motorcycle manufacturers, wind energy generators and NASCAR. Reduced excise taxes for beer, wine and distilled spirit producers, which were part of the 2017 tax cut, were allowed to continue past their original expiration date. Oregon Senator Ron Wyden led the effort to extend the lower excise taxes, which he described as a vestige of the Prohibition era.

One silver lining in the stalemated spending bill is that the final compromise was shaped by a bipartisan group of Senate centrists. Some political observers say that approach to compromise may be useful to Biden in pushing his legislative agenda in the Senate, which may remain in control of the GOP and Majority Leader Mitch McConnell.