Mitt Romney Explains Biden’s Stimulus Bill Is a $1.9 Trillion Clunker

Mish

President Biden is using Covid as an excuse to foster more liberal spending waste. Let's investigate Biden's proposal vs what should be done.

Mitt Romney wrote an accurate Op-Ed for the WSJ explaining why Biden’s Stimulus Bill Is a $1.9 Trillion Clunker. 

Key Clunker Points

  • The Congressional Budget Office’s recent analysis of the plan found that more than a third of the proposed funding—$700 billion—wouldn’t be spent until 2022
  • Sending out checks won’t get consumers back into restaurants, bars, salons, malls, hotels or airplanes.
  • The bill is filled with bad policies and sloppy math. It calls for $350 billion for states and localities. Florida hasn’t even had to dip into its rainy-day fund. California has a multibillion-dollar surplus. Utah’s revenues rose by double digits. JP Morgan found that 21 states had revenue increases in 2020. Other states drew on rainy-day funds—which is what they are there for.
  • Most local tax revenue comes from property taxes, which are far less volatile than sales or income taxes. Sending out hundreds of billions of dollars to states and localities regardless of need is both wasteful and harmful. It would create incentives for the mismanagement that got some states into fiscal trouble in the first place.
  • The Biden stimulus calls for $170 billion for education yet has no realistic plan to reopen K-12 schools. Further, of the $80 billion Congress has already authorized for education, $68 billion hasn’t yet been used by schools and universities. 
  • Stunningly, the CBO says only 4% of the K-12 spending in the Biden bill would occur in 2021 and that some education and labor funds would remain unspent in 2029, after a potential Biden second term.

What Romney Does Support

  • Expanded Covid testing
  • Accelerate vaccine delivery and support health providers. 
  • Robust assistance for those who have been crushed financially by the pandemic, including by losing their jobs. 
  • Aid to students and parents to spend on tuition at schools that are open or on tutors, summer programs or home-school efforts. 

Romney noted that a group of Republican Senators proposed a $618 billion compromise measure that matched President Biden’s proposed health and vaccine funding, extended enhanced federal unemployment benefits, provided economic relief for those with the greatest need, and included nutrition funding, small-business assistance, and resources to get children safely back to school.

"We can’t let unreasonable demands by teachers unions keep schools closed that can safely reopen," said Romney.

Bingo on all accounts.

Kill the Bill

President Biden is using Covid as an excuse to shotgun spending and waste money. 

His real goal is to funnel money to liberal states that have serious policy errors that ought to be rectified. 

I suggest we kill this latest "Cash for Clunkers" fiasco.

For the Record

Mish

Comments (71)
No. 1-17
4IronFan
4IronFan

NY, Washington & Illinois, first COVID hit states experienced extreme loss of revenue via sales, property, unemployment and other increased welfare requirements. They should receive significant federal funds. I agree those states that did not experience shortfalls shouldn’t receive funding but that’s not how the Senate previously chose to allocate state funding.

Quanta
Quanta

At least the money will go to the people regardless of the waste. All the GOP tax cuts were spent on CEO salaries and stock buybacks. And don't even get me started on the Iraq War.

Sechel
Sechel

Sounds like Romney wants a covid relief bill to focus on Covid. Novel idea.
Personally I think some of the Democratic agenda doesn't make a whole lot of sense unless you look at their bigger picture which is delivering for the progressive wing of the party on some items. Aid to state and local economies can be justified on the employment side. It seems Ok to provide funds for airlines and farmers but not the governments. All those shut airlines and restaurants aren't paying taxes. State an local government's don't have the luxury of printing money and running deficits like the Federal government. But items like the increase in minimum wage just don't belong

Quanta
Quanta

The numbers for schools are laughable. $80Billion. How much money do YOU PEOPLE think it takes to run American schools? How about 5 Trillion dollars for schools and nothing else?
Old timers got their education for free , and now complain that millennials can't make ends meet because of financializations of the education industry.
YES - the states governments should run the schools, not private interests.

Quanta
Quanta

"The package includes $1,400 direct payments to most Americans, a $400 per week jobless benefit supplement and an extension of programs making millions more Americans eligible for unemployment insurance. It also puts $20 billion into Covid-19 vaccinations, $50 billion into testing, and $350 billion into state, local and tribal government relief.

The plan as of now would hike the federal minimum wage to $15 an hour by 2025. "

Makes sense to me. I don't have a problem with anything here.

10 Replies

TexasTim65
TexasTim65

Guess you didn't read the article. Many state / local governments don't need any relief money.

Hiking the federal minimum wage is terrible. Minimum wage should be set at the state level (ideally at the county or city level) so it can be based on local living expense. A federal minimum wage is the equivalent of the gov't taking over the shoe business and deciding that everyone gets a size 10 shoe regardless of foot size.

Quanta
Quanta

" Hiking the federal minimum wage is terrible."
No it's not. You imbeciles in Texas have the audacity to pay minimum cash wage of $2.13 USD per hour to restaurant employees. And you call yourself an advanced society thanks to low business taxes? How unbecoming. The combined cash & tips is supposed to be $7.25, but many business do not compensate for the difference in Texas, and it's hard to contest. Welcome to a red state that thinks paying > $2 USD per hour is Communism.

Here in CA - it's $13-$14 minimum cash wage, and tips are extra on top as supposed to be. Contesting is super easy.

Last time I checked, Amazon prices for toothpaste were the same in both states. Aka basket of goods is similar cost.

California has a housing shortage - that's the only aspect of CA that makes this state super expensive. Everything else is comparable. The lack of housing is solely because of state regulations - yep CA has it's share of problems.

Quanta
Quanta

"don't need any relief money." that's the spin GOP wants to put on it.
I live in CA and because CA can't print California's own currency, the state is in emergency need for many billions of dollars of various gov't services. I don't want this to be about CA only - any state should get a large infusion of the only currency that is legal tender here, USD from Uncle Sam. At least if we get that money, we will know that isn't going to be spent bombing a bunch of innocent civilians in the Middle East for Chevron to operate the oil.

TexasTim65
TexasTim65

It's not just housing that's way more expensive. It's also gas which makes transporting goods more costly. Your child care costs are also WAY higher because your labor costs are higher and so on. That includes labor for plumbing, electricians, doctors etc.

Don't just use Amazon as a way to compare prices. Things are often much cheaper elsewhere than they are on Amazon (ie dollar store etc). You use Amazon for access to things you might not have locally or for Prime Delivery.

In small town Texas you can still live a nice lifestyle on $8/hr jobs (I know many parents who both make that and own a nice modest home because they still cost 80K). At the same time costs in Dallas/Austin/Houston are higher and so are wages.

I have no problem if CA wants (or has) to have expensive everything. But please don't push it on the rest of us (and despite my screen name, I currently live in FL, another place that doesn't want 15/hr for the same reasons).

Quanta
Quanta

Wife and I spend $40/car every 3 weeks on gas , we both drive Priuses. In contrast we spend $3000 / mo on rent, and $4000 / mo on daycare (2 kids). Gas is two orders of magnitude lower, expense wise.
Shipping of bulk dry goods via ocean liners from China is cheaper to CA Long Beach than anything from China to TX, so a lot of those items are cheaper also.

I understand you're coming up with a capitalist argument of "children or future of others are not my expenses". That argument is flawed. If United States undermines it's young (as it has done for the last 50 years) and middle class, then it's days are numbered.

Capitalism both gives and takes from society. The argument of capitalists always focuses on what capitalism "gives" to us, and rarely talks about what it "takes".
It takes the skills of the population, it also can have environmental impact, etc...
We need to spend more attention to what capitalism actually "consumes" - and thet we can have a better society.

I fully support the federal government establishing a minimum wage baseline, and if states want to go above that, great.

TexasTim65
TexasTim65

4K a month. Wow. It better be doing a lot more than just babysitting. In small town Texas where my wife's family is from you can get daycare for 1 kid for ~600 a month and far cheaper (~400 a month) if you just want a babysitter for 8 hours a day. Mortgage costs are 450ish a month for a 100K mortgage. You'd be surprised to find goods cheaper there than in Cali too because they don't have to pay 15-20 hr for employees.

That means 2 people making 8/hr brings in just over 2500 a month with 1500 worth of expenses with 2 kids and a mortgage. I understand where you live you need to make 3-4x the money people there need but try to understand that not everywhere in the USA is anything close to what you experience.

I support minimum wage at the state and preferably the county/city level.

Quanta
Quanta

It's $2K per month, we have 2 kids in there so $4k. It's a well run daycare / kindergarten - can only be used by employees of my employer (large multinational, 80k headcount).

"Mortgage costs are 450ish a month for a 100K mortgage." - that's where the main delta is, housing here is $400k even in small town, e.g. Modesto, CA for 1500sq ft. Silicon Valley is 1.5M+

There are many assets, e.g. new car, that $8/hr cannot easily enable.

Your calculation of $8/hr * 40*4 = $1280 monthly income / person a month income does not include fed, state, medicare taxes etc... For our family we lose around 50% of gross to various taxes, including CA taxes, and ignoring 401k. There are no credits for children at all, sink or swim and it's $50k / year expenses for kids anyway.

Even by basic estimates $8/hr is not livable on in TX. One emergency away from disaster, and no savings for future, and no savings for childrens expenses.

Quanta
Quanta

I support minimum wage at both federal and state and county / city level. That allows federal entities to tweak investment levels in different categories (e.g. increase investment in the poor). Texas is a primary example of why it should not be state only, but must be a federal level as well. Texas is a state who's politics until recent urbanization has been overrun by business interests (oil) and has had no progress on minimum wage and social safety nets. Without the federal government, they wouldn't even have the $2.14/hr that's mandated now. At the same time, Texas , like California has a vast population of immigrants from Mexico and Latin America that barely scrapes by, whether legally immigrated or not. We don't want ppl living in poverty, it's a self perpetuating state and nothing good comes of it.

TexasTim65
TexasTim65

There are no state taxes in Texas.

Also for married filing jointly, the standard deduction is 24800. That couple only makes 30K combined so they pay zero taxes on 24800 of it. They certainly get the child tax credit too. In other words they are paying a ZERO tax rate and keeping 100% of their income. That's why I said they have everything left to spend after paying for child care and mortgage.

Yes, they are one emergency away, but that describes probably 90% of America.

Toocyl
Toocyl

Yet, California residents are moving to the land of imbeciles more and more every day! That should solve your housing shortage!!

KidHorn
KidHorn

There's no chance the republican proposal passes. The whole point of the covid relief bill is the added pork. The covid part is just a cover for what they really want.

amigator
amigator

And it will pass nothing the Repubs can do. This is JB using his bringing together with bipartisanship BS. I love this country!

Quanta
Quanta

Trump and the GOP could have used their power to help regular Americans in 2020, and had they done so, they would have won the election. Instead they spent most of 2020 denying science, and didn't do much of anything.
Now Joe & Dems are going to get this major relief through, and get all the credit for it. Good job and way to go JB & Dems.
GOP losers had their chance in 2020, and didn't take advantage of it. How dumb do you have to be, to NOT use a crisis to your political advantage when you're in power?

Doug78
Doug78

Romney is an amalgam of all that is bad in the Republican Party. Anything he says is not worth reading.

numike
numike

when do I get my check??

Sechel
Sechel

When it's what the other guy wants its waste. When its what you want its investment

PecuniaNonOlet
PecuniaNonOlet

Another big box retailer bites the dust. Stimulus or no, retail, like boomers, are becoming extinct over the next decade. Long live Amazon!

Rbm
Rbm

Its all a game. Republicans cut taxes and then complain we cant afford this or that. Dems add programs. Both put us in debt. Everyone complains when someone else is getting a govment hand out. I just want tax money spent wisely but thats never gonna happen.

Casual_Observer
Casual_Observer

Oh those poor Republicans (insurrectionists). They can go GFT.

oee
oee

it is simply replacing lost demand due to the lockdowns due to Corona Virus. if you did not notice, the economy contracted 2.50% is 2020, and the economy has 10 million fewer jobs than at the beginning of the pandemic. the economy does not self-heal. there has been never a situation in which an economy healed by itself.

JoeJohnson
JoeJohnson

I do not take anything seriously said by Romney, the liberal wing of the GOP

purple squish
purple squish

I've never liked Romney, the quintessential corporatist warmonger oligarch. However, his take on this is completely reasonable. Far better than the other crap that has more than a snowball's chance in hell of passing, anyway. Kudos to Mish and some of the commentariat here who can see past both the R or D and the person's name and just evaluate what's being said.


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