Why Joe Biden Wants to Go Big on a Stimulus Package – By Michael Rainey (The Fiscal Times) / Sept 15 2020
Some Democratic economic policy wonks have long believed they made a serious mistake during the Great Recession: The $787 billion stimulus package President Barack Obama signed into law in 2009 just wasn’t big enough relative to the size of the crisis at hand. According to Politico’s Ben White, former Vice President Joe Biden is determined not to make the same mistake twice.
“Should Biden take the White House and get a Democratic Senate,” White said Tuesday, “it will likely all translate into an immediate push to roll back President Donald Trump’s corporate tax cuts, slap significantly higher taxes on wealthy Americans and push through a multitrillion-dollar stimulus spending package aimed at fighting the Covid-19 virus, sending cash directly into people’s pockets, renewing enhanced unemployment benefits, rescuing struggling state budgets and investing in new infrastructure projects.”
One reason for Biden’s change in perspective, White says, is the influence of a team of economic advisers — including Sen. Elizabeth Warren (D-MA) and economists Heather Boushey, Raj Chetty and Jared Bernstein — who come from the left wing of the Democratic Party, and who are less concerned with “appeasing budget hawks and Wall Street bankers who tend to worry about soaring deficits.” Additionally, some of the key centrist advisers from the Obama administration Biden has been consulting, such as former Treasury Secretary Larry Summers, have moved left in recent years, adding weight to more progressive policy proposals.
A major concern for the Biden team is the possibility that, without substantial further stimulus, the economy will get stuck in low gear and perform below potential for years. Another worry is that without more aid, state and local governments will serve as a drag, much as they did after the Great Recession, as they maintain austerity budgets that hinder the recovery.