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Ethics & Religion
Column #2,065
March 10, 2021
Reduce the Debt
By Mike McManus

The Biden Administration persuaded Congress to pass the President's $1.9 trillion COVID-19 relief bill - though the federal deficit last year was $3.1 trillion. These numbers are staggering.

Cumulatively, the government will hand out to workers and families $2.2 trillion between the relief passed last year and this latest bill, according to the Committee for a Responsible Budget. It estimates that a family of four with an income of $53,000 before the pandemic and has one parent unemployed - stands to receive $22,000 from this package.

Many economists question the need to give $1,400 to people who have not lost their jobs. "To me the part that is hardest to justify is the $1,400 checks to everyone," said Greg Manikw, a Harvard professor who served as President George W. Bush's chief economist from 2003 to 2005. "They are making large payments to people who don't need them."

Mankiw notes that two of his adult children who have not lost jobs have been receiving the payments. And a family of four who didn't lose any income in this crisis will still receive an additional $5,600.

While there are 9.5 million more unemployed workers now than before the pandemic, the Biden bill seems excessively costly. A single job loser in Tennessee would get around $44,000 including $6,200 that would have been available even without the stimulus.

Sen. Joe Manchin, D-W.V., sought to lessen the weekly benefits that had been approved by the House.

The new law will give $350 billion to state and city governments to replenish tax collections that fell during the pandemic. Most of the funding would be based on each state's unemployment figures, not overall population. States with the greatest number of jobless citizens would receive a greater share.

The five states that would get the biggest financial boost by using unemployment as a criteria are California, New York, New Jersey, Texas and Nevada. They are mostly Democratic; only Texas has a Republican governor. The five states that would see their funding decrease the most are Georgia, Florida, Virginia, South Carolina and Alabama - which are mostly Republican. Only Virginia has a Democratic governor.

Of course, Biden is a Democrat and has designed his bill to benefit Democrats. But is that in the national interest?

A little-known element of the stimulus relief package would pay billions of dollars to disadvantaged farmers - benefiting Black farmers in a way no legislation has since the Civil Rights Act of 1964. Of the $10.4 billion in the American Rescue Plan that will support agriculture, about half would go to disadvantaged farmers, according to the Farm Bureau. About a quarter of the disadvantaged farmers are Black. The money would provide debt relief as well as grants, training, education and help for farmers to acquire land.

A 64-year-old woman whose $58,000 income puts her out of range for subsidized health insurance, could see her premium drop from $12,900 to $4,950 under the new law. A 21-year-old man earning just above the poverty line could purchase a premium-free marketplace plan with a much lower deductible than he qualifies for now.

That boost in insurance help for millions of people would be the expansion of the Affordable Care Act, known as "Obamacare" since its passage in 2010.

The law will also provide $1,400 checks to millions of Americans and extend unemployment aid through the summer.

While this is good news to millions of individuals - and is supported by 60% of Americans - can the nation afford such generous benefits? The deficit last year was $3.1 trillion, and the $1.9 trillion new package expands that to $5 trillion. The total national debt is now $23 trillion. That debt must be reduced.

How? First, I propose that Trump's tax cut of $2 trillion in 2017 - be repealed. Most of its benefits went to the very rich - who did not need a tax cut. They should now face a tax increase.

Second, we must reduce federal spending. My first suggestion is to end the space program, which is not essential. But that would save only $43 billion. Pentagon spending is about $740 billon. If it could be cut by a fifth, that would provide only $150 billion.

Since that is very unlikely, the best single step to reduce the debt is to repeal Trump's $2 trillion tax cut.

We must be mindful of the debt we are imposing on the next generation.

_________________________

Copyright (c)2021 Michael J. McManus, President of Marriage Savers and a syndicated columnist. To read past columns, go to www.ethicsandreligion.com. Hit Search for any topic.

 

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