Wednesday afternoon, the Democratic majority in the House passed HR 1319. Variously marketed as a “pandemic relief bill,” an “economic stimulus package,” and the “American Rescue Plan,” it is largely a wealth transfer from well-managed and prosperous red states to incompetently managed blue states. A mere 9 percent of the legislation’s $1.9 trillion cost will be devoted to mitigating COVID-19, and about 30 percent will go to individuals in the form of stimulus checks and unemployment payments. The rest will go to blue state bailouts, funding for school systems that remain closed, kickbacks to unions, new subsidies for Obamacare, and exorbitant financing for innumerable pet progressive projects.
By far the worst of the bill’s provisions involves the $350 billion earmarked for blue states and their crumbling cities. The Democrats claim this spending is necessary to rescue them from budget shortfalls caused by the pandemic. But except for certain badly managed blue states, there is no real need for federal bailouts. The Cato Institute highlighted this reality in January: “State and local budgets are not in crisis.” The only Democrat to vote against HR 1319 on Wednesday, Rep. Jared Golden (D-Maine), echoed this point in February: “While some additional aid may be warranted, the $350 billion authorized by this bill far exceeds the actual budget gaps confronting states and localities.”
The Republicans have consistently made this same argument, of course. Sen. Joni Ernst (R-Iowa) put it as follows last week: “We have the good people of Iowa being asked to support blue state bailouts.” She went on to point out which states will receive the majority of the money: “Chuck Schumer’s state of New York and Nancy Pelosi’s state of California.” This comment was made pursuant to what the Republicans have dubbed the “Schumer substitute,” an 11th-hour amendment to the formula that determines which states get how much of the $350 billion. Senate Democrats changed the formula to reward badly mismanaged blue states. Sen. Marsha Blackburn (R-Tenn.) explains at Fox News:
Previous COVID relief was distributed to states based on population, which ensured a level playing field. For purely partisan reasons, this bill uses unemployment numbers to determine final state payouts and rewards failing blue states with the tax dollars of red states whose jobless rates didn’t spike as dramatically. Under this new formula, our home state of Tennessee will lose $164 million dollars; meanwhile, New York, New Jersey, and California will walk away with a combined gain of almost $9 billion.
Perhaps even more infuriating for the voters themselves than the blue state bailouts is the provision of HR 1319 that allocates $129 billion for the public school systems, purportedly to pay for infrastructure changes that will allow them to reopen safely. Few parents of K-12 children will fall for that line, however. Last year’s relief bills allocated $67 billion to the schools, and a lot of that money was never spent. The Congressional Budget Office (CBO) estimates that only about 5 percent of the new money will be spent in 2021. In fact, most of it is allocated for 2022 through 2028. This is obviously ransom money for the teachers unions. Who believes they’ll release their hostages with no new demands?
In addition to the blue state bailouts and the ransom payments to teachers unions, HR 1319 also forces taxpayers to pay for an $86 billion bailout for private union pensions. As the New York Times phrases it, “Tucked inside the $1.9 trillion stimulus bill … is an $86 billion aid package that has nothing to do with the pandemic.” The $86 billion bailout props up about 185 union pension plans that are on the verge of collapse. According to the Times, “The provision does not require the plans to pay back the bailout.” Wonderful. HR 1319, inevitably includes new subsidies for Obamacare, which will accelerate health inflation and add to unsustainable health costs. Brian Blase, Ph.D, of the Galen Institute writes:
The legislation being proposed by congressional Democrats to boost spending on the Affordable Care Act (ACA) reveals that the law has severely underperformed expectations. Even worse, the proposed expansion recklessly boosts federal subsidies for health insurance in a way that exacerbates tax inequities, substantially replaces private spending with government spending, reduces incentives for work and productivity, and significantly adds to already unsustainable family and government health care expenditures.
A brief list of progressive pet projects also found in HR 1319 includes $570 million for 15 weeks of paid leave for federal workers, $270 million for the National Endowment for the Arts, $200 million for museum and library services, $91 million for “outreach” to student borrowers, $50 million for “environmental justice” grants, ad infinitum. Is HR 1319 a “relief bill,” a “stimulus package,” or a “rescue plan”? Nope. It’s a scheme to redistribute wealth from red to blue states. It is part of the ongoing Democratic effort to transform the United States into a one-party state in which they are never again troubled by Neanderthals.