Consensus on the COVID-19 relief bill that Congress is getting ready to pass, possibly by early Tuesday morning, is well summed up by Kathy Bostjancic, chief U.S. financial market economist at Oxford Economics in a quote to The Washington Post: "This is better than nothing, and there’s some good news that we’re finally getting a deal. … The bad news is it’s less stimulative than the prior packages, and the relief measures are short-lived."
Since the CARES Act was passed and became history, 8 million people have been shoved into poverty. Hunger is at its highest point yet in the pandemic, especially in families with children. The clip of small business closings has accelerated, new unemployment applications are at a quarterly high, and large employers are threatening that layoffs are imminent. This bill will help stem some of that, but not for long. Expanded unemployment benefits only extend to mid-March, and the less than $1 trillion price tag barely dents the $16 trillion in economic damage the Congressional Budget Office predicted back in June. Given the months and months we've gone through in which no relief came through Mitch McConnell's Senate, that estimate is likely worse.
"If we know anything about recessions, it's that the recovery, especially for people with lower levels of education, is going to take longer," Diane Whitmore Schanzenbach, director of the Institute for Policy Research at Northwestern University, told the Post. "It's going to take us a long time to get out of this, and the aid in this bill doesn't last for long enough." There's this, too. "Even if Congress gets their act together and passes this stimulus tonight, it won't make a big impact for weeks," said Ian Shepherdson, chief economist at Pantheon Macroeconomics. Many states will have to reengineer creaky unemployment systems again, so that will take time. The $600 stimulus checks will likely be swallowed up immediately by long past-due bills and rent. And there is no funding beyond some education and transportation support, along with vaccine distribution money for state and local governments, which have already bled employees—1.3 million since November of last year. More public sector job cuts and tax hikes are likely. "It's $900 billion, but it's not a particularly well-designed package," said Paul Ashworth, chief North America economist at Capitol Economics. "It won't include any direct transfers to state and local governments, which gets you the biggest bang for the buck."
"You need to go big to get the economy going again," said Glenn Hubbard, the former chief economist to President George W. Bush and former dean of Columbia Business School. "President Biden will need something like a big infrastructure program that commits to spend money over several years to give people much more confidence that the economy won’t slip back." It's not nearly enough because, with a Democratic administration about to take over, Republicans all of the sudden feel the need to pretend they care about the deficit again and aren't willing to spend more. (Which is yet another reason we have to get Jon Ossoff and Raphael Warnock elected, to keep those deficit peacocks from ruining absolutely everything.)