Mitch McConnell, the Senate majority leader took to calling the Democrats’ signature second stimulus bill, the HEROES Act, “unserious” and claimed that it contained “huge tax cuts for rich people in blue states.”
The HEROES Act, which originally cost $3.4 trillion and was updated to cost $2.2 trillion, has been on McConnell’s desk since the Democrat-controlled House passed the bill in May.
Meanwhile, Democrats are sticking with the higher number and some are even discussing measures President-elect Joe Biden can take once he’s in office, such as forgiving student loan debt to boost spending.
McConnell Called the HEROES Act Unserious
After Joe Biden expressed support for the HEROES Act, McConnell — the lead Republican negotiator of a second stimulus plan — excoriated the bill as expensive and called out a provision in the HEROES Act, called the SALT provision, as only intended to help wealthy Democrats.
The provision, according to the Tax Policy Center, would “waive the $10,000 annual cap on the state and local tax deduction for two years.” According to the center, the SALT provision would increase the average tax cuts by $400, but the wealthy get most of the benefit, with “the highest-income 1 percent (those making $819,000 or more) would receive an average tax cut about $33,000.”
McConnell has often complained about the $2.2 trillion price tag of the HEROES Act, which many have described as ironic, given that he voted for the Trump’s Tax Cuts and Job Act, which increased the national debt by $1.9 trillion, according to the Brookings Institution. Instead, McConnell has advocated for a more “targeted” approach and a ” skinny” bill that would cost $500 billion. You can read more about the individual bills here.
McConnell’s opposition to the act also has the support of his caucus in the Senate, with senators like Richard Shelby, who chairs the Senate Appropriations Committee. According to Business Insider, Shelby said, “I think right now that the Democrats would have to come a long way back to reality with us to get a bill.”
Democrats Are Pushing for Alternative Executive Action
In a letter written by House Speaker Nancy Pelosi and Senate Minority leader Chuck Schumer, they both criticized McConnell for advocating for a “skinny” bill.
Earlier this year during negotiations with Secretary Mnuchin and Chief of Staff Meadows, we agreed to compromise on a relief package and lowered our request by $1.2 trillion. Since that time, you have lowered your proposal from $1 trillion to $500 billion, despite the consensus from economists and experts that the country requires a much larger injection of aid.
However, some Democrats and economists seem aware that the likelihood of passing a $2.2 trillion bill making it through a Republican-controlled Senate are very low and are opting for other measures that Biden and the Democrats can do to jumpstart the economy.
As a result, some Democrat politicians are pushing Biden to go bigger on student debt forgiveness than he ever has in the past. Biden has already promised to take $10,000 off of some federal student loans as part of a stimulus deal.
However, Schumer told a reporter that he hopes Biden pursues a policy that eliminates $50,000 in debt and House Intelligence Committee chair Adam Schiff encouraged Biden to forgive all student debt immediately once he gets into office.
Some economists are arguing that the lack of hefty student loan payments could free former college students up to put more money into the economy and help jumpstart the recovery, while others argue that it would be unfair to those who already paid off their loans or have spent a significant amount of their income paying them down.
The executive director of the Student Borrower Protection Center believe that the policy could have a direct impact on reversing the economic harms of the pandemic, telling The New York Times, “For millions of borrowers, the fallout from the pandemic is still raging. The thought that their student loan payments will be turned back on and they will get money taken out of their account via auto debit, or they will see their wages garnished once again — the results will be cataclysmic for their finances.”