Democrats are planning at least another $2 trillion in stimulus spending, shrugging off fears of growing debt

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Democrats are on course to approve $1.9 trillion in emergency pandemic spending within the next month. It would be yet another large infusion of federal aid only months after Congress passed a $900 billion aid package in December.

But Democrats show few signs of hitting the brakes anytime soon on federal spending. Instead, President Joe Biden is indicating he may press his foot on the gas and shrug off the growing federal debt.

“In order to grow the economy a year or two, three, and four down the line, we can’t spend too much,” Biden said on Tuesday during a CNN town hall. “Now is the time we should be spending.  Now is the time to go big.” 

It’s a remarkable split for Democrats a decade after the Great Recession. Confronted with the worst economic downturn in generations, President Barack Obama enacted an $800 billion stimulus package in February 2009. Many economists and Democrats now say it was inadequate to address the fallout of the financial crisis.

Previous efforts in Congress on infrastructure legislation collapsed during President Donald Trump’s term. Now, Democrats are in the early stages of a sprawling effort that could encompass jobs, climate change, and energy. They appear emboldened by the Federal Reserve promising to keep borrowing costs low for the near future. Fed Chair Jerome Powell also recently called for a “society-wide commitment” to recover lost jobs.

Rep. Don Beyer (D-Md.), vice chair of the Joint Economic Committee, told Insider that House Democratic leaders discussed a follow-up package this week with at least $2 trillion in further spending.

“I think the number one priority for the White House and Congress will be to build the climate initiatives we’ve so much wanted into an infrastructure bill,” Beyer said in an interview. “The second big thing would be accessible, affordable broadband in rural America and lower-income, urban America.”

The mass blackouts in Texas caused by an Arctic winter storm may add momentum to Democrats urging a major plan to revamp the nation’s infrastructure. Some senior Democrats are starting to press for wide-ranging legislation that comes with tax increases on the wealthy and large businesses.

“The catastrophe in Texas has underscored the urgent need to address the climate crisis and rebuild our infrastructure,” Sen. Ron Wyden (D-Oregon), chair of the Senate Finance Committee, said in a statement to Insider. “In the recovery package, my priorities will be making these critical investments by ensuring the wealthy and mega-corporations pay their fair share.”

Wyden added he would introduce proposals next month to remake the energy tax code and boost clean-energy manufacturing. He also said it was an “an opportunity to undo years of neglect” of roads, highways, and bridges by putting people to work repairing them. 

“The past week has hopefully reminded all of my Republican colleagues that there’s no escaping the effects of climate change and broken infrastructure,” Wyden said.

“Historic investments in infrastructure”

The follow-up economic proposal after the Democratic rescue package will differ in two significant ways. The first is …read more

Source:: Business Insider