Today, President-elect Biden announced a proposed relief and recovery package that provides relief that is commensurate with the scale of the economic challenge facing the United States, due to the harm caused by the COVID-19 pandemic. The urgent economic priorities facing the nation are simple: Get control over the spread of the virus and then ensure that U.S. households, businesses, and governments spend and invest enough to radically reduce unemployment and boost workers’ wages. The Biden package ticks these boxes. The continuation of enhanced pandemic-related unemployment insurance programs, the substantial fiscal aid to state and local governments, the investments in virus control and mitigation, and the increase in the federal minimum wage to $15 an hour are all absolutely essential for rapid relief and a fast and equitable recovery.
Most importantly, this package is at the scale of the problems it is aiming to solve. To support the spending and investment needed to fully repair the labor market, we estimated in early December that roughly $3 trillion was needed. Less than one-third of this amount was included in the end-of-year recovery package, and the Biden administration’s proposal fills in the remaining amount. In short, it is a proposal that is driven by careful consideration of the evidence and is not artificially constrained by outdated fears about federal debt. This marks a welcome break from mistakes made in past downturns, such as the Great Recession. It is critical that the incoming Biden administration and Congress work to pass this important relief and recovery measure.