How Biden’s Plan To End Coronavirus Is Impacting the Economy (So Far)
Candidate Joe Biden ran for president with a vow to return the American economy — beaten down by COVID-19 — to prosperity. And just days before he took office as the nation’s 46th president on Jan. 20, Biden introduced his American Rescue Plan, designed to provide emergency relief to fight the virus and rebuild the economy, which has shed 10 million jobs.
And while only part of his plan has been implemented so far, there are positive signs that the push to end the coronavirus is bolstering the economy, but a long road lies ahead.
The World Health Organization designated COVID-19 as a pandemic on March 11, 2020, and with no vaccine to stem the spread, more than 525,000 Americans have died from the virus. Under the Trump administration, scientists went to work on the vaccine, and so far, vaccines from three manufacturers have proved effective and been approved for use.
Biden pledged to vaccinate 1 million Americans a day for the first 100 days in office, knowing that vaccinations were the key to slowing the spread of COVID-19. So far, he has surpassed his promise, with the U.S. exceeding 2.2 million doses administered per day as new cases have been dropping. Biden said on March 6 that the country will have acquired enough doses to vaccinate every American adult by mid-May.
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“We project that the rate of vaccination will have a significant effect on economic activity in 2021, especially in the late spring and summer,” said a March 1 Penn Wharton budget model entitled “Epidemiological and Economic Effects of the COVID-19 Vaccine in 2021.” The report used an estimate of 1.5 million vaccinations per day and projected the economic recovery would result in 152 million people being employed in July and growth in the gross domestic product (GDP) of about 5% in the third quarter.
But there will be even better signs ahead for the economy if the number of vaccines administered picks up.
“Increasing the pace of vaccinations to 3 million would sharply accelerate the rate of recovery, boosting employment by 2 million in July and raising GDP growth by a percentage point in third quarter,” the report said.
The other central peg of the American Rescue Plan is the next phase of economic stimulus. The House is scheduled to vote on the $1.9 million plan this week, with passage anticipated, and Biden is expected to sign it into law soon. Business leaders say the passage is crucial to the economy.
The plan gives $1,400 checks to single tax filers earning less than $75,000 and joint filers less than $150,000, plus $1,400 per child, and also provides child tax benefits, continued unemployment payments and other programs.
Chief executive officers of about 150 New York-based companies urged Congress to pass the bill, stating in a letter it was essential for economic renewal.
“More than a year after the first coronavirus case was reported in the United States, our nation is still struggling to combat the spread and reverse its economic fallout,” the letter read. “Previous federal relief measures have been essential, but more must be done to put the country on a trajectory for a strong, durable recovery.”
The Next Step
While 10 million people are unemployed and an additional 4.3 million Americans have left the labor force and aren’t counted in the unemployment totals, Biden has an ambitious plan to create jobs — but relief for the economy will be long term.
Biden is talking in broad terms about a multitrillion-dollar package to improve America’s aging infrastructure, which he has said will create jobs and allow the U.S. to compete with more modernized nations, such as China. It’s unclear how the bill would be paid for, whether taxes would be raised or if Biden will be able to muster any bipartisan support.
Members of the Biden administration and the nation’s governors have said an infrastructure bill is necessary for everything from fixing highways to allow for greater transportation of goods and services to rural America, to investing in electric buses that would give people easier access to business districts and decrease emissions.
“You can’t emphasize workforce development without infrastructure,” Missouri Gov. Mike Parson told the National Governors Association. “They go hand in hand, and we must continue to invest in both in order to succeed.”
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