But while the executive actions will have a big impact – millions of Americans are in arrears with their rent and mortgage payments, and tens of millions of others have student loan debt, it is clear that its impact on the wider economy will be limited at best.
“It’s on the sidelines,” said Grant Thornton, chief economist at Diane Swonk. “It must be more than that.”
What the country needs most is an influx of cash, say Swonk and other economists, but for that the new president is completely dependent on legislators if he wants to turn the economy around.
And despite Democrats’ slim majority in both chambers, Biden’s path to victory on Capitol Hill remains littered with landmines. He could try to work with Republicans and risk a stalemate or months of inaction, angering his own base. He could try to force a bill through without any IDP votes and inflate his own promises of unity and duality in the first weeks of his term. Or, as progressive Democrats fear, he could seek a compromise – the danger of a watered-down package lasting months, omitting priorities and abandoning only sluggish economic growth.
Against the backdrop of high unemployment, low inflation and near-zero interest rates, ‘it’s screaming that lawmakers need to get their feet wet for the accelerator and press of fiscal policy,’ said Mark Zandi, chief economist at Moody’s Analytics.
Biden “can not push the accelerator himself,” Zandi said. “He urgently needs Congress to kick in gear here.”
Biden’s team is clear about the fact that executive orders will do little to stem the crisis or stop the damage. But they see it as a step in the right direction while pushing lawmakers to do more.
“We act where we can, but there are 30 million of our neighbors who are starving,” said Brian Deese, director of the White House National Economic Council. posted on Twitter. “Congress must act decisively to stem this crisis.”
And so far it remains at least uncertain how much legislators are willing to spend and how quickly they will be able to act.
Biden has urged lawmakers to continue its U.S. bailout plan that includes hundreds of billions of dollars for the distribution of coronavirus vaccines, $ 1,400 stimulus tests to working Americans, and extensive unemployment benefits, among other policies. But members of both parties criticized the package as too expensive and especially for Republicans too close to the $ 900 billion bill passed in December.
A group of Senate Republicans is seeking a meeting with the president to begin dual negotiations on a cheaper bill, even if the Democratic leaders are willing to implement an all-inclusive aid package. In a letter to Biden sent Sunday, 10 Republicans, led by Senator Susan Collins of Maine, told the president that they were working on a counter-proposal focusing on spending $ 160 billion on vaccines, testing, treatment and personal protective equipment.
It will probably take weeks or even months before a new bill finally comes to Biden’s desk for signature. And the delay sparked further discussion about what the president could do on his own to help the economy.
An important purpose of Biden’s executive orders was to raise federal agencies to ensure that the aid already granted flows as smoothly as possible through existing programs. This includes asking the Department of Agriculture to recalculate how it distributes food stamps; instruct the Department of Labor to work out issues that may hamper unemployment benefits; and calls on the Treasury Department to ensure that more Americans who are eligible to receive stimulus control can get it.
“Stretch the envelope, let the programs reach as many people as possible and get rid of the bureaucratic obstacles – that’s a big part of what they can do through executive action,” said Andrew Stettner, a senior fellow at the Century Foundation. said a progressive brainstorm.
Yet he says: ‘To increase the recovery, they need investment from Congress. They need legislative changes. ”
To be sure, given the nature of the recession and how it was linked to the pandemic, any steps to tackle the coronavirus will stimulate the economy, as it could lead to more Americans leaving their homes, returning to work and spend more money.
“The biggest impact the government can have on the economy is the vaccination rate,” said Constance Hunter, chief economist at KPMG.
Many of the efforts also depend on Congress spending more money to fund the distribution of vaccines. But Biden has also signed an executive order calling on the Defense Production Act to increase the supply of all the materials needed to get vaccinations into the gun, which could also facilitate the process.
He could also work with the Treasury to postpone the deadline for filing income taxes to April 15, as President Donald Trump did at the start of the pandemic last year, or to “waive or change certain tax obligations or to change, “Stettner said.
“People see it as an example of ways you can stimulate the economy, even if you do not have a congress,” he added.
Although he cannot spend new money without the help of Congress, Biden can play money that has already been allocated for other purposes. Trump signed an executive order late last year to use a combination of disaster relief funding and state funds to increase payments to unemployed workers. Although it worked for a few weeks, the money quickly ran out – a problem that Biden would also face if he tried to divert money from elsewhere to use for economic relief.
“It was more symbolic than it actually was,” Swonk said of Trump’s move. “And over time – because you’re also running around trying to bypass Congress, which ultimately controls the wallets – you’ll also make more enemies.”
All of this means that, apart from urging Congress to act quickly and decisively, Biden has few options of its own to address the economic crisis directly. And perhaps the most powerful step he can take unilaterally is just as much about messages as about money.
“The executive orders are intended to indicate that the administration is fully involved and will do what it needs to do to ensure that the economy gets back on track,” Zandi said. “He indicates that help is on the way.”