With approval from many top economists, Biden said his Covid relief package would quickly fuel economic growth and job creation.
WASHINGTON (CN) — President Joe Biden highlighted the January jobs report on Friday afternoon to demand broad backing of his $1.9 trillion pandemic-relief legislation.
Released this morning from the Bureau of Labor Statistics, the report shows that the U.S. economy added 49,000 jobs in January but is still down almost 10 million jobs since before the pandemic. And though the unemployment rate dropped from 6.7% in December to 6.3% in January — the first decrease in two months — it’s still 2.8 percentage points higher than it was pre-pandemic.
White House Press Secretary Jen Psaki called the jobs report “disappointing.”
“I see enormous pain in this country,” Biden said Friday. “A lot of folks out of work, a lot of folks going hungry, staring at the ceiling tonight wondering what I’m going to do tomorrow, a lot of folks trying to figure out how to keep their jobs and take care of their children, a lot of folks reaching the breaking point.”
Communities of color continue to be disproportionately affected by the pandemic, while also bearing the brunt of high unemployment and economic insecurity. In the January jobs report, the unemployment rate was 9.2% for Black workers, 8.6% for Hispanic workers, 6.6% for Asian workers and 5.7% for White workers.
Back in August, a report from The Hamilton Project, part of the Brookings Institute tackled how Covid-19 crisis has worsened racial economic inequality.
“The typical Black worker and family have lower earnings with which to absorb a large-scale economic shock such as the one brought on by Covid-19,” the report states.
Approved by a razor-thin Senate majority this morning, Biden’s $1.9 trillion American Rescue Plan marks his first piece of legislation. In addition to $1,400 stimulus checks, it includes money for state and local government aid, expanded unemployment benefits, and vaccine distribution and testing funds. It also offers funding for schools to reopen and aid for businesses.
Republicans who put forward their own Covid-relief proposal at one-third the price say Democrats are using the massive bill to push their legislative priorities, rather than give relief to Americans.
Biden’s package is being fast-tracked through Congress, using a procedural step called budget reconciliation that allows Democrats to push the bill through without Republican support — needing only a simple majority instead of the regular 60 votes that legislation requires.
“I’ve told both Republicans and Democrats that it’s my preference to work together,” Biden said Friday. “But if I have to choose between getting help right now to Americans who are hurting so badly, and getting bogged down in a lengthy negotiation, or compromising on a bill that’s up to the crisis, that’s an easy choice.”
Biden says his plan addresses both the immediate needs of the country and long-term job growth — an argument supported by many economists.
This week, the nonpartisan Congressional Budget Office projected that, continuing on the current path, it would take the American public until the year 2024 to return to full employment. With Biden’s plan, however, GDP will reach pre-pandemic levels by the end of 2021, according to an analysis from the Brookings Institute. Otherwise, it would take several years to return to pre-pandemic levels, the institute found.
“There’s also a growing chorus of top economists — right, center, left — that say we should be less focused on the deficit and more focused on the investments we make, and can make now, in jobs, keeping families out of poverty and preventing long-term economic damage to our nation,” Biden said Friday.
In a Thursday op-ed in the Washington Post, Larry Summers, former director of the National Economic Council during the Obama administration, said that a $1.9 trillion stimulus could overheat the economy through inflationary pressures and might impact future financial stability and the value of the dollar. The Brookings Institute report also noted the risk of a difficult economic period after 2021.
At the White House press briefing Friday, however, Council of Economic Advisers Member Jared Bernstein pushed back against the analysis.
“With respect to Larry and his piece, it’s flat-out wrong that our team is dismissive of inflationary risks,” he said.
Bernstein said that the White House economic team is in complete consensus about the need for the plan.
“In our view, the risks of doing too little are far greater than the risks of doing too much.”