Catherine Rampell: The best way for Biden to save money later - TribLIVE

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There are two main arguments for Congress to provide generous, immediate fiscal relief. One is based on humanitarian concerns; the other, economic growth. President-elect Joe Biden should use both in his continuing efforts to sway penny-pinching lawmakers.

On Friday, in response to a particularly “grim” jobs report, Biden made a plea for Congress to extend a lifeline to Americans now and not wait until a new administration arrives next month. Empathy is Biden’s superpower, and understandably, he emphasized the bleeding-heart case for relieving economic hardship.

It goes something like this: Tens of millions of Americans are still unemployed or underemployed. Many are heading into the holidays woefully behind on rent and other bills; they may soon face eviction or foreclosure once emergency federal programs expire on New Year’s Eve.

Hunger and other forms of deprivation have skyrocketed. It’s unconscionable that, here in the richest country on Earth, nearly 1 in 6 households with children report they either sometimes or often didn’t have enough to eat in the previous week.

People are “in trouble through no fault of their own,” Biden said. They desperately need government to “understand” and to help.

But then — briefly — Biden pivoted to a second argument that seemed designed to ply Republican deficit hawks away from their roosts. If they’re not persuaded by the moral or humanitarian case for coronavirus relief, Biden suggested, there’s a cold, calculating economic growth case to be made as well: As large as the upfront price tag of another fiscal relief package might seem, that bill will be worth it in the long run if it helps the economy — and ultimately tax revenue — get back onto its pre-covid track faster.

“It’s essential we provide immediate relief for working families and businesses now, not just to help them get to the other side of this painful crisis, but to avoid a much broader economic cost due to long-term unemployment and businesses failing,” he said. “By acting now, even with deficit financing, we can add to growth in the near future.”

In other words, Biden is urging Republicans not to be penny-wise and pound-foolish. Even if conservatives claim to prioritize economic growth above all else, as when they argued for unfunded tax cuts, this priority is best met through generous, immediate, well-crafted fiscal relief. Not premature belt-tightening.

Why would that be the case? Right now we’re closer than ever to widespread distribution of a vaccine — perhaps mere months away. At first blush, this might suggest less urgency for Congress to swoop in with additional rescue funds. But in the several months while we wait, the country’s productive capacity could suffer a lot of permanent damage.

It’s unusually cheap right now for the federal government to make these investments in businesses and workers. Interest rates are close to zero. As Treasury secretary nominee Janet Yellen noted earlier this year, under such conditions, taxpayers are likely to recoup most or all of the cost of stimulus measures that prevent lasting damage to the labor market. Even some conservative economists who usually bristle at the premise that government spending ever “pays for itself” have argued that some components of federal fiscal relief may do so. (The American Enterprise Institute’s Michael Strain, for instance, recently told me this might be true of the Paycheck Protection Program, if it preserved a lot of the economy’s productive capacity.)

Yes, another massive spending bill would be expensive. But in terms of long-term economic costs, it’s still cheaper than the alternative.

Catherine Rampell is a columnist for The Washington Post. George Will is on vacation.

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