Republicans – The $1.9 Trillion Stimulus Package

Picture of a stimulus check

By: T. Jeffersonian

The U.S. House of Representatives is finalizing the details for the $1.9 trillion Stimulus Package, known as the Rescue America Plan. While politicians may claim that this stimulus package is bi-partisan, it is apparent that the situation is as polarized as ever. Democrats are the main proponents of the package as it was a major campaign promise from Joe Biden, and Republicans generally are against the high price tag.

What the Plan Includes So Far

ï         Federal minimum wage increase over the next five years to $15.00/ hour 

ï         $400 billion for vaccines, distribution, testing and contact tracing funding. 

ï         $400.00 a week in supplemental unemployment insurance extended until September 2021.

ï         $10,000 in student loan forgiveness.

ï         $1,400 stimulus checks for those making $75,000 or less.

ï         Expanded child tax credit up to $3,600 for children under the age of 17 years of age.

ï         Up to $8,000 tax credit for multiple child care costs.

ï         Funding to reopen schools.

ï         Funds for state, local, and tribal governments.

ï         Extending the eviction moratorium through September 2021.


The Congressional Budget Office (CBO) has reported that raising the minimum wage to $15.00/ hour over the next five-years will lead to the loss of 1.4 million jobs because many companies will have to lay off workers in order to make up for the additional financial obligations. The CBO reports that 900,000 Americans will be lifted out of poverty due to the wage increase, however an additional $54 billion will be added to the federal deficit from 2021-2031.

In 2020, Congress responded to the pandemic with the Coronavirus Aid, Relief, and Economic Security (CARES) Act which added $2 trillion to the federal deficit. The pandemic caused an initial 10 percent loss in Gross Domestic Product (GDP). After months of resistance by Democrats to pass a smaller relief package, Congress in December 2020 passed an additional $900 billion in Covid-19 relief spending. Even before the new $1.9 trillion stimulus is approved, an additional $2.9 trillion has already been added to the federal deficit by these federal aid packages. Approval of the new $1.9 trillion stimulus package will increase the federal deficit $4.8 trillion.

Opponents of the stimulus package argue that the amount of aid surpases our economic needs. “Output gap” is defined as the difference between potential and realized GDP. According to CBO estimates, the United States is currently facing a $650 billion GDP output gap. Despite the lack of outstanding need for stimulus and a disproportionate GDP, the Biden Administration and Congressional Democrats are claiming a stimulus package over two times the amount of our current GDP output gap is warranted.

Opponents also argue that the stimulus itself violates the economic stimulus theory.  The theory behind a stimulus is that when the economy is below full employment, government stimulus—tax cuts, checks, spending—will boost individual and company spending. This will, in turn, stimulate business activity, which will begin a virtuous cycle of additional income to workers, more spending, and more job opportunities. Due to the nature of this cycle, a singular dollar of federal stimulus is projected to have (much) more than a $1.00 return to the economy and government—the multiplier effect. When considering that the government has placed so many restrictions on commercial activity due to the pandemic, the multiplier effect does not play a factor. So, the possible positive economic results a normal stimulus would bring, under pandemic conditions will just be squandered.

If the stimulus is approved and the federal deficit is increased to $4.8 trillion, it will take 6.5 years at minimum to pay off the pandemic aid deficit alone. This time range is calculated by predicted economic growth with the addition of a 28 percent corporate tax. It is important to remember that the Biden Administration originally pledged to use the corporate tax increase to cover the costs of clean energy, healthcare, and infrastructure spending plans which are not even incorporated in these projections.

What Should Republicans Do

Republicans in the House of Representatives are lining up to fight the new $1.9 trillion stimulus. Because of this resistance, Democrats have seized the opportunity to publicly brand the Republican Party as uncaring to the American people during the pandemic. Despite the increase to the federal deficit, the Republican party should fully support the $1.9 billion stimulus. After the stimulus passes, Republicans can emphasize its caring brand by pointing to its actions in both 2020 and 2021.  The new brand would be, “When the nation needed urgent response and unity, the Republicans cared and acted with urgency.” It was the Democrats who resisted a second round of relief in late 2020 before the national elections.

Democratic resistance was specifically employed to keep economic conditions worse than what they could have been in order to win the 2020 elections. This is a matter of public record and can be used to diminish public trust in the Democratic party. At the same time, Democrats will be unable to veil Republican support in 2020 and 2021. The vote for the stimulus package will speak for itself. Votes for the stimulus not only ensures immediate relief for many Americans, but it also gives Republicans greater chances of taking control of both the House and the Senate in 2022.   When Republicans gain control of Congress, they can deregulate business and incentivize economic resiliency and diversification. When compared with more centralized, socialist, Democratic policies, libertarian Republican economic policies are proven to generate faster economic growth and federal revenue. The federal deficit can be paid off faster by Republicans than by it can be paid off by Democrats. We have evidence of this from the late 1990s when both Congressional Houses were led by Republicans and the federal government actually had a surplus, allowing us to pay down our debts. We need a Republican controlled Congress, but to get there, Republicans must approve the $1.9 trillion stimulus so that Americans are assisted and so that Americans can see that Republicans care. Read for education.