But while the executive actions will have a major impact – millions of Americans are behind on their rent and mortgage payments, and tens of millions more have student loan debt – it’s clear that their impact on the economy in general will be limited at best.
“It’s on the ballpark,” said Diane Swonk, chief economist at Grant Thornton. “It has to be more than that.”
What the country needs most is an influx of cash, Swonk and other economists say, but for that the new president is completely dependent on lawmakers if he wants to change the economy.
And despite the small majority of Democrats in both houses, Biden’s road to Capitol Hill victory remains dotted with landmines. He could try to work with Republicans and risk a gridlock or months of inactivity, angering his own base. He could try to push a bill through without GOP votes, blowing up his own promises of unity and duality in the first weeks of his tenure. Or, as progressive Democrats fear, he could be looking for a compromise – running the risk of a watered-down package that takes months, drops some priorities, and causes only slow economic growth.
Against a backdrop of high unemployment, low inflation and near-zero interest rates, “it is screaming that lawmakers must put their foot down against the accelerator of fiscal policy and the press,” said Mark Zandi, the chief economist at Moody’s Analytics.
Biden “can’t push the accelerator himself,” Zandi said. “He desperately needs Congress to gear up here.”
Biden’s team is clear that executive orders alone will do little to stop the crisis or undo the damage. But they see them as a step in the right direction, while pressuring lawmakers to do more.
“We do where we can, but there are 30 million of our neighbors who are starving,” Brian Deese, the director of the White House’s National Economic Council, wrote on Twitter. “Congress must act decisively to end this crisis.”
And so far, it remains uncertain how much lawmakers are willing to spend and how quickly they will be able to act.
Biden has urged lawmakers to move forward with his US bailout plan, which includes hundreds of billions of dollars for the distribution of coronavirus vaccines, $ 1,400 incentive checks to working Americans, and comprehensive unemployment benefits. But members of both parties have criticized the package as too expensive and, especially for Republicans, too close on the heels of the $ 900 billion bill passed in December.
A group of Senate Republicans is looking to meet with the president to begin bipartisan negotiations on a cheaper emergency relief bill, even if Democratic leaders are willing to pass an aid package with all Democratic votes. In a letter sent to Biden on Sunday, 10 Republicans, led by Senator Susan Collins of Maine, told the president they are working on a counter-proposal that will focus 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 arrives at Biden for signature. And the delay has sparked further discussion about what the president could do on his own to help the economy.
A core purpose of Biden’s implementing decisions was to direct the federal agencies to ensure that aid already allocated flows as smoothly as possible through the pre-existing programs. That includes asking the Department of Agriculture to recalculate how it hands out food stamps; instruct the Department of Labor to resolve issues that can block unemployment benefits; and an appeal to the Treasury Department to ensure that more Americans who qualify for incentive vouchers can get them.
“Stretch the envelope, make sure the programs reach as many eligible people as possible, and remove the bureaucratic hurdles – that’s a big part of what they can do through executive action,” said Andrew Stettner, a senior fellow at the Century Foundation, a progressive think tank.
Still, he says, “To speed up the recovery, they need investment from Congress. They need changes in the law. “
Certainly, given the nature of the recession and how it is related to the pandemic, any steps to tackle the coronavirus will in turn boost the economy as they could cause more Americans to leave their homes and return to work and spend more money.
“The biggest impact the government can have on the economy is vaccination coverage,” said Constance Hunter, chief economist at KPMG.
Much of that effort also depends on Congress transferring more money to fund vaccine distribution. But Biden has also signed an executive order to invoke the Defense Production Act to increase supplies of all the materials needed to get vaccines into arms, which could also ease the process.
He could also work with Treasury to extend the income tax filing deadline beyond April 15, as President Donald Trump did at the start of the pandemic last year, or to “waive or change certain tax liabilities. or change it, ”said Stettner.
“People are seeing that as an example of ways you could boost the economy even if you don’t have any action at Congress,” he added.
While he can’t spend new money without the help of Congress, Biden could play with funding already allocated for other purposes. Trump signed an executive order late last year to use a combination of disaster relief and state dollars to increase payments for unemployed workers. Although it worked for a few weeks, the money ran out quickly – a problem Biden would also encounter if he tried to divert money from elsewhere to be used for economic aid.
“It was more symbolic than fact,” Swonk said of Trump’s move. “And over time – because you’re also running around bypassing Congress, which ultimately controls the wallet – you’re going to make more enemies too.”
All of this means that aside from urging Congress to act quickly and decisively, Biden himself has few options for tackling the economic crisis head-on. And perhaps the most powerful step he can take unilaterally is messaging as much as it is money.
“The executive orders are intended to indicate that the administration is fully engaged 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.”