With Congress eyeing the next Covid-19 economic relief package, Arizona Rep. Andy Biggs, R, held a wide ranging video conference conversation with the members of the Arizona Chamber of Commerce & Industry last Thursday about the elements the next bill is likely to contain.
At the outset of his remarks, Biggs stressed that the U.S. economy prior to the pandemic was in very strong shape and that it could return to a similarly good place.
“One of the things that I think is important is that the economic foundation is still solid, we just have to have an opportunity to let it work and, if we do, then I think the foundation is there,” Biggs said.
Biggs is concerned, however, what the next relief package will mean for the country’s overall debt and deficit position.
“When we had the robust economy, we had a trillion-dollar structural deficit already projected for this year,” Biggs said. “And now that structural deficit is going to be north of $4 trillion, and could be as high as $8 trillion depending on whose bill comes out in the next couple of weeks.”
Biggs said the country is facing a generational wealth transfer due to the trillions in dollars that have been deployed in the previous relief packages.
“If you take the total national debt and compare it to our total gross domestic product, total economy, you start moving into a debt-to-revenue ratio that’s probably 110 to 112 percent, maybe even higher depending on who’s doing the calculating,” Biggs said. “That is a dangerous, dangerous place to be, and so we start worrying about a sovereign debt crisis.”
Extended enhanced unemployment benefit
A bill backed by Speaker of the House Nancy Pelosi would extend the $600 enhanced unemployment benefit that supplements state-level unemployment payments, something Biggs says worries him for the way it could delay Americans’ return to work.
“I get from a lot of businesses when I talk to them, they say, ‘Please, end that, because we can bring back employees. They don’t want to come back because they’re getting a $600 bonus on a weekly basis from the feds.’” Biggs said. “(Pelosi’s) package would take that into next spring and, actually, in some instances increase that unemployment package.”
Liability protections a priority
Biggs says ensuring Congress adopts a liability protection bill for businesses remains a priority issue for him.
“One of the things we’ve tried to convey to the Senate is please don’t trade off $2 trillion of debt for a weak-sauce liability protection,” Biggs said.
The East Valley congressman says he’s spoken with senators who agree with him and he says that Senate Majority Leader Mitch McConnell is also committed to adoption of a liability protection bill. Biggs says what form such a bill takes will likely depend on what emerges from negotiations over the next Covid relief package.
Payroll tax relief
Biggs says he agrees with the Trump administration and economists who believe that a payroll tax relief policy designed to help employers retain employees would continue to have a helpful stimulative effect on the U.S. economy and can be accomplished with manageable costs.
Biggs breaks with the White House, however, on whether to issue another round of direct payments to Americans.
Biggs says he would like to know whether data exists to indicate whether a previous round of payments was successful.
“I have to ask those questions and find out as we look at this,” Biggs said.