Just hours after he signed a $1.9 trillion pandemic relief bill into law, President Biden said the package would help to reopen schools and defeat the virus more quickly.
Mr. Biden, in a prime-time address, noted that the measure provides $130 billion for schools, an amount that he said will “accelerate a massive effort to reopen our schools safely.”
“The only way to get our lives back, to get our economy back on track, is to beat the virus,” he said, nodding to the reality that many people cannot return to work or seek new employment until their children are back in school.
Mr. Biden gave a quick pitch for several other provisions in the stimulus package, including checks to individuals, nutritional assistance to families struggling to put food on the table and expanded tax credits that researchers say will halve child poverty for the year. He said that the package would “create millions of jobs.”
“If it fails at any point I will acknowledge that it failed,” Mr. Biden said. “But it will not.”
Economic forecasters expect an almost immediate boost to the U.S. economy from the stimulus law, the American Rescue Plan, which includes several provisions meant to put money in the hands of low- and middle-income segments of the population quickly. That includes direct payments of $1,400 per individual that White House officials say will start showing up in bank accounts this weekend. It also extends unemployment benefits for millions of jobless workers through September, including an additional $300 per week from the federal government.
Economists expect those provisions, among others in the bill, to power an acceleration in consumer spending at a moment when parts of the economy badly damaged by the pandemic, like the hospitality, aviation and tourism industries, are beginning to show new signs of life thanks to ever broader vaccine deployment.
With the bill signed into law, cash will “begin to flow very quickly,” Ian Shepherdson, chief economist for Pantheon Macroeconomics, wrote in a research note on Thursday. He also expects municipal and state governments to quickly begin rehiring some of the 1.3 million workers they laid off in the depths of the crisis, reassured by the law’s designation of $350 billion in aid to cities and states, though that money will not be disbursed as quickly as individual aid.
“This will come at the same time as private businesses are rehiring people in customer-facing jobs as the reopening continues in the leisure, recreation, and travel sectors, so we’re expecting payroll growth to accelerate dramatically over the next few months,” he wrote.
Mr. Shepherdson now predicts that U.S. economic growth will hit 7 percent for 2021, which would be the nation’s fastest annual pace since the early 1980s. Many other forecasters have revised up their growth predictions in light of the bill’s passage, even if they are not all as bullish as Mr. Shepherdson.
The international Organization for Economic Cooperation and Development predicted this week that the Biden plan would help the U.S. economy grow at a 6.5 percent rate this year. Some economists worry that the growth boost could be too strong, stoking runaway inflation, though there is no indication yet in economic data that a sustained price spike across the economy is imminent. Inflation has on average been running below the Fed’s 2 percent target for several years.
The timing of the rescue plan could strengthen Mr. Biden’s ability to claim credit for an economic rebound, though even before he took office, forecasters were projecting a return to growth, albeit less vigorous. Job growth accelerated in February, Mr. Biden’s first full month in office. In another sign that the economy is healing, the Labor Department reported on Thursday that about 50,000 fewer workers filed first-time claims for state unemployment benefits than last week.
Mr. Biden and his aides plan to aggressively make the case that his relief package is responsible for any rapid economic improvement. At the signing on Thursday afternoon, Mr. Biden got started.
“This historic legislation is about rebuilding the backbone of this country and giving people in this nation — working people and middle-class folks, the people who built the country — a fighting chance,” the president said. “That’s what the essence of it is.”