Even With $900 Billion Stimulus, Biden Faces Fragile Economy  <font color="#6f6f6f">The New York Times</font>


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$900 Billion Won’t Carry Biden Very Far

Despite new pandemic aid, he confronts an economic crisis unlike any since he last entered office in 2009. And political headwinds have only stiffened.

The challenges greeting President-elect Joseph R. Biden Jr. rival those of the Great Recession, when he became vice president.
Credit…Amr Alfiky/The New York Times

With his presidential inauguration just weeks away, Joseph R. Biden Jr. is confronting an economic crisis that is utterly unparalleled and yet eerily familiar.

Millions of Americans are out of work, small businesses are struggling to survive, hunger is rampant, and people across the country fear getting kicked out of their homes. The moment was similarly perilous exactly 12 years ago, when Mr. Biden was the vice president-elect and preparing to take office.

“I remember the utter terror,” said Cecilia Rouse, who was an economic adviser in the Obama White House and has been chosen to lead Mr. Biden’s Council of Economic Advisers.

The $900 billion pandemic relief plan that moderate lawmakers powered through Congress last month provides the incoming administration with some breathing room. This second tier of aid will deliver $600 stimulus checks, assist small businesses and extend federal unemployment benefits through mid-March.

down payment” — a brief bridge to get through a dark winter and not nearly enough to restore the economy’s health.

Roughly 19 million people are receiving some type of unemployment benefit, and many business owners wonder whether they will be able to survive the year. The coronavirus crisis has worsened longstanding inequalities, with workers at the lower end of the income spectrum — who are disproportionately Black and Hispanic — bearing the brunt of the pain.

At the same time, bottlenecks in the Covid-19 vaccines’ rollout as well as fears about a much more transmissible variant of the virus could further delay the revival of large swaths of the economy like restaurants, travel, live entertainment and sports.

“We are in for some choppy waters, even as we continue to get to the other side of the pandemic,” Ms. Rouse said.

Yet despite the scorched earth left by the coronavirus, the economy is on a more stable footing in several ways than it was at the start of 2009.

socked away money, lifting the savings rate to a 40-year high. In contrast, the Great Recession razed storehouses of wealth, in retirement accounts and homes, virtually overnight.

Jason Furman, who led President Barack Obama’s Council of Economic Advisers and is now an economist at Harvard University’s John F. Kennedy School of Government.

But if the Biden administration will have a bit more running room on the economy, it is likely to have a lot less politically than Mr. Obama did in the first two years of his presidency, when his party controlled both houses of Congress.

If the Democrats retake control of the Senate by winning both seats in the Georgia runoff election on Tuesday, Mr. Biden’s path will be much easier. Otherwise, the new president will have to deal with a Republican Senate led by Mitch McConnell of Kentucky, who has stymied legislation from the Democratic-controlled House.

In that case, the administration will have an uphill slog persuading lawmakers to approve more aid when this round ends. With a Democrat headed for the Oval Office, many Republicans who put aside their concerns about debt when it came to cutting taxes in 2017 have rediscovered their inner deficit hawk.

Mr. McConnell successfully resisted President Trump’s calls — echoed by Democrats — to increase the latest stimulus payments to $2,000 from $600.

The failure to extend or expand federal aid when it expires this spring not only would cause significant hardships and needless suffering but could seriously scar the economy, said Joseph Stiglitz, a Nobel Prize-winning economist.