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Why Congress Will Borrow To Help Ukraine But May Pay For New COVID-19 Medical Costs With Offsetting Spending Cuts
Why is Congress prepared to spend billions of dollars for new aid to Ukraine without requiring offsetting tax increases or spending cuts at the same time lawmakers are demanding that more COVID-19-related therapeutics and testing be fully paid for?
It can’t be about the money. The next round of Ukraine aid will cost about $40 billion, even more than President Biden requested. By contrast, it looks like Congress is considering only about $10 billion, or one-quarter as much, for the COVID-19 health bill. If you are worried about the budget deficit, why fret about a $10 billion bill and ignore $40 billion in new spending?
It can’t be the seriousness of the problem, either.
Blocking Russian aggression in Ukraine certainly has critical geopolitical value. But the pandemic has killed about 1 million Americans, and more than 6 million worldwide. And future waves of the virus are almost certain. Just last week, the White House warned of 100 million more US infections in the fall and winter without more vaccines, therapeutics, and testing.
It seems a stretch to argue that support for Ukraine is more important than treatments for COVID-19. So why is one spending initiative likely to be paid for with borrowed money and the other is mired in arguments about how to pay for it?
Well, politics of course.
Congress (really, the Senate) has spent weeks fiddling over the Ukraine money. But, in reality, there is broad bipartisan support for that assistance. Democrats overwhelmingly back it. And so do most Republicans.
To help make the point, Senate Republican leader Mitch McConnell and others in the GOP leadership made a high-profile trip to Kiev over the weekend to express their support for the beleaguered country.
Only a handful of isolationist Republicans opposed the aid measure. One, Sen. Rand Paul (R-KY), single-handedly delayed the bill for days. But the urgently needed money will pass relatively quickly, at least as measured in Senate-time.
That brings us to those payfors.
Because Congress rarely can agree on how to pay for anything it does, the Ukraine bill would become hopelessly stalled if it included offsetting tax increases or spending cuts. The merits of Ukraine funding would be long forgotten while lawmakers squabbled over how to pay for it. Odds are, they’d still be arguing well after Vladimir Putin’s victory parade.
And that, of course, is exactly what happened to the COVID-19 funding bill. Republicans, who opposed the merits of the COVID-19 bill for a long, complicated list of reasons, successfully stalled the measure simply by demanding that it be paid for.
That shifted the debate from the need for drugs and testing to those offsets. Add to that the growing public view that the pandemic is behind us, and Congress lost the all-important sense of urgency it needs to do anything these days.
Republicans have thrown several roadblocks in the way of the new COVID-19 money. First was their demand that it be funded with unspent pandemic relief dollars that initially were earmarked for state and local governments. Then, they shifted gears and insisted the bill also bar Biden from lifting a public health restriction on migrants crossing the US border with Mexico.
Biden initially hoped to get the money added to a huge government spending bill passed in March. But the argument over how to pay for it sidetracked that effort.
Biden then tried to link it to the less controversial Ukraine aid. But now, given the political realities and the urgent need to get weapons and assistance to Ukraine, Biden has agreed to split the bills. That likely will doom the pandemic funding for many more months. And if many public health experts are to be believed, it may result in more sickness and perhaps more death.
The deficit cudgel
The real story, of course, is that the vast majority of politicians in either party do not care about the deficit. When they demand that new spending be paid for, they really are saying they don’t want to spend the money at all. That was the message Sen. Joe Manchin (D-WV) sent to his fellow Democrats when he blocked Biden’s Build Back Better social spending and climate bill last year. And it appears to be the message Republicans are sending with the pandemic funding.
Lawmakers may appear to be fiscal hypocrites. But, really, their disinterest in the deficit is remarkably consistent. They just are using their alleged deficit concerns as a cudgel to kill bills they don’t like.
Posts and comments are solely the opinion of the author and not that of the Tax Policy Center, Urban Institute, or Brookings Institution.
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