Appearing on Friday’s Morning Joe, former Obama administration Treasury Department official Steve Rattner proved that the COVID relief bill being pushed by Democrats was a massive boondoggle that could cause inflation and waste huge sums of taxpayer dollars. That revelation came after co-host Joe Scarborough earlier denounced Republicans as “extremists” for opposing the unnecessary spending.
To the chagrin of the MSNBC anchors, Rattner explained: “...as you guys have been talking about yesterday and today, it’s an enormously popular package. I doesn’t make it a good package.” He then compared the ill-advised plan to giving away “$100 bills on street corners,” which he acknowledged “would probably be popular as well.”
A chart appeared on screen showing that the planned $6.1 trillion in COVID relief spending (a total including the $4 trillion already spent combined with the proposed $1.9 trillion in new spending) was many times greater than the $1.8 trillion of government relief doled out during the entire Great Recession a decade ago.
Presenting a second chart, Rattner used the data to show just how wasteful and unnecessary the new COVID bill being pushed by the Biden administration truly was:
So let’s try to put those in perspective with the needs that are out there last time and this time by looking at my next chart, which compares what we did then to what we did now, again, in terms of the need. So on the left, you can see that the first part of the last rescue package was $755 billion....And so this $1.9 trillion is substantially, enormously in excess of what the amount of economic gap that we are trying to make up.
He then warned: “And the result of that can be inflation, it can certainly be money that’s not well spent.”
A puzzled Scarborough interjected: “...you’re saying the red dot represents how much money has been taken out of this economy because of COVID, since COVID, and that we’re more than doubling the amount of money that we’re throwing at the problem than what we need?”
Rattner confirmed that, even noting it was worse: “Ah, yes. That’s actually close to tripling it. Yes, that is exactly the point....we’re throwing almost three times as much money at that problem as the size of the problem.”
In his final chart, Rattner informed the liberal hosts:
...there’s $515 billion of money in here for state and local governments and education....What I’ve put on the left are three different estimates by three different analysts and think tanks as to what the need is. So the American Enterprise Institute, as we know, which is somewhat right-leaning, thinks there’s basically no need. State and local governments have actually done a good bit better during this period than we thought they would. Tax revenues are better than we thought they’d be, especially for states like California, that benefit from these huge run-up in tech stocks. Then you come to Moody’s, which is an un-aligned, nonpartisan group, Moody’s Analytics, and you can see they’ve put the need at $61 billion. And then you come to the Center on Budget and Policy Priorities, which is a very responsible but left-leaning liberal group, and they put the need at $300 billion.
So even if you went with the analysis of the most liberal group of three, the Biden COVID relief package would waste $215 billion on aid for state and local governments as well as education. According to the most objective analysis from Moody’s, the Biden bill would waste a whopping $415 billion on that area alone.
Rattner concluded: “It’s worth noting that we have already spend $360 billion on state and local government aid and education, much of which actually hasn’t made its way all the way out yet....this is an example of where this package could be substantially greater than the need.”
The sharp criticism of the Biden plan from Rattner being allowed on MSNBC would be remarkable by itself, however, it was made more so by the fact that just 30 minutes earlier Scarborough tarred Republicans as “extremists” for opposing the legislation:
So expect the Democrats to come back at this $15 an hour minimum wage. I just think politically it would be smartest to have Republicans do an up or down vote. Have them vote no against that like they voted no against this COVID relief bill that, again, is supported by 75% of Americans. They are the radicals. They are out of step with working class Americans. They are out of step with middle-class Americans. They are out of step with small business owners. They are the ones that are painting themselves into the corner of extremists. And this will only hurt them more with those suburban voters who were flooding away from them.
He also attacked the GOP for objecting to Democratic efforts to force through a $15 minimum wage hike that the Congressional Budget Office has projected would cost 1.4 million jobs.
Interestingly, Scarborough didn’t try to smear a Democrat like Rattner with the same insults.
That earlier anti-GOP tirade was brought to viewers by Subway and Dove. You can fight back by letting these advertisers know what you think of them sponsoring such content.
Here is a transcript of Rattner’s February 26 analysis dismantling Biden’s COVID relief bill:
6:49 AM ET
MIKA BRZEZINSKI: And let’s turn to former Treasury official and Morning Joe economic analyst Steve Rattner, who has a different take than we just heard from the congressmen on the proposed $1.9 trillion American Rescue Plan. Steve, what do your charts show?
STEVE RATTNER: Well, Mika, as you guys have been talking about yesterday and today, it’s an enormously popular package. I doesn’t make it a good package. We could hand out $100 bills on street corners, that would probably be popular as well. So let’s just take a look at the size of this thing and how it compares to other rescue efforts and the need that we have out there.
As this first chart shows, it’s comparing what we did during the Great Recession to what we’ve done already and what we will continue to perhaps here. On the left, you can see we spent $1.8 trillion to combat the Great Recession. I’m going to talk in a minute about whether that was effective or not. But on the right, you can see that with this bill we would be at $6.1 trillion. We’ve already passed $4 trillion of appropriations towards addressing the COVID problem and now the American Rescue Package would be $1.9 trillion.
So let’s try to put those in perspective with the needs that are out there last time and this time by looking at my next chart, which compares what we did then to what we did now, again, in terms of the need. So on the left, you can see that the first part of the last rescue package was $755 billion, the famous piece of legislation that people are now saying, with justification, was too small. Because if you look at the red dot above it, that’s the amount of output gap, the amount of lost output that the economy needs to recover through this kind of package. And you can see we were way short of that in 2009. If you look at the right side, you can see that that red dot has moved all the way down. And that’s in part – in large part – because of the $4 trillion that we’ve already appropriated. And so this $1.9 trillion is substantially, enormously in excess of what the amount of economic gap that we are trying to make up.
JOE SCARBOROUGH: So can –
RATTNER: And the result of that can be inflation, it can certainly be money that’s not well spent. Yes, I’m with you, Joe.
SCARBOROUGH: So are – when we look at the red dot in the center of the $1.9 trillion bar, you’re saying the red dot represents how much money has been taken out of this economy because of COVID, since COVID, and that we’re more than doubling the amount of money that we’re throwing at the problem than what we need?
RATTNER: Ah, yes. That’s actually close to tripling it. Yes, that is exactly the point. That the economy – the gap that we have in the economy between what it would have been absent COVID and what it is now is that red dot. And we’re throwing almost three times as much money at that problem as the size of the problem.
SCARBOROUGH: Okay. Do you have another chart?
RATTNER: I’ve got one more for you, Joe. So let’s take a look at one of the specific provisions in terms of what the needs might actually be. There’s 300 – sorry, there’s $515 billion of money in here for state and local governments and education, which essentially is the same thing, it flows through. You can see that in the blue bars on the right. What I’ve put on the left are three different estimates by three different analysts and think tanks as to what the need is.
So the American Enterprise Institute, as we know, which is somewhat right-leaning, thinks there’s basically no need. State and local governments have actually done a good bit better during this period than we thought they would. Tax revenues are better than we thought they’d be, especially for states like California, that benefit from these huge run-up in tech stocks. Then you come to Moody’s, which is an un-aligned, nonpartisan group, Moody’s Analytics, and you can see they’ve put the need at $61 billion. And then you come to the Center on Budget and Policy Priorities, which is a very responsible but left-leaning liberal group, and they put the need at $300 billion.
It’s worth noting that we have already spend $360 billion on state and local government aid and education, much of which actually hasn't made its way all the way out yet because of the process. And so this is an example, this is an example of where this package could be substantially greater than the need. And of course there’s the $1,400 checks, which are enormously popular, as you guys have been pointing out, but essentially would send money to almost 95% of Americans regardless of what their need or isn’t.
(...)
