This week in Bidenomics: A tale of two emergencies – Yahoo Finance

Is the COVID pandemic still an emergency?

If youre a student-loan borrower, the answer is yes. President Biden this week extended the COVID-era moratorium on student-debt repayment until Aug. 31, and since thats just a couple of months before the 2022 midterm elections, Biden will almost certainly extend it again. Debt payments may not resume until 2023.

But the migration emergency is over. On April 1, the Centers for Disease Control said it was time to end a controversial policy President Trump first imposed in 2020, known as Title 42 deportations. That comes from a law that allows the U.S. government to block migrants from entering the country for public health reasons. The Trump administration used the law to expel 400,000 migrants, and Biden has expelled another 1.2 million. The policy is now due to end on May 23, with most migrants once again going through the usual process of applying for entry.

Political pressure dominates both issues. Some liberal Democrats are pressuring Biden to use executive action to cancel up to $50,000 per borrower in student debt, with Biden resisting. He supports cancelation of up to $10,000 in debt, but wants Congress to do it through legislation. Democrats dont have the votes for that, so extending the moratorium is a kind of consolation prize for borrowers who hoped Biden and his fellow Democrats would ease student-debt burdens when they took power in Washington last year.

Many of the same liberal Democrats have been urging Biden to end Trumps migration blockade, arguing that it amounts to discrimination against oppressed people with legitimate asylum claims. But some Democrats and most Republicans want to keep Title 42 in place, whether as ongoing protection against COVID or just as a tool to limit inbound migration. Three states have filed a lawsuit trying to block the Biden change, and its possible Republicans and some Democrats in Congress could join forces to keep Title 42 in place through legislation.

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Whats missing is any coherent rationale for determining when the COVID emergency is formally over and the nation should revert to normal policies. Officially, the Secretary of Health and Human Services determines when a public health emergency is in effect, at 90-day intervals. The last such finding came on Jan. 16, with another renewal likely in late April. The emergency has been in effect continually since Jan. 27, 2020, giving the government authority to enact a variety of extraordinary measures.

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In a practical sense, however, theres no longer an emergency in most parts of the economy. The labor market is surging and the unemployment rate has fallen to 3.6%, just one-tenth of a point higher than it was before the COVID pandemic erupted in 2020. Real GDP is well above pre-pandemic levels, even when adjusting for inflation. There are problems, such as 7.9% inflation. But consumers keep spending and growth looks solid for the rest of the year.

After Biden extended the student-loan repayment pause, Moodys Analytics argued the extension was unjustified.

The economics do not support a continuation of this policy that began in the teeth of the pandemic recession, economist Bernard Yaros wrote on April 7.

U.S. President Joe Biden delivers remarks on the coronavirus disease (COVID-19) before receiving a second COVID-19 booster vaccination in the Eisenhower Executive Office Buildings South Court Auditorium at the White House in Washington, U.S., March 30, 2022. REUTERS/Kevin Lamarque

He points out that the unemployment rate for workers with a college degree is an extremely low 2%, with others more in need of ongoing relief. The payment pause costs the government about $4 billion per month in foregone revenue, or $48 billion per year. Thats a sizable subsidy going to a relatively high-income slice of Americans.

Biden is obviously invoking emergency powers on a selective basis, to promote policies he thinks will best suit his political needs. Republicans are no better. Many of the conservative voices howling about the end of Title 42 are the same ones who fought against lockdowns, mask mandates and other efforts to limit the spread of COVID. Emergencies are in the eye of the beholder, no matter which party you belong to.

More of this confusion is coming. The federal rule requiring masks on planes and in airports is due to expire on April 18, but the government could renew it, with predictable arguments for and against masks likely to heat up. The surge in the Omicron COVID variant may abate as warmer weather arrives, and many states and cities have relaxed masking rules and other requirements. But another surge is always possible, perhaps next fall or winter when many Americans head back indoors.

There was never likely to be a clean ending to the COVID pandemic, since the virus will circulate indefinitely and vaccine effectiveness could wane. But politicians are making the ending, if there is one, about as muddy as possible. Americans should decide for themselves when the emergency is over, if they want any clarity at all.

Rick Newman is the author of four books, including "Rebounders: How Winners Pivot from Setback to Success. Follow him on Twitter: @rickjnewman. You can also send confidential tips.

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This week in Bidenomics: A tale of two emergencies - Yahoo Finance