Some Senate Democrats are asking President Joe Biden to reframe the country’s approach to distributing stimulus payments, the direct financial relief implemented by Congress to help millions of Americans affected by the economic meltdown that followed the coronavirus pandemic.
Instead of providing discrete rounds of stimulus checks that are traded each time and arrive months apart, the federal government should provide recurring checks to help families survive until COVID-19 it’s over, the 10 lawmakers said in a letter released Tuesday.
The request comes at the moment when the Senate accepts Biden’s proposal $ 1.9 trillion aid package this week, which would include a third round of stimulus checks that would target $ 1,400 to millions of eligible Americans. Congress distributed checks for $ 1,200 a year ago under the Coronavirus Aid, Relief and Economic Security (CARES) Act, and sent an additional payment of $ 600 in December as part of a broader stimulus project. Senators did not specify the amount they seek for direct monthly aid.
The idea of issuing recurrent stimulus payments as a way to accelerate the economic recovery has been advocated by progressives and some Democrats. In January, more than 50 members of the urged the Biden administration to support a proposed $ 2,000 monthly payments until the end of the pandemic.
Proponents of the idea point out that financial difficulties remain widespread in the United States almost a full year after COVID-19 effectively closed the economy. Despite the ongoing recovery, a third of adults are struggling to pay their bills, while employers cut about 10 million jobs from their payrolls during the crisis, according to an analysis by the Budget and Policy Priorities Center.
“The decades of research on stimulus checks support the argument that much of it is spent, which helps to stimulate the economy, and sources like the Census show that there is an immense need” for more funding, despite the intermittent recovery, said Claudia Sahm, an economist who worked at the Federal Reserve and the Washington Center for Equitable Growth.
She added: “The reason we are not in the world of 1933, when things were really bad, is because the federal government and the Federal Reserve took action – but we are not out of danger yet.”
The senators who signed the letter, including Bernie Sanders of Vermont, Elizabeth Warren of Massachusetts and Ron Wyden of Oregon, argue that aid, such as increased unemployment benefits, did not reach all families affected by the economic crisis.
Millions “do not qualify for unemployment insurance after seeing their hours cut, switching to lower-paid jobs or temporarily leaving the workforce to care for family members during the pandemic,” they wrote in the letter. “Direct payments are crucial to support families in distress that are not reached by unemployment insurance.”
$ 1,400 pushback?
Still, such arguments are unlikely to gain traction among Congressional Republicans and even some moderate Democrats, as many have already expressed opposition to the $ 1,400 checks that are part of Biden’s American Rescue Plan. Some lawmakers have also called for the third round of stimulus checks to be distributed to fewer families, focusing on low-income Americans.
According to the American Rescue Plan, a person’s income is the main determinant of whether they will receive a check, as well as the payment amount – similar to the previous two rounds of stimulus checks.
Single people can receive up to $ 1,400 each, while couples filing jointly can receive $ 2,800. Only individuals earning up to $ 75,000 will receive full payments, as will couples with incomes up to $ 150,000. For rents above these limits, the payment amounts would decrease, eliminating completely for single individuals with an income above US $ 100,000 and couples with a combined income above US $ 200,000.
Some lawmakers cited research that shows that higher-income families are recovering well from the economic impact of the pandemic, as a justification for reducing these income limits. Given this debate, many lawmakers are unlikely to support recurrent stimulus payments.
Even so, some elements of the American Rescue Plan could provide a similar form of continuous relief for some families. First, it would direct an extra $ 400 a week to unemployed Americans, above $ 300, which would be useful for unemployed workers and their families, but would not help those who are struggling with cut hours or other income losses .
The account would also expand the Children’s Tax Credit and transform it from an annual discount claimed on tax returns – and which normally appears on people’s annual refunds – into a monthly payment. Under the plan, the tax credit would increase from $ 2,000 to $ 3,600 for children up to 6 years of age and $ 3,000 for children up to 17 years of age. The IRS would pay the tax credit in monthly installments. This means that a family with two children under the age of 6 can receive monthly checks for $ 600 from the IRS, for example.
In presenting their argument, the senators noted that the $ 1,400 is unlikely to support many families for long.
“Families should not be concerned that they will have enough money to pay for the essentials in the coming months, while the country continues to fight a global pandemic,” they wrote. “Almost six out of 10 people say that the $ 1,400 payments provided for in the rescue package will last less than three months.”