Some Senate Democrats are urging President Joe Biden to rethink the way the nation is handing it out incentive payments, the direct financial aid being deployed by Congress to help millions of Americans affected by the economic collapse that followed the coronavirus pandemic.
Rather than providing discreet rounds of incentive checks that are negotiated every time and arrive months apart, the federal government should provide recurring checks to help families make ends meet. COVID-19 is over, the 10 lawmakers said in a letter released Tuesday.
The request comes when the Senate hears Mr. Biden’s $ 1.9 trillion aid package this week, which would include a third round of stimulus checks that would direct $ 1,400 to millions of eligible Americans. Congress issued $ 1,200 checks under the Coronavirus Aid, Relief and Economic Security (CARES) Act a year ago, and sent an additional $ 600 payment in December as part of a broader stimulus bill. The senators have not specified an amount they are seeking for monthly direct aid.
The idea of issuing recurring stimulus payments as a way to accelerate economic recovery has been championed by progressives and some Democrats. In January there were more than 50 MPs Biden’s government urged to support a proposal of $ 2,000 monthly payments until the pandemic ends.
Supporters of the idea point out that financial troubles remain widespread in the US for nearly a year after COVID-19 effectively shut down the economy. Despite the ongoing recovery, one-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 Center for Budget and Policy Priorities.
“The decades of research into stimulus measures confirm the argument that much of this is being spent, helping to stimulate the economy, and sources like the Census show there is a tremendous need” for more funding despite the erratic recovery, said Claudia Sahm, an economist . who has worked at the Federal Reserve and the Washington Center for Equitable Growth.
She added, “The reason we weren’t in the 1933 world when things got really bad is because the federal government and the Federal Reserve intervened – but we’re not out of the woods 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 improved unemployment benefits, has not reached all families affected by the economic crisis.
Millions “are ineligible for unemployment insurance after seeing their hours cut, moving 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 critical to supporting families in need who are not covered by unemployment insurance.”
$ 1,400 refund?
Still, such arguments are unlikely to gain traction among Congressional Republicans and even some moderate Democrats, as many have already opposed the $ 1,400 checks that are part of Mr. Biden’s US bailout. Some lawmakers have also called for the third round of stimulus checks to be distributed among fewer households by focusing on lower-income Americans.
According to the American Rescue Plan, a person’s income is the main determinant of whether or not a check is received, as is the amount of payment – similar to the previous two rounds of incentive checks.
Singles could receive $ 1,400 each, while married couples filing jointly could receive $ 2,800. Only individuals making up to $ 75,000 would get the full payout, as would married couples with incomes up to $ 150,000. For incomes above those thresholds, payment amounts would fall, and disappear completely for singles earning more than $ 100,000 and married couples with a combined income of more than $ 200,000.
Some lawmakers have cited research showing that higher-income families are recovering well from the economic impact of the pandemic as a reason for lowering those income thresholds. Given that debate, many lawmakers are unlikely to support recurring stimulus payments.
Still, some elements of the US bailout can provide similar continued relief for some households. For one, it would give an extra $ 400 a week to unemployed Americans, up from $ 300, which would be helpful to unemployed workers and their families, but it wouldn’t help those struggling with cut hours or other income losses.
The bill would also expand children’s tax credit, transforming an annual break claimed on tax returns – and usually reflected in people’s annual refunds – into a monthly payment. Under the plan, the tax credit would increase from $ 2,000 to $ 3,600 for kids under 6 and to $ 3,000 for kids under 17. The IRS would pay the tax credit in monthly installments. That means a family with two children under 6 could receive a check for $ 600 monthly from the IRS, for example.
In making their argument, the senators noted that the $ 1,400 probably won’t last long for many families.
“Families need not worry whether they will have enough money to pay for basic necessities in the coming months as the country continues to fight a global pandemic,” they wrote. “Nearly six in ten people say the $ 1,400 payments that will be included in the bailout package will take less than three months.”