Some Senate Democrats are urging President Joe Biden to overhaul the nation's approach to handing out stimulus payments, the direct financial relief deployed by Congress to help millions of Americans affected by the economic collapse that followed the coronavirus pandemic.
Instead of providing discrete rounds of stimulus checks that are negotiated each time and arrive months apart, the federal government should provide recurring checks to help families get by until COVID-19 is over, the 10 lawmakers said in a letter released on Tuesday.
The request comes as the Senate takes up Mr. Biden's $1.9 trillion relief package this week, which would include a third round of stimulus checks that would direct $1,400 to millions of eligible Americans. Congress distributed $1,200 checks a year ago under the Coronavirus Aid, Relief and Economic Security (CARES) Act, and sent an additional $600 payment in December as part of a broader stimulus bill. The senators didn't specify an amount they are seeking for monthly direct aid.
The idea of issuing recurring stimulus payments as a way to speed up the economic recovery has been championed by progressives and some Democrats. In January, more than 50 House members urged the Biden administration to back a proposal for $2,000 monthly payments until the pandemic ends.
Supporters of the idea point out that financial hardship remains widespread around the U.S. almost a full year after COVID-19 effectively shuttered the economy. Despite the ongoing recovery, a third of adults are struggling to pay their bills, while employers have slashed roughly 10 million jobs from their payrolls during the crisis, according to an analysis by the Center on Budget and Policy Priorities.
"The decades of research on stimulus checks back up the argument that much of this is spent, which helps stimulate the economy, and sources like the Census show there is immense need" for more funding despite the fitful 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 aren't in the 1933 world when things were really bad is because the federal government and Federal Reserve stepped in — but we aren't 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 enhanced unemployment benefits hasn't reached every family hurt by the economic crunch.
Millions "do not qualify for unemployment insurance after seeing their hours reduced, switching to lower-paying jobs, or temporarily leaving the workforce to care for family members during the pandemic," they wrote in the letter. "Direct payments are crucial for supporting struggling families who aren't reached by unemployment insurance."
$1,400 pushback?
Still, such arguments are unlikely to gain traction among congressional Republicans and even some moderate Democrats given that many have already voiced opposition to the $1,400 checks that are part of Mr. Biden's American Rescue Plan. Some lawmakers have also called for the the third round of stimulus checks to be distributed to fewer households by focusing on lower-income Americans.
Under the American Rescue Plan, a person's income is the chief determinant of whether they'll get a check, as well as the payment amount — similar to the previous two rounds of stimulus checks.
Single people could receive as much as $1,400 each, while married couples filing jointly could receive $2,800. Only individuals earning up to $75,000 would get the full payments, as would married couples with incomes up to $150,000. For incomes above those thresholds, payment amounts would decline, phasing out completely for single individuals earning above $100,000 and married couples with a combined income of more than $200,000.
Some lawmakers have cited research that shows higher-income families are rebounding well from the pandemic's economic impact, as a rationale for lowering those income thresholds. Given that debate, many lawmakers are unlikely to support recurring stimulus payments.
Even so, some elements of the American Rescue Plan could provide a similar form of ongoing relief to some households. First, it would direct an extra $400 per week to unemployed Americans, up from $300, which would be helpful to jobless workers and their families but wouldn't help those who are struggling with cut hours or other income losses.
The bill also would expand the Child Tax Credit and transform it from an annual break claimed on tax returns — and which typically shows up in people's annual refunds — into a monthly payment. Under the plan, the tax credit would rise from $2,000 to $3,600 for children up to 6 years old and to $3,000 for children up to age 17. The IRS would pay the tax credit in monthly installments. That means that a family with two children under 6 could receive monthly checks of $600 from the IRS, for example.
In making their argument, the senators noted that the $1,400 isn't likely to tide many families over for very long.
"Families shouldn't have to worry about whether they'll have enough money to pay for essentials in the months ahead as the country continues to fight a global pandemic," they wrote. "Almost six in 10 people say the $1,400 payments set to be included in the rescue package will last them less than three months."
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