It cost less than one-tenth of the amount Congress has approved in response to the coronavirus pandemic. But even as lawmakers begin drafting the next round of economic relief, it’s not clear there’s enough support in Washington for one of the most popular policies in years: direct cash payments.
Only $293 billion of the $2 trillion Coronavirus Aid, Relief and Economic Stability Act (CARES) went directly to individuals through no-strings-attached cash payments. (Congress has also spent about another $1 trillion in other pieces of legislation responding to the health crisis.) The vast majority of the money has been earmarked for businesses suffering from shutdowns.
The economic crisis resulting from the pandemic has only deepened, with the Labor Department set to announce Friday morning just how many millions of people lost their jobs last month.
So it would seem to make sense that another round of checks ― perhaps even multiple rounds of checks ― could help blunt the economic effects of the coronavirus, particularly when direct stimulus remains so popular. Polling has found about three-quarters of Americans in key battleground states support more government relief payments.
“The government has shut down the economy to keep us all safe. We have an obligation to help people pay the bills,” said Rep. Ro Khanna (D-Calif.). “The way to do that is to provide a $2,000 payment a month for the duration of this crisis to any household making less than $250,000.”
House Speaker Nancy Pelosi (D-Calif.) said last week that Congress needs to figure out the best way to distribute money, musing that “perhaps” a “guaranteed income” for people would be worth considering. Her top deputy, Majority Leader Steny Hoyer (D-Md.), previously suggested monthly payments.
Progressives in Congress like Khanna and Sen. Bernie Sanders (I-Vt.) agree on $2,000 recurring monthly payments until the situation improves. But a spokesperson for Pelosi said she had in mind something more like the Paycheck Guarantee Act from Rep. Pramila Jayapal (D-Wash.), which would grant money to employers to pay wages and prevent layoffs ― not pay people directly.
With the Democrats not yet coalescing around any one idea, Pelosi is collecting proposals from the chairs of various House committees. And negotiations between Congress and the Trump administration on the next bill have been slow to pick up. A spokesperson for the House Ways and Means Committee, which oversees taxes and rebate payments, said that while details remain uncertain, Chairman Richard Neal (D-Mass.) “believes there should be at least one more round of direct payments to individuals.”
“My sense is the top consideration right now, at least in our caucus calls, is the need to save state and local governments from imminent collapse. And I think that has chewed up a lot of our bandwidth.”
Despite some trouble getting the money to people who haven’t filed tax returns in the past two years, the direct payments may have been more efficient than the Paycheck Protection Program (PPP) and expanded unemployment benefits, both of which have had major glitches. As of Thursday, layoff victims in 20 states still weren’t receiving the new benefits, more than a month after the CARES act became law. Meanwhile, the IRS has sent direct payments to more than 120 million households so far.
While direct payments were one of the most-discussed policies leading up to passage of the CARES Act, they’ve since received less attention than other initiatives. Instead, support for state and local governments, hospitals and health care workers ― as well as expanded unemployment insurance benefits and more money for the Paycheck Protection Program ― have taken center stage.
“My sense is the top consideration right now, at least in our caucus calls, is the need to save state and local governments from imminent collapse,” Rep. Jared Huffman (D-Calif.) told HuffPost on Thursday. “And I think that has chewed up a lot of our bandwidth.”
Congress has already poured an extra $321 billion into the small business PPP loan program, and Democrats and Republicans alike are once again pushing to put more money in it.
As they debate the next bill ― some Republicans have debated whether to do another bill ― lawmakers will wrangle over another round of PPP funds, as well as whether to preserve expanded unemployment insurance. The extra $600 per week for unemployment provided by the CARES Act is set to expire in July.
Sen. Ron Wyden (D-Ore.), the top Democrats on the Senate committee that oversees taxes and unemployment, announced a new proposal Thursday to keep the $600 in place until economic conditions improve, an idea that seems to have wide support among Democrats. Wyden said he also supports another round of direct payments, but it’s not his first priority at the moment.
“I would support additional payments, as well as fixing problems with the first round of payments like the exclusion of dependents and citizen children of immigrants,” Wyden told HuffPost in a statement. “My top priorities are tying expanded unemployment benefits to economic conditions and providing more help for the smallest of small businesses.”
The first round of payments broke a longstanding Washington taboo against giving money directly to poor people, even if they have no taxable income. A recurring monthly payment for people who aren’t senior citizens would be another huge step.
Adam Ruben of the Economic Security Project, an advocacy group promoting the concept of guaranteed income, said the conversation about the next coronavirus bill has been encouraging.
“It is a remarkable shift toward an understanding that cash payments give people the tools to solve their own problems,” Ruben said. “It was a minority position, [but] now I think we see broad agreement among Democrats and even some Republicans that cash is an important tool ― and once isn’t enough.”
Huffman, however, said skepticism remains toward the near-universal benefit ― that sending the same payment to people who are doing fine as people who can’t pay their rent was “not ideal.” (People with the highest incomes were excluded from the payments in the CARES Act.)
“There’s something about abusing this crisis that bothers all of us,” Huffman said.
Clarification: A previous version of this story said the Economic Security Project advocates for a universal basic income; the group favors a guaranteed income.
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